TORONTO, November 26, 2025 – Today, the Financial Accountability Office of Ontario (FAO) released a report which provides an overview of the latest trends in the Ontario economy from April to September 2025.
Ontario’s economic activity measured by real Gross Domestic Product (GDP) declined by 0.6% in the second quarter of 2025, as the imposition of US tariffs caused exports to drop significantly. The quarterly decline in economic activity was the largest since the 2008-2009 recession, excluding the COVID-19 pandemic.
The latest economic indicators suggest that Ontario’s economy was little changed in the third quarter of 2025, with modest losses in employment and lower international exports, while gains were recorded in retail sales, wholesale trade, manufacturing sales and the housing market. Based on these economic indicators, Ontario’s economy may avoid a technical recession – defined as two consecutive quarterly declines in real GDP – in the 2025 Q2 to Q3 period.
In the FAO’s latest Economic and Budget Outlook, the FAO projected that Ontario’s annual real GDP growth would slow to 0.9% in 2025. Economic activity over the first three quarters of 2025 is largely consistent with this projection. The FAO will continue to monitor Ontario’s economic performance and will update its forecast for economic growth in its next Economic and Budget Outlook report.
To learn more, read the full report here.
Quick Facts:
- Employment in Ontario declined by 1,900 in 2025 Q3, following a significant 38,000 drop in the previous quarter, marking the first back-to-back quarterly job loss since mid-2009, excluding the pandemic.
- The unemployment rate was unchanged in 2025 Q3 at 7.8%, following nine consecutive quarterly increases.
- Housing starts in Ontario increased 8.4% in 2025 Q3 to 18,700 units, building on a 37.0% gain in 2025 Q2.
- Ontario’s manufacturing real GDP has declined in seven of the past eight quarters (2023 Q3 to 2025 Q2) and is at its lowest level since 2015, excluding the pandemic period.
- The Ontario Consumer Price Index (CPI) inflation rate was 1.8% in 2025 Q3, up from 1.7% in 2025 Q2.
About the FAO:
Established by the Financial Accountability Officer Act, 2013, the Financial Accountability Office of Ontario (FAO) provides independent analysis on the state of the Province’s finances, trends in the provincial economy and related matters important to the Legislative Assembly of Ontario.
Visit our website or follow us on X and LinkedIn for more information on our reports.
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For further information, please contact:
Sophia Zhu l 416 931 5498 l SZhu@fao-on.org l fao-on.org