December 2, 2025

Real gross domestic product (GDP) rose 0.2% in September, more than offsetting August’s decline (-0.1%), as goods-producing industries drove the increase for the second time in three months.

Chart 1
Real gross domestic product rises in September

Goods-producing industries increased 0.6% in September, largely driven by higher activity in the manufacturing sector. Meanwhile, services-producing industries edged up 0.1%. Overall, 10 industrial sectors increased in September.

Manufacturing sector drives September’s growth

The manufacturing sector led the overall growth with a 1.6% expansion in September as durable-goods and non-durable-goods manufacturing industries grew.

Chart 2
Manufacturing sector expands in September

Durable-goods manufacturing industries rose 2.1% in September, more than offsetting the decline in August 2025. Machinery manufacturing (+5.5%) and wood product manufacturing (+5.5%) contributed the most to the increase. A rebound in transportation equipment manufacturing (+2.1%) further contributed to the growth, reflecting higher activity in motor vehicles and parts manufacturing (+3.7%) as some of Ontario’s auto assembly plants resumed production following shutdowns for retooling over the course of the summer.

Non-durable goods manufacturing industries grew 1.0% in September, as most subsectors expanded. Petroleum and coal product manufacturing (+1.9%) was the largest contributor to the increase as petroleum refineries (+1.1%) and petroleum and coal products manufacturing (except petroleum refineries) (+9.5%) ramped up production following maintenance and turnaround activities earlier in the year.

Transportation and warehousing sector rebounds on air transportation recovery

The transportation and warehousing sector rose 1.2%, partially offsetting August’s 1.3% decline, as most subsectors expanded in September.

Following the conclusion of the flight attendants’ work stoppage, air transportation took off with a 6.0% rise in September. This was the largest monthly growth rate since May 2022, lifting the overall sector as airlines affected by the work stoppage in August gradually resumed their operations.

Support activities for transportation further contributed to the growth with a 2.2% increase in September, more than offsetting the decline in the previous month. This increase reflected in part increased support activities for air transportation as well as support activities for freight movements in September.

Postal service and couriers and messengers rose 0.2% in September. Postal service was down 5.3% in the month as workers represented by the Canadian Union of Postal Workers launched a nationwide strike on September 25, pausing Canada Post’s mail and parcel delivery across the country. Meanwhile, a 3.0% expansion in the couriers and messengers’ subsector more than offset the decline in postal service, as consumers and businesses turned to alternative carriers to handle their shipping needs.

Mining, quarrying, and oil and gas extraction up on strength in oil and gas extraction

The mining, quarrying, and oil and gas extraction sector expanded 0.3%, more than offsetting August’s decline, as two of the three subsectors grew in September.

Chart 3
Mining, quarrying, and oil and gas extraction sector rises in September

The oil and gas extraction subsector (+0.9%) recorded its fourth consecutive monthly expansion in September, on continued strength. Oil sands extraction grew 1.3%, led by higher synthetic crude production in Alberta as upgrading facilities continued increasing production following a period of maintenance in April and May. Oil and gas extraction (except oil sands) rose 0.5%, reflecting increased extractions of natural gas and crude petroleum in September.

Support activities for mining, and oil and gas extraction (+1.6%) further added to the growth in September, driven up by the increase in support activities for oil and gas extraction, reflecting higher drilling and rigging services.

Meanwhile, the mining and quarrying (except oil and gas) subsector tempered some of the sector’s growth with a 2.2% contraction in September. This was a second consecutive monthly decline for the subsector, with most industries decreasing in September. Non-metallic mineral mining and quarrying (-3.9%) posted its first decrease in four months, with potash mining (-4.9%) contributing the most to the decline.

Wholesale trade sector up

The wholesale trade sector expanded 0.6% in September, up for the fourth time in five months.

Building material and supplies wholesalers rose 3.4% in September, the largest monthly growth rate in nearly two years, coinciding with the higher activity in sawmills and wood preservation in September.

Food, beverage and tobacco wholesaling (+1.6%) further contributed to the increase in September, coinciding with increased activity in beverage and tobacco product manufacturing (+5.9%) and food manufacturing (+0.4%) in the month.

Retail trade down, tempering September’s expansion

The retail trade sector was the largest detractor to the growth in September with a 0.7% contraction in the month due to declines in most subsectors.

Chart 4
Retail trade sector is down in September

In September, the motor vehicle and parts dealers’ subsector (-2.1%) was down for the first time in three months, reflecting lower retailing activities at new car dealers. The contraction in retailing activities at general merchandise retailers (-1.1%), building material and garden equipment and supplies dealers (-1.1%) and gasoline stations and fuel vendors (-1.0%) further contributed to the decline in the sector. Meanwhile, growth at food and beverage retailers (+0.4%) mitigated the sector’s decline.

Construction sector falls after four straight months of increases

The construction sector was down 0.2% in September following four consecutive monthly increases. Residential building construction, down for the second month in a row, decreased 1.4% in September, driven by lower activity in the new construction of multi-unit buildings.

Engineering and other construction activities (+1.2%) and non-residential building construction (+0.1%) tempered the decrease in September.

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

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

Advance information indicates that real GDP decreased 0.3% in October. Decreases in oil and gas extraction, educational services, and manufacturing were partially offset by increases in mining, quarrying and support services. Owing to its preliminary nature, this estimate will be updated on December 23, 2025, with the release of the official GDP by industry data for October.

Real gross domestic product by industry up in the third quarter

Real GDP was up 0.5% in the third quarter, following a 0.3% decrease in the second quarter, as both goods-producing industries (+1.1%) and services-producing industries (+0.2%) contributed to the increase in the quarter.

Mining, quarrying, and oil and gas extraction (+1.8%) led the growth in the third quarter. Oil and gas extraction expanded 3.2%, led by a ramp up in activity following a decline in the previous quarter. This was the largest quarterly growth rate since the third quarter of 2021. Oil sands extraction expanded 5.2% in the third quarter of 2025, as extraction of crude bitumen and production of synthetic crude expanded following the completion of maintenance and upgrading activities at oil sands facilities in April and May. Oil and gas extraction (except oil sands) rose 1.4% in the third quarter, reflecting increased extractions of natural gas and crude petroleum in Alberta and Newfoundland and Labrador.

The real estate and rental and leasing sector (+1.0%) expanded in the third quarter and was up for a second consecutive quarter. Higher activity at the offices of real estate agents and brokers and activities related to real estate (+7.0%) led the sector’s quarterly growth in the third quarter, following two consecutive quarterly declines, reflecting rising home resale activity across the country, particularly in the Greater Toronto-Hamilton area in Ontario and the Metro Vancouver area in British Columbia. Legal services, which derives much of its activity from real estate transactions, rose 1.1% in the third quarter.

The construction sector rose 1.3% in the third quarter, led by a 4.4% increase in engineering and other construction. This was the sixth consecutive quarterly increase for the sector. Residential buildings construction edged up 0.1%, while repair construction (-0.7%) and non-residential buildings construction (-0.3%) tempered some of the growth.

Chart 6
Main industrial sectors’ contribution to the percent change in gross domestic product in the third quarter

Manufacturing expanded 1.1% in the third quarter, driven largely by a 1.3% increase in non-durable goods manufacturing. Petroleum and coal product manufacturing led the growth with an 8.3% expansion in the quarter, as petroleum refineries across the country resumed and ramped up their production following the completion of maintenance activities in the second quarter. Durable-goods manufacturing was up 0.9% in the third quarter, led by a 5.9% increase in machinery manufacturing and a 1.0% increase in transportation equipment manufacturing, as motor vehicles and parts manufacturing (+3.1%) resumed production following atypical timing and prolonged duration of maintenance and retooling activities at automotive assembly lines.

The finance and insurance sector grew for the eighth consecutive quarter, up 0.8% in the third quarter. Other finance and insurance expanded 1.8%, buoyed by higher activity in the mutual funds market, coinciding with the Toronto Stock Exchange (TSX) index reaching all-time highs during the quarter.

Public administration was the largest detractor to growth in the third quarter, posting a 0.6% decline, driven by a fall in the federal government public administration (except defence). Activities in the third quarter declined following the increase associated with the Canadian federal election in the second quarter.

Source