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Labour productivity, hourly compensation and unit labour cost note to readers
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Second quarter 2009
This chapter presents a comprehensive analysis comparing labour productivity growth in Canada and the United-States in recent years.
The term "productivity" herein refers to labour productivity. For the purposes of this analysis, labour productivity, gross domestic product (GDP), and unit labour cost cover the business sector only.
Calculations of the productivity growth rate and its related variables in the text and tables below are based on index numbers rounded to three decimal places. On CANSIM, the index numbers are rounded to one decimal place.
For more information about the productivity program, see the new National Economic Accounts module. You can also order a copy of a technical note about the quarterly estimates of productivity by sending an email to productivity.measures@statcan.gc.ca.
Revisions
The estimates for Canada were revised back to the first quarter of 2009 at the aggregate level and to the first quarter of 2008 at the industry level. In the United States, the Bureau of Labor Statistics recently revised historically its estimates of labour productivity in the business sector. The data released today incorporates revisions to the US data that affected GDP and hours worked. The latest revisions for the last four years of Canada's productivity and related variables were released in The Daily on June 16, 2009.
Labour productivity is the ratio of output to labour input (hours worked). Quarterly estimates of productivity are derived from a Fisher chained index of GDP, or of value added, in the business sector. Economic performance as measured by labour productivity must be interpreted carefully, since these estimates reflect changes in other inputs in addition to the growth in productive efficiency.
Labour compensation includes all payments in cash or in kind made by domestic producers to persons as remuneration for work. This includes salaries and supplementary labour income of paid workers, plus the imputed labour income of self-employed workers.
Unit labour cost is the labour cost per unit of output. It is calculated as the ratio of labour compensation to real value added. It is also the equivalent of the ratio of labour compensation per hour worked to labour productivity. The unit labour cost will increase when hourly compensation rises faster than labour productivity.
Unit labour cost in U.S. dollars is the equivalent of the ratio of Canadian unit labour cost to the exchange rate. This latter corresponds to the U.S. dollar value expressed in Canadian dollars.
