Labour productivity of Canadian businesses up

The labour productivity of Canadian businesses grew 1.4% in the fourth quarter, the first increase since the third quarter of 2008. This marks the highest quarterly growth rate since the first quarter of 1998.

Businesses increased their real output by 1.4% in the fourth quarter, the highest growth rate since the first quarter of 2002. The fourth-quarter gain was fuelled primarily by exports, consumer spending and residential investment.

Hours worked in the business sector remained unchanged in the fourth quarter, after increasing 0.3% in the third quarter. Employment edged up 0.1%, while hours worked per job fell by 0.1%.

Both goods-producing and service-producing sectors made positive contributions to the upturn in business productivity in the fourth quarter.

The productivity of goods-producing businesses increased 1.7% following three quarters of declines. The growth was widespread, most notable being manufacturing, which advanced 2.1%.

Productivity in the service-producing industries increased 1.0%, a fourth consecutive quarterly gain. The largest increases were in wholesale trade, retail trade and information and cultural services.

Labour costs per unit of production in Canadian dollars were unchanged for Canadian businesses in the fourth quarter, after edging down 0.1% the previous quarter.

In the fourth quarter, the Canadian dollar continued to appreciate in relation to the American dollar, rising 4.0%. This was reflected in a 3.8% rise in the unit labour costs of Canadian businesses in American dollars, the third consecutive quarterly increase. By comparison, American businesses' unit labour costs, which have fallen sharply since the beginning of 2009, declined by 1.6% in the fourth quarter.

The labour productivity figures for the fourth quarter, released today, were revised back to the first quarter of 2009.

The second wave of influenza A (H1N1), the seasonal flu and the vaccination campaign in November and December 2009 resulted in the loss of 27 million hours worked on a national basis. However, hours lost due to illness in the fourth quarter were not significantly different from hours lost due to illness in previous years. Since 2000, the proportion of hours lost because of illness or child care obligations in the fourth quarter has ranged from 2.7% in 2001 to 3.2% in 2006. The proportion in the fourth quarter of 2009 was 3.1%.

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