Analysis in Brief
Service industries remain resilient amid economic uncertainty in 2025
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Acknowledgments
The authors would like to thank Shannon O’Brien, Brett Dmitruk, Racha Mohsen, Vivian Lin, Terilyn Ebert, Victoria Silverman, James Monteith and John Burton for their contributions.
Introduction
Canada’s service industries were shaped by evolving economic conditions throughout 2025. The economic rebound in the service industries after the COVID-19 pandemic, which slowed through 2023 and
This study presents advance estimates for key service industries for 2025, leveraging alternative data sources such as goods and services tax revenue, which is used as an indicator for operating revenue. This method provides timely and valuable insights on business performance before annual financial business survey estimates become available.
In general, the service industries included in this study experienced slower revenue growth in 2025. Some industries with robust revenue growth in 2024 saw significant moderation in revenue gains in 2025, including informatics services; accounting, tax preparation, bookkeeping and payroll services; engineering services; management, scientific and technical consulting services; architectural services; and specialized design services. Consumer goods and general rental centres, and surveying and mapping services, were the only two industry groups with a higher rate of revenue growth compared with 2024. The employment services industry group was the only one in the analysis to record a decline in revenue in 2025.
Data table for Chart 1
| 2024 | 2025 | |
|---|---|---|
| percentage change | ||
| Source: Statistics Canada, Annual Services Industries Program. | ||
| Software publishers | 13.3 | 5.3 |
| Computing infrastructure providers, data processing, web hosting, and related services | 11.9 | 6.9 |
| Accounting, tax preparation, bookkeeping and payroll services | 8.0 | 4.5 |
| Surveying and mapping services | 1.2 | 3.1 |
| Engineering services | 8.0 | 3.5 |
| Management, scientific and technical consulting services | 5.8 | 3.1 |
| Architectural services | 7.0 | 1.3 |
| Employment services | -4.5 | -3.3 |
| Specialized design services | 4.3 | 1.8 |
| Commercial and industrial machinery and equipment rental and leasing | 4.4 | 3.4 |
| Consumer goods and general rental centres | 1.3 | 2.1 |
| Accommodation services | 4.6 | 3.1 |
| Travel arrangement and reservation services | 8.3 | 7.9 |
Administrative and support services
Domestic demand buoys growth in travel arrangement and reservation services, and accommodation services
Travel demand in Canada continued to expand through 2025, though at a slower pace than in previous years as international tourism softened. Growth was driven by domestic tourism, with travel expenditures of Canadian residents within Canada increasing by 8.7% in
Data table for Chart 2
| Reference period | Tourism expenditures | Domestic demand's share of tourism expenditures |
|---|---|---|
| 2017 constant dollars (millions) | percent | |
| Note: Q1 = first quarter, Q2 = second quarter, Q3 = third quarter and Q4 = fourth quarter.
Source: Statistics Canada, Table 36-10-0230-01. |
||
| 2019 | ||
| Q1 | 25,092 | 72.9 |
| Q2 | 25,293 | 72.3 |
| Q3 | 25,279 | 72.4 |
| Q4 | 25,372 | 72.9 |
| 2020 | ||
| Q1 | 21,566 | 82.4 |
| Q2 | 7,136 | 98.7 |
| Q3 | 10,973 | 98.7 |
| Q4 | 10,872 | 97.2 |
| 2021 | ||
| Q1 | 10,951 | 96.8 |
| Q2 | 11,475 | 97.7 |
| Q3 | 15,760 | 93.2 |
| Q4 | 17,794 | 85.1 |
| 2022 | ||
| Q1 | 17,934 | 86.7 |
| Q2 | 22,004 | 82.2 |
| Q3 | 23,349 | 80.6 |
| Q4 | 24,189 | 79.0 |
| 2023 | ||
| Q1 | 24,875 | 77.7 |
| Q2 | 24,952 | 77.0 |
| Q3 | 25,221 | 76.3 |
| Q4 | 25,800 | 75.5 |
| 2024 | ||
| Q1 | 26,009 | 75.4 |
| Q2 | 26,091 | 75.5 |
| Q3 | 25,932 | 76.2 |
| Q4 | 26,322 | 76.0 |
| 2025 | ||
| Q1 | 26,309 | 75.9 |
| Q2 | 26,435 | 77.0 |
| Q3 | 26,533 | 76.5 |
| Q4 | 26,856 | 76.0 |
Employment services constrained by growing slack in labour market
The performance of the employment services industry group is directly related to labour market trends, with the job vacancy rate serving as a key indicator for labour demand pressures in the economy (Chart 3). Businesses in the employment services industry group—which provide expertise in supplying temporary staff, placing applicants and offering human resource management services—support a wide range of sectors, including natural resources, construction, accommodation and food services, and health care. Throughout 2025, a softening labour market, marked by a 12.6% decrease in job vacancies and a vacancy rate that fell to 2.8%—its lowest level since 2017—constrained revenues in the employment services industry group. Employment services revenues declined by 3.3% in 2025, following a larger 4.5% decrease in 2024.
Data table for Chart 3
| Reference period | Payroll employees | Job vacancies | Job vacancy rate |
|---|---|---|---|
| thousands | percent | ||
| Note: Q1 = first quarter, Q2 = second quarter, Q3 = third quarter and Q4 = fourth quarter.
Source: Statistics Canada, Table 14-10-0400-01. |
|||
| 2022 | |||
| Q1 | 16,318 | 945 | 5.5 |
| Q2 | 16,573 | 986 | 5.6 |
| Q3 | 16,750 | 961 | 5.4 |
| Q4 | 16,904 | 878 | 4.9 |
| 2023 | |||
| Q1 | 17,022 | 829 | 4.6 |
| Q2 | 17,082 | 772 | 4.3 |
| Q3 | 17,164 | 711 | 4.0 |
| Q4 | 17,197 | 672 | 3.8 |
| 2024 | |||
| Q1 | 17,212 | 640 | 3.6 |
| Q2 | 17,282 | 579 | 3.2 |
| Q3 | 17,302 | 548 | 3.1 |
| Q4 | 17,323 | 543 | 3.0 |
| 2025 | |||
| Q1 | 17,377 | 524 | 2.9 |
| Q2 | 17,330 | 507 | 2.8 |
| Q3 | 17,368 | 494 | 2.8 |
| Q4 | 17,393 | 495 | 2.8 |
Rental and leasing services
Revenue growth for rental and leasing services slowed in 2025
The commercial and industrial machinery and equipment rental and leasing industry group experienced moderate growth in 2025. While revenues continued to expand (3.4%), the pace of growth slowed compared with 2023 (8.4%) and 2024 (4.4%). Among other factors, the completion of major projects in the oil and gas extraction subsector tempered growth in 2025 (Chart 4).
The consumer goods rental industry group saw revenue growth of 2.1% in 2025, up slightly from 1.3% in 2024, but trailing the 7.0% gain seen in 2023. New housing activity is one of the key factors affecting performance in the industry group, with revenues typically realized once homes are occupied. Housing starts grew by 5.6% in
Data table for Chart 4
| 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|
| percentage change | |||||
| Source: Statistics Canada, Table 34-10-0035-01. | |||||
| Machinery and equipment | -66.6 | 292.6 | 36.8 | 19.4 | -71.0 |
| Construction | 27.5 | 30.2 | 8.4 | 9.9 | 9.3 |
Professional business services
Engineering services build on federal and provincial capital investments
The engineering services industry saw growth of 3.5% in 2025—down from 8.0% in 2024. Industry growth was sustained in part from federal and provincial capital investments in the face of trade
Architectural services grew more slowly
The architectural services industry comprises establishments engaged in planning and designing the construction of residential, commercial and industrial buildings, as well as the development of land for projects such as parks, highways and land subdivisions. Revenue growth for the architectural services industry eased significantly in 2025 (1.3%), compared with 2024 (7.0%) and 2023 (9.8%). The demand for architectural services slowed in 2025 as the growth in residential and non-residential building permits eased in 2025 (Chart 5), with the total value of building permits increasing by 2.2% from 2024 to 2025, down from 8.6% the year
Data table for Chart 5
| 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|
| percentage change | |||||
| Source: Statistics Canada, Table 34-10-0292-01. | |||||
| Total residential | 30.1 | 2.6 | -7.9 | 9.9 | 1.8 |
| Total non-residential | 18.1 | 17.5 | 11.2 | 6.6 | 2.8 |
Accounting, tax preparation, bookkeeping and payroll services continue to benefit from the adoption of artificial intelligence
Revenue for accounting, tax preparation, bookkeeping and payroll services increased by 4.5% in 2025, closer to historical growth but lower than the gains experienced in 2024 (8.0%) and 2023 (11.3%). The industry is experiencing a transition away from record keeping and toward strategic advisory services aided by the adoption of
Revenue growth in the surveying and mapping services industry gains ground in 2025
Following growth of 1.8% in 2023 and 1.2% in 2024, revenues in the surveying and mapping services industry increased 3.1% in 2025. Nevertheless, labour constraints stemming from an aging labour force and growing difficulties in attracting and retaining young workers have resulted in widespread skill shortages and reduced work capacity for some industry operators. Stronger housing starts (up 5.6% in
Demand cools for management, scientific and technical consulting services
Revenue for management, scientific and technical consulting services increased 3.1% in 2025, slowing from gains of 5.8% in 2024 and 6.8% in 2023. Growing economic uncertainty and federal spending cuts—following the federal government’s commitment to reduce spending on management and other consulting services by 20% over three years—are factors affecting demand for consulting
Specialized design services edge up
The specialized design services industry group comprises interior, industrial, graphic and other specialized design services, and interior design accounts for the majority of revenues. While revenues edged up 1.8% in 2025, growth softened compared with 2023 (3.6%) and 2024 (4.3%). The industrial design services industry was the only one to see declining revenues, while revenues in the interior design services industry remained flat, supported by lower interest rates that eased household budget constraints and facilitated renovation-related demand. The graphic design services and other specialized design services industries posted stronger gains over the period. Ongoing trends, such as increased use of digital design tools, AI integration into workflows and rising demand for web-based services, enhanced efficiency and expanded offerings in the industry group.
Informatics services
Growth slows for informatics services
The informatics services subsector continued to record stronger revenue growth than most other service industries examined in this study. Nevertheless, the pace of growth is slowing. Software publishers saw growth of 5.3%, compared with 13.3% in 2024 and 30.1% in 2023, and the computing infrastructure providers, data processing, web hosting, and related services industry group saw growth of 6.9%, compared with 11.9% in 2024 and 18.7% in 2023. Canadian businesses continued to adopt digital technologies to improve operational efficiency in 2025, driven by the ongoing integration of AI. As in 2024, businesses leading this demand were in information and cultural industries; finance and insurance; and professional, scientific and technical
Concluding remarks
Canada’s economy faced ongoing uncertainty throughout 2025, grappling with the effects of ongoing U.S.–Canada trade tensions, growing softness in labour markets and generally weaker growth in the broader economy. Despite real gross domestic product increasing by 1.7% in 2025—the slowest pace of annual growth since the decline in 2020—service industries demonstrated
Near-term business conditions for service industries may continue to reflect ongoing challenges, including uncertainty surrounding U.S. trade policy, geopolitical developments in the Middle East, inflationary pressures, rising input costs, and trends in domestic business investment and population growth. As operators continue to navigate these pressures, near‑term activity in the service industries is likely to remain constrained, with firms focusing on managing costs and preserving flexibility amid an uncertain economic environment.
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