Ottawa, ON — Labour productivity of the business sector increased in Prince Edward Island, Quebec, Manitoba and British Columbia as well as Yukon in 2009, Statistics Canada said in its most recent look at the subject. At the national level, productivity was unchanged in 2009, after decreasing by 0.8% a year earlier.
The strongest growth in business productivity occurred in Quebec in 2009, where it increased by 2.0%. The largest declines occurred in the resource-based economies of Newfoundland and Labrador, Saskatchewan and Alberta.
Both business output and hours worked fell in all provinces and territories except the Yukon.
Nationally, productivity of services-producing businesses increased 1.2%, while that of the goods-producing businesses remained unchanged after three consecutive years of decreases. Real gross domestic product (GDP) fell 9.0% in the goods-producing businesses and 1.0% in the services-producing businesses.
In 2009, businesses adjusted to the economic downturn by sharply reducing hours worked. The weakness in output and in the employment market was confined mostly to the first half of the year.
Average hourly compensation in Canadian businesses rose 3.0% in 2009, same as the previous year. Provincially, Newfoundland and Labrador (+9.4%) had the largest increase in average hourly compensation.
Business productivity rose 0.4% in Prince Edward Island; the only province in Atlantic Canada to record an increase. Real GDP of businesses, which fell 1.9%, was accompanied by an even sharper decline of 2.4% in hours worked.
In Nova Scotia, productivity was unchanged for a second consecutive year, as real GDP contracted at the same pace as hours worked. A 1.5% decrease in output was due largely to substantial declines in mining and oil and gas extraction and in manufacturing.
In New Brunswick, business productivity was also unchanged after falling 2.7% in 2008. Construction was the main contributor to a 1.7% decline in real GDP.
In Newfoundland and Labrador, productivity fell 8.7% in 2009, the largest decline among the provinces. Real output was down for the first time since 2004, because of a sharp downturn in oil and metallic mineral extraction. At the same time, hours worked fell by 6.3%, also the largest decrease among the provinces.
In Quebec, most industries contributed to the 2.0% productivity increase. Large advances occurred in retail trade, transportation and warehousing, and the information and cultural industries.
Real GDP of Quebec businesses fell 1.8%, the result of substantial declines in forestry and manufacturing, especially transportation equipment. Hours worked declined 3.7%, with cuts in every industry except finance, insurance and real estate. Manufacturing productivity in Quebec was up 0.9%, its seventh consecutive year of growth.
In Ontario, productivity declined 0.3% compared with a 1.8% decline in 2008. Manufacturing, mining, and transportation and warehousing were responsible for almost the entire 2009 decrease. Weakness in the manufacturing sector, especially the motor vehicle and parts industry, again lowered growth in business output.
Manufacturing productivity in Ontario fell 1.2%, a smaller decline than in 2008. Output and hours worked in manufacturing both fell by more than 10%. It was the fifth consecutive decline in hours worked.
In Manitoba, business productivity rose 0.9%, after remaining unchanged in 2008. Hours worked fell by 1.9%, more than twice the decline of 0.9% in real GDP. The main contributors to the decline in output were agriculture and manufacturing.
In Saskatchewan, business productivity declined 4.1%, compared with a 3.2% gain in 2008 that led all provinces. Hours worked fell by 2.1% in 2009, while real GDP of businesses declined (-6.0%) for the first time since 2006, primarily because of a steep decline in mining, oil and gas production.
In Alberta, business productivity was down 1.3%, the third consecutive decrease. The main contributors to the productivity decline were construction, manufacturing, wholesale trade, and transportation and warehousing. Real GDP of businesses fell 6.7%, mainly a result of declines in construction and manufacturing. Hours worked in businesses fell 5.5%, with the largest declines in mining and oil and gas extraction and in construction.
After two consecutive annual decreases, business productivity in British Columbia rebounded by 1.2% in 2009. Real GDP of businesses declined by 3.9%, while hours worked fell by 5.2%. The weakness in real GDP was due primarily to manufacturing and forestry. The main contributors to the decrease in hours worked were forestry, mining, construction, manufacturing and wholesale trade.
Business productivity in Yukon rebounded with a 0.6% gain in 2009, as real output grew at a faster pace than hours worked. This followed a 6.0% productivity decline in 2008. The main factors in increases in both real output and hours worked were mining operations and construction work associated with the development of a new mine.
In the Northwest Territories, productivity fell 3.4%, following a sharp 8.8% drop in 2008. Substantially lower output by diamond mines due to weaker global demand was responsible for the decrease. Hours worked declined 12.2%, the largest drop in the country.
In Nunavut, productivity fell 12.7% in 2009. Business output was down sharply with the end of construction at the Meadowbank Gold Mine.