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Labour productivity, hourly compensation and unit labour cost, third quarter 2013

Released: 2013-12-06

Labour productivity in Canadian businesses rose 0.2% in the third quarter, following a 0.4% gain in the second quarter.

Chart 1  Chart 1: Productivity of Canadian businesses continues to increase, but at a slower pace than in the previous quarter - Description and data table
Productivity of Canadian businesses continues to increase, but at a slower pace than in the previous quarter

Chart 1: Productivity of Canadian businesses continues to increase, but at a slower pace than in the previous quarter - Description and data table

Both the real output of businesses and hours worked grew at a faster pace in the third quarter than in the second quarter.

Real gross domestic product (GDP) of businesses increased 0.8%, its fastest pace since the third quarter of 2011 (+1.9%). Output was up in both goods-producing and service-producing businesses. Mining and oil and gas extraction, manufacturing, wholesale trade and retail trade were the main contributors to growth in the third quarter.

Hours worked in the business sector rose 0.6% after a flat second quarter. The weakness in hours worked in the second quarter was due in part to the flooding in Southern Alberta and the construction strike in Quebec, which occurred in the last two weeks of the second quarter.

Hours worked in goods-producing businesses rebounded 1.0% in the third quarter, as a result of strong growth in construction. In service-producing businesses, hours worked rose 0.4%, driven by increases in wholesale trade, real estate services and finance and insurance.

For a second consecutive quarter, the business sector productivity growth was attributable to service-producing businesses, as their productivity was up 0.3% in the third quarter. Retail trade (+1.0%), transportation and warehousing (+0.6%) and other business services (+1.6%) were the main sources of growth.

Productivity in goods-producing businesses declined 0.1% in the third quarter as productivity fell in utilities (-2.9%) and construction (-2.7%). Agriculture and forestry (+2.0%), mining and oil and gas extraction (+1.7%) as well as manufacturing (+1.3%) all posted productivity gains.

In the United States, the productivity of American businesses grew 0.4% in the third quarter, after advancing 0.5% in the second quarter.

Productivity in Canadian businesses increased at a slightly slower pace than hourly compensation (+0.3%) in the third quarter. As a result, labour cost per unit of output in Canadian businesses edged up 0.2%, similar to the pace of productivity for a third straight quarter.

When the 1.4% depreciation of the Canadian dollar against the American currency in the third quarter is factored in, the unit labour costs of Canadian businesses in US dollars declined 1.3%. This was the third consecutive quarter of decreases of 1.0% or more.

In comparison, the unit labour costs of American businesses fell 0.2%, after edging up 0.1% in the second quarter.

  Note to readers

Revisions

With this release on labour productivity and related measures, data were revised back to the first quarter of 2007 at the aggregate and industry levels. These revisions are consistent with those incorporated in the revised monthly gross domestic product (GDP) by industry published on October 31, 2013, and in the revised annual benchmarks on labour statistics by industry published on November 20, 2013.

Revisions to the labour productivity and its related measures data from 1997 to 2006 are scheduled for release on March 7, 2014, at the time of the data release for the fourth quarter.

Productivity measure

The term "productivity" in this release refers to labour productivity. For the purposes of this analysis, labour productivity and related variables cover the business sector only. Labour productivity is a measure of real GDP per hour worked. Unit labour cost is defined as the cost of workers' wages and benefits per unit of real GDP.

All the growth rates reported in this release are rounded to one decimal place. They are calculated with index numbers rounded to three decimal places, which are now available on CANSIM.

The National economic accounts module, accessible from the Browse by key resource module of our website, features an up-to-date portrait of national and provincial economies and their structure.

Links to other releases from the national accounts can be found in the third quarter 2013 issue of Canadian Economic Accounts Quarterly Review, Vol. 12, no. 3 (Catalogue number13-010-X). This publication will be updated on December 13, at the time of the release of the financial flow accounts and national balance sheet accounts.

Labour productivity, hourly compensation and unit labour cost data for the fourth quarter will be released on March 7, 2014.

Contact information

For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; infostats@statcan.gc.ca) or Media Relations (613-951-4636; mediahotline@statcan.gc.ca).

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