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Labour productivity, hourly compensation and unit labour cost, third quarter 2015

Released: 2015-12-04

Labour productivity

Third quarter 2015

0.1% 

(quarterly change)

Labour productivity of Canadian businesses edged up 0.1% in the third quarter, following two consecutive quarterly declines.

Real gross domestic product (GDP) of businesses resumed growth in the third quarter, following two straight quarters of decline, while hours worked increased at a similar pace to that of the previous quarter.

Chart 1  Chart 1: Real gross domestic product of businesses increases at a slightly faster pace than hours worked
Real gross domestic product of businesses increases at a slightly faster pace than hours worked

Real GDP of businesses rose 0.7% in the third quarter, following declines in the first (-0.4%) and second (-0.3%) quarters. Both goods-producing and service-producing businesses increased their output in the third quarter. Mining, quarrying, and oil and gas extraction were the main contributors to the growth.

Hours worked devoted to production in the business sector rose 0.6% in the third quarter, matching the increase of the second quarter. The gain in the third quarter was attributable to service-producing businesses (+1.1%). The increase was widespread in all the main service industrial sectors, led by arts, entertainment and recreation (+3.5%). In contrast, hours worked in goods-producing businesses declined 0.5%, after advancing 0.5% the previous quarter.

Goods-producing businesses (+1.4%) were the main contributor to productivity growth in the business sector in the third quarter, following a substantial 2.5% decline in the second quarter. The increase was widespread, with the largest gains in mining and oil and gas extraction (+6.4%), agriculture and forestry (+1.9%) as well as manufacturing (+0.7%). Utilities and construction posted modest gains.

In service-producing businesses, productivity declined 0.7% in the third quarter after being stable in the previous quarter. Productivity was down in every major service industry sector except real estate services (+1.1%). The largest declines were in information and cultural industries (-2.4%), wholesale trade (-2.0%), arts, entertainment and recreation (-2.0%) and professional services (-1.5%).

In the United States, the labour productivity of businesses rose 0.7% in the third quarter, following a 0.9% increase in the second quarter. Real GDP of American businesses rose 0.6% in the third quarter, while hours worked (-0.1%) decreased for the first time since the third quarter of 2009. In the second quarter, real GDP (+1.2%) and hours worked (+0.3%) in American businesses increased.

For Canadian businesses, the labour cost per unit of output decreased 0.5% in the third quarter, after increasing the two previous quarters.

The average compensation per hour worked (-0.4%) declined for the second straight quarter, down 0.7% in goods-producing businesses and down 0.1% in service-producing businesses in the third quarter. Significant declines were observed in arts, entertainment and recreation, information and cultural industries, manufacturing as well as transportation and warehousing services. Construction was also down.

In American dollars, the unit labour cost of Canadian businesses fell 6.6% in the third quarter, after increasing 1.3% the previous quarter. The average value of the Canadian dollar relative to the American dollar decreased 6.0% during the quarter, after rising 0.9% in the second quarter.

By comparison, the unit labour cost of American businesses was up 0.3%, after increasing 0.5% the previous 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 quarterly gross domestic product (GDP) by income and expenditure and monthly GDP by industry, published on December 1, 2015.

This release also incorporates revised annual benchmarks on the provincial and territorial economic accounts and GDP by industry published on November 10, 2015. It also takes into account historical revisions to the Labour Force Survey, published in January 2015 and revisions to the Survey of Employment Payroll and Hours, released in March 2015.

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.

All necessary basic variables for productivity analyses (such as hours worked, employment, output, and compensation) are seasonally adjusted. For information on seasonal adjustment, see Seasonally adjusted data – Frequently asked questions.

Next release

Labour productivity, hourly compensation and unit labour cost data for the fourth quarter of 2015 will be released on March 4, 2016.

Products

The publication Canadian Economic Accounts Quarterly Review (Catalogue number13-010-X) has been discontinued. Links to other releases from the national accounts can still be found in the System of macroeconomic accounts module, accessible from the Browse by key resource module of our website.

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; STATCAN.infostats-infostats.STATCAN@canada.ca) or Media Relations (613-951-4636; STATCAN.mediahotline-ligneinfomedias.STATCAN@canada.ca).

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