Canada’s economy contracts in October as manufacturing and public sector activity slow

Canada’s real gross domestic product declined by 0.3 per cent in October, according to new data from Statistics Canada, as weakness in manufacturing and parts of the public sector weighed on overall economic activity.

The federal agency said goods-producing industries fell by 0.7 per cent during the month, with manufacturing responsible for nearly the entire drop. The slowdown follows earlier signs of easing demand and supply chain adjustments across several manufacturing subsectors.

Public sector activity also declined, partly reflecting the impact of Alberta’s provincewide teachers’ strike, which lasted more than three weeks. Statistics Canada reported a 0.3 per cent decrease in the public sector in October, highlighting how labour disruptions can ripple through broader economic output.

In the resource sector, mining, quarrying, and oil and gas extraction fell by 0.6 per cent, reversing gains recorded in September. Construction activity also slipped, down 0.4 per cent for the first time in six months, with engineering and non-residential construction contributing most to the decline.

Looking ahead, Statistics Canada’s advance estimate for November suggests modest improvement, with real GDP expected to rise by 0.1 per cent as activity picks up in education, construction, and transportation. Economists note the preliminary figure points to continued volatility as higher interest rates and labour challenges shape Canada’s economic outlook.