Canada’s real gross domestic product (GDP) fell 0.3 per cent in August, offsetting most of the 0.3 per cent expansion recorded in July, Statistics Canada said Friday.
The agency reported declines across both goods-producing and services-producing industries, with the goods sector contracting 0.6 per cent and services edging down 0.1 per cent.
The decrease in services marked the sector’s first decline in six months, led by drops in transportation and warehousing, and in wholesale trade.
The transportation and warehousing sector fell 1.7 per cent in August, more than reversing its July gains. “Air transportation dropped 4.6 per cent in August, recording its largest decline since January 2022 (-46.7%),” Statistics Canada said.
The agency attributed the downturn to a mid-August work stoppage involving 10,000 flight attendants that led to widespread flight cancellations. Disruptions in air travel also contributed to a 1.9 per cent decline in support activities for transportation, marking the subsector’s largest decrease since January 2022.
Photo: Andre Furtado
Pipeline transportation was down 0.7 per cent in August, driven by a 2.6 per cent drop in the movement of natural gas, which coincided with lower exports to the United States and reduced domestic demand.
The wholesale trade sector declined 1.2 per cent, its first decrease in four months. “Motor vehicle and parts wholesalers (-8.3%) led the decline in August,” the agency said, noting that activity in the subsector eased alongside lower exports and imports. Food, beverage and tobacco wholesalers also fell 5.2 per cent, marking the largest monthly contraction since November 2022.
The mining, quarrying, and oil and gas extraction sector contracted 0.7 per cent after two months of growth. The decline was led by a 5.0 per cent drop in support activities for mining and oil and gas extraction. Oil and gas extraction, however, edged up 0.2 per cent, driven by increased crude petroleum production in Alberta and Newfoundland and Labrador.
The utilities sector fell 2.3 per cent, its lowest level since May 2018. “Electric power generation, transmission and distribution (-2.4%) accounted for most of the decline,” Statistics Canada said, citing worsening drought conditions that reduced hydroelectric generation.
Manufacturing output decreased 0.5 per cent in August, with declines across both durable and non-durable goods. Durable-goods manufacturing fell 0.8 per cent, while non-durable manufacturing declined 0.2 per cent. Food manufacturing led the drop in non-durable goods, down 1.3 per cent, followed by beverage and tobacco manufacturing, down 4.7 per cent.
Retail trade rose 0.9 per cent in August, as eight of 12 subsectors grew. “Motor vehicle and parts dealers (+2.5%) led the growth,” the agency said, noting gains among new and used car dealers. Growth was also recorded in general merchandise, clothing, and sporting goods stores.
Advance information from Statistics Canada indicates that real GDP increased 0.1 per cent in September. The agency said higher activity in finance and insurance, mining, quarrying, and oil and gas extraction, and manufacturing was partially offset by decreases in wholesale and retail trade.
With the advance estimate, real GDP by industry suggests the economy edged up 0.1 per cent in the third quarter of 2025. Official third-quarter estimates will be released on Nov. 28.
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Entrepreneur. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 and 2024 as one of the top business journalists in the world by PR News. He was also named by RETHINK to its global list of Top Retail Experts 2024 and 2025.
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