UPDATE 1-Canada's economic growth stalled in November, could contract in Q4

On a preliminary basis, Statistics Canada said output in December was expected to slightly grow by 0.1% in December, though the agency cautioned the advance estimate could be revised. The November performance leaves fourth-quarter growth decelerating by 0.5% annualized, below ⁠the Bank ‌of Canada's most recent forecast of ⁠no growth in the final quarter of the year, based on monthly GDP by industry data.

Canada's economic growth stalled in November as growth in services was offset by weakness in goods-producing industries, data showed on Friday, offering fresh clues on the state of the economy ⁠after almost a year of tariff and uncertainty. Gross domestic product was flat month-on-month in November, compared with a 0.3% contraction see in October, Statistics Canada said.

Analysts polled by Reuters had forecast a marginal 0.1% growth in November. President Donald Trump's hefty tariffs on steel, automotive, lumber and aluminum ​has hobbled output in these hard hit sectors.

While the tariff malaise has not spread beyond these sectors, a recent Bank ‍of Canada survey has shown that business sentiment was subdued, investments were down and companies expected layoffs. On a preliminary basis, Statistics Canada said output in December was expected to slightly grow by 0.1% in December, though the agency cautioned the advance estimate could be revised.

The November performance leaves fourth-quarter growth decelerating by 0.5% annualized, below ⁠the Bank ‌of Canada's most recent forecast of ⁠no growth in the final quarter of the year, based on monthly GDP by industry data. Two consecutive quarters of contraction would constitute a technical recession.

Canada's full ‍year growth is expected to be at 1.3% in 2025, StatsCan said. Final reported quarterly GDP numbers are based on income and expenditure and some ​time it could differ from the estimate calculated from GDP by industry.

SECTOR PERFORMANCE Growth in November was driven mainly by ⁠services-producing industries, which account for roughly three quarters of economic output.

Retail trade, transportation and warehousing and educational services were the top three sectors that posted a positive growth rate in ⁠November. However, in the services sector wholesale trade posted a big decline of 2.1%, its largest contraction since April last year, the statistics agency said.

Most of the strength coming from the services was offset by goods-producing industries which contracted by 0.3%, its third contraction ⁠in four months. Manufacturing output, which contributes over 8% to the GDP, posted a big drop of 1.3%. The industry remains among ⁠the most exposed to trade uncertainty ‌and U.S. tariffs and global trends.

Output of motor vehicles and parts manufacturing shrank by 6.4% owing largely to a global semiconductor shortage, StatsCan said. The drop in manufacturing was closely followed by agriculture, ⁠forestry, fishing and hunting sub-sector where growth shrank by 1.1%, the agency said.

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