Labour Productivity in Canada Declines in Q2, Jobs Up

Labour productivity in Canada experienced a decline of 0.2% in the second quarter of 2024, following a similar decrease of 0.3% in the previous quarter. This decline contrasts with a 0.3% increase noted in the fourth quarter of 2023.
In the same period, business output and hours worked both increased at a slightly faster rate than in the previous quarter. However, the growth in output was slightly lower than that of hours worked, leading to the observed decline in productivity. Real gross domestic product (GDP) for businesses rose by 0.5% in the second quarter, following a 0.2% increase in the previous quarter.
The growth in hours worked in the business sector accelerated to 0.6% in the second quarter, up from 0.4% in the previous quarter. This increase was attributed to a 0.7% rise in the number of jobs, while average hours worked remained virtually unchanged.
Service-producing businesses were primarily responsible for the productivity decline, recording a 0.3% decrease. Notable declines were observed in various service sectors, including information and cultural industries, real estate services, and professional services. In contrast, goods-producing businesses saw a slight productivity increase of 0.1%, driven by gains in the mining and oil and gas extraction sector.
Unit labour costs, which reflect the costs of wages and benefits per unit of output, rose by 0.8% in the second quarter due to a 0.6% increase in hourly compensation. This growth in unit labour costs represents a slowdown compared to the 1.3% increase recorded in the first quarter of 2024.