MRO Magazine

Labour productivity edges up slightly in the fourth quarter

Ottawa - Business output and hours worked to produce that output remained at almost the same levels in the fourth quarter of 2012 as in the previous quarter, according to the latest survey of Labour Productivity, Hourly Compensation and Unit...


Ottawa – Business output and hours worked to produce that output remained at almost the same levels in the fourth quarter of 2012 as in the previous quarter, according to the latest survey of Labour Productivity, Hourly Compensation and Unit Labour Cost from Statistics Canada.

Real gross domestic product (GDP) of businesses was unchanged in the fourth quarter, after rising 0.1% the previous quarter. The output of goods-producing businesses grew 0.1% in the fourth quarter, while that of service-producing businesses was unchanged.

Hours worked in the business sector, which increased in the first three quarters of 2012, showed little change in the fourth quarter (-0.1%). Hours worked in the service sector declined 0.1%, while hours worked in the goods-producing sector were unchanged.

Overall, there was little change in the productivity of both goods-producing businesses and service-producing businesses in the fourth quarter.

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Productivity in goods-producing businesses edged up 0.1% for a second consecutive quarter. Productivity gains in agriculture, forestry, fishing and hunting (+2.7%), utilities (+2.3%) and mining and oil and gas extraction (+1.6%) were partly offset by losses in manufacturing (-1.8%).

In service-producing businesses, productivity also edged up 0.1%, led by gains in retail trade and the finance, insurance and holding company sector. These increases were partly offset by declines in transportation and warehousing as well as in arts, entertainment and recreation.

Labour costs per unit of output in the business sector rose 0.6% in the fourth quarter, a slower pace than in the three previous quarters.

The increase in unit labour costs reflected mainly the growth in the average compensation per hour worked (+0.7%), which was the same pace as in the previous quarter.

Unit labour costs of Canadian businesses in American dollars grew 1.0% in the fourth quarter, after increasing 2.7% in the third quarter. The average value of the Canadian dollar relative to the American dollar rose 0.4% during the fourth quarter, compared with a 1.5% gain the previous quarter.

By comparison, the unit labour costs of American businesses increased 1.1% in the fourth quarter, following two quarterly declines.

Annual 2012

Labour productivity of Canadian businesses edged up 0.1% in 2012, following annual increases of 1.1% in 2011 and 1.6% in 2010. The real GDP of the business sector (+1.9%) and hours worked (+1.8%) both grew at a similar pace in 2012.

Productivity of the goods-producing industries rose 1.1% in 2012, mostly because of advances in manufacturing (+1.9%) and construction (+1.9%). These gains were partly offset by lower productivity in the service industries (-0.5%). With the exception of retail trade (+0.7%), wholesale trade (+0.3%) and professional services (+1.7%), productivity fell in all other service-producing industries in 2012.

By comparison, the annual growth of productivity of American businesses was 0.9% for 2012, up from 0.4% in 2011.

The difference in productivity between Canada and the United States in 2012 was mostly the result of a difference in the growth of real GDP of businesses, since the two countries had similar increases in hours worked. This was the first time since 2009 that real GDP growth was lower in the Canadian business sector (+1.9%) than in the American business sector (+2.8%).