Market News | Canadian Economy Contracts in Q2 Amid Tariff Pressures
- ClearView Insider
- Sep 10, 2025
- 1 min read
Canada’s economy posted its sharpest contraction since the pandemic, with Q2 GDP falling 1.6% annualized. Economists point to steep declines in exports as U.S. tariffs weighed heavily on trade flows.
Trade hit hardest: Exports plunged 26.8%, while imports dropped 5.1%, marking one of the largest negative trade contributions on record outside the pandemic.
Business confidence shaken: Non-residential investment fell 10%, led by a 33% decline in machinery and equipment. Households carried growth: Consumption rose 4.5%, with residential investment up 6.3%, though this strength came at the cost of falling savings rates.
Mixed outlook: While some economists caution weakness will persist without policy support or trade clarity, others note signs of stabilization, including a rebound in U.S. imports and early indications of modest July GDP growth. With Calgary’s economy deeply tied to trade, energy, and investment flows, these national shifts carry local implications for business strategy and commercial real estate decisions.
Connect with Clearview: Interested in how these national trends translate to Calgary’s market outlook? Contact us at info@cvpartners.ca. We’re here to provide insights and help you align your strategy.
Sources: National Bank of Canada Economics. “Canada: Economy contracts sharply in Q2.” Sept. 2025.Royal Bank of Canada Economics. “Canadian GDP: Trade drag pulls Q2 growth negative.” Sept. 2025.