Labour Productivity Declines in Canada for Third Consecutive Quarter

Statistics Canada has released data on labour productivity, hourly compensation, and unit labour costs for the third quarter of 2024. The report indicates a decline in labour productivity by 0.4% compared to the previous quarter. This marks the third consecutive quarter of declining productivity, following decreases of 0.1% in the second quarter and 0.2% in the first quarter.

The decrease in productivity is attributed to a slowdown in the growth of business output, which increased by only 0.1% in the third quarter, down from a 0.5% rise in the previous quarter. Meanwhile, hours worked in the business sector continued to grow, rising by 0.5% in the third quarter.

Hourly compensation increased by 1.0% during the same period, leading to a 1.4% rise in unit labour costs. This increase in unit labour costs was faster than the 0.8% growth observed in the second quarter.

The report also highlights that productivity fell in most industry sectors. Goods-producing businesses experienced a 0.7% decline in productivity, while service-producing businesses saw a 0.3% decrease. However, some sectors, such as utilities, retail trade, administrative services, and finance and insurance, reported productivity gains.

The data release includes revisions to previous quarters, aligning with updates in gross domestic product data by income and expenditure, and by industry.