Canadian real GDP decreased by 0.2 per cent in November, following a 0.3 per cent increase in October. Service-producing industries fell by 0.1 per cent, while goods-producing industries contracted by 0.6 per cent. November's slower growth was broad-based, with 13 of 20 major industries seeing declines from the previous month. Downward pressure was led by the transportation and warehousing sector that was struck by widespread work stoppages. Conversely, growth was driven by gains in construction (+0.7 per cent), and the real-estate and rental and leasing sector (+0.3 per cent). Finally, GDP for real-estate offices and agents was up 3.4 per cent month-over-month.  Preliminary estimates suggest that real GDP increased by 0.2 per cent in December.

After its first rate cut of 2025, the Bank of Canada will be displeased with Canadian economic growth continuing to fall short of its projection. Relatively weak retail activity and flat growth illustrates lingering weaknesses in the Canadian economy. Until further notice, we expect the Bank to cut by 25 basis points at its next meeting before reassessing. Of course, incoming Trump tariffs could change this landscape, as our economy would be sizeably damaged quite soon after imposition. 

Copyright British Columbia Real Estate Association. Reprinted with permission.