Canada’s economy shrank by more than expected in October, falling 0.3 per cent — its biggest monthly drop in nearly three years — as both goods and services industries weakened, according to new data from Statistics Canada.
Economists had expected a smaller 0.2 per cent decline. The drop followed modest growth of 0.2 per cent in September, which helped Canada avoid a technical recession earlier in the year.
The goods sector fell 0.7 per cent, led by a 1.5 per cent drop in manufacturing. Machinery production plunged nearly seven per cent, while wood product manufacturing fell sharply after new U.S. tariffs took effect in mid-October. Mining, oil and gas, and construction also declined, with residential construction down for a third straight month.
Services fell 0.2 per cent, partly due to a Canada Post strike and a teachers’ strike in Alberta.
Despite the weak October result, early estimates suggest the economy may grow by 0.1 per cent in November. The Bank of Canada has said it expects slow growth in the fourth quarter and kept its key interest rate unchanged at 2.25 per cent earlier this month.
The Canadian dollar rose slightly after the data was released.
