November 5, 2025

Real gross domestic product (GDP) contracted 0.3% in August, offsetting most of July’s 0.3% expansion, with decreases in goods-producing and services-producing industries.

Goods-producing industries declined 0.6% in August, marking this aggregate’s fifth contraction since the beginning of the year. Services-producing industries edged down 0.1%, marking this aggregate’s first decline in six months, driven by contractions in transportation and warehousing and in wholesale trade.

Chart 1
Real gross domestic product decreases in August

Flight attendants’ strike impacts activity in some transportation subsectors

The transportation and warehousing sector declined 1.7% in August, more than offsetting July’s expansion, on broad-based declines in the month.

Air transportation dropped 4.6% in August, recording its largest decline since January 2022 (-46.7%), when the emergence of the Omicron variant of COVID-19 and the associated public health measures led to a drop in air travel.

Chart 2
Air transportation is down in August, recording its largest decline since January 2022

In August 2025, a work stoppage involving 10,000 flight attendants that began mid-month resulted in flight cancellations, impacting air transportation activity in the month. Disruptions in air transportation were also a major contributor to the decline in support activities for transportation (-1.9%), which fell for the first time in six months, marking its largest decrease since January 2022.

Pipeline transportation was down 0.7% in August, driven by lower pipeline transportation of natural gas (-2.6%), coinciding with lower exports to the United States, and with lower activity in natural gas distribution as domestic deliveries to residential, commercial and industrial customers declined in August.

Wholesale trade sector down for the first time in four months

The wholesale trade sector declined 1.2% in August, after three consecutive monthly increases.

Motor vehicle and parts wholesalers (-8.3%) led the decline in August as activity in the subsector eased, coinciding with lower exports and imports of motor vehicles and motor vehicle parts.

Food, beverage and tobacco wholesalers fell 5.2% in August, the largest monthly contraction rate since November 2022, more than offsetting the preceding two consecutive monthly increases. This contraction coincided with lower activity in food manufacturing.

Mining, quarrying, and oil and gas extraction sector down for the first time in three months

Mining, quarrying, and oil and gas extraction contracted 0.7% in August, partially offsetting the back-to-back increases in June and July.

The support activities for mining, and oil and gas extraction subsector (-5.0%) was down for the second time in eight months, as rigging and drilling activity contracted in August.

Mining and quarrying (except oil and gas) contracted 1.3% in August, driven by a decline in metal ore mining (-1.2%) and in coal mining (-5.1%).

Oil and gas extraction (+0.2%) tempered the decline in the sector, growing for the third month in a row in August. Oil and gas extraction (except oil sands) rose 0.2%, reflecting increased extractions of crude petroleum in Alberta and Newfoundland and Labrador, while oil sands extraction edged up 0.1%, driven by higher synthetic crude production in August.

Utilities sector contracts as worsening drought conditions weigh on hydroelectricity generation

Chart 3
Utilities sector falls in August to its lowest level since May 2018

The utilities sector contracted 2.3% in August, due to widespread declines across all industries comprising the subsector.

Electric power generation, transmission and distribution (-2.4%) accounted for most of the decline in August, recording its sixth consecutive monthly decline, as worsening drought conditions hampered hydroelectric power generation.

Manufacturing sector contracts in August

The manufacturing sector was down 0.5% in August on broad-based declines across durable and non-durable manufacturing industries.

Durable-goods manufacturing contracted 0.8% in August, with machinery manufacturing (-2.8%) and fabricated metal product manufacturing (-2.4%) contributing the most to the contraction in the month. Primary metal manufacturing (+3.7%) tempered the decline, driven by an increase in alumina and aluminum production and processing (+9.6%), coinciding with increased exports of aluminum in the month. Exports of these products to several countries other than the United States increased during the April-to-August period.

Non-durable manufacturing decreased 0.2% with the majority of subsectors contracting in August. Food manufacturing (-1.3%) contributed the most to the decrease, followed by beverage and tobacco manufacturing (-4.7%).

Retail trade up on widespread expansions

The retail trade sector expanded 0.9%, as 8 of 12 subsectors grew in August.

Chart 4
Retail trade sector rose in August

Motor vehicle and parts dealers (+2.5%) led the growth, recording its second consecutive monthly expansion, driven in August by increases in new and used car dealers as well as automotive parts, accessories and tires retailing. A rebound in general merchandise stores (+2.1%), clothing and clothing accessories stores (+2.7%) and sporting goods, hobby, book and music stores (+6.9%) further contributed to the increase in the sector.

Chart 5
Main industrial sectors’ contribution to the percent change in gross domestic product in August

Advance estimate for real gross domestic product by industry for September 2025

Advance information indicates that real GDP increased 0.1% in September. Increases in finance and insurance, mining, quarrying, and oil and gas extraction, and manufacturing were partially offset by decreases in wholesale trade and retail trade. Owing to its preliminary nature, this estimate will be updated on November 28, 2025, with the release of the official GDP by industry estimates for September.

With this advance estimate for September, information on real GDP by industry suggests that the economy edged up 0.1% in the third quarter of 2025. The official estimate for the third quarter will be available on November 28, 2025, when the official estimates of GDP by income and expenditure are released.