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Study: Productivity and economic growth continue to slow down

Ottawa - Growth in economic output and labour productivity in the business sector slowed considerably in every province between 2000 and 2010 compared with the late 1990s, according to a new study from Statistics Canada.


Ottawa – Growth in economic output and labour productivity in the business sector slowed considerably in every province between 2000 and 2010 compared with the late 1990s, according to a new study from Statistics Canada.

The slowdown was largely the result of two sectors: manufacturing in Central Canada and mining and oil and gas extraction in some provinces, including Alberta.

From 1997 to 2000, economic output in Canada’s business sector as a whole increased at an annual average rate of 5.9%. During the same period, labour productivity rose 3.1% a year.

In contrast, from 2000 to 2010, the pace of growth slowed considerably. Economic output rose at an average rate of 1.6% a year, while labour productivity increased 0.8% a year.

The manufacturing sector underwent major changes as a result of several factors, including exchange rate movements, increased global competition and slower growth in the United States, Canada’s main export market. Those changes led to slower export growth and slower growth in output and productivity from 2000 to 2010.

In the mining and oil and gas extraction sector, both conventional and non-conventional oil and gas extraction activities underwent expansion, accompanied by higher unit costs and lower levels of productivity.

Indeed, the slowdown in aggregate output and productivity growth was concentrated in the goods-producing sector in every province, with the impact in specific industries differing from province to province.

In general, the slowdown in aggregate output and productivity growth was more pronounced in Central Canada and the Atlantic Provinces than in Western Canada.