Canadian Labour Productivity Declines in Second Quarter of 2024

In the second quarter of 2024, the labour productivity of Canadian businesses decreased by 0.2%. This follows a decline of 0.3% in the previous quarter and a 0.3% increase in the fourth quarter of 2023. The decline in productivity is attributed to a growth in hours worked that outpaced the growth in business output.

Key statistics from the report include:

• Business Output and Hours Worked: Both business output and hours worked increased at a slightly faster pace compared to the previous quarter. However, the growth of output was lower than that of hours worked, leading to the productivity decline.
• Real Gross Domestic Product (GDP): The real GDP of businesses rose by 0.5% in the second quarter, following a 0.2% increase in the previous quarter.
• Growth in Hours Worked: The growth in hours worked in the business sector accelerated from 0.4% in the previous quarter to 0.6%. This growth is linked to a 0.7% increase in the number of jobs, while average hours worked remained stable.
• Sector Performance: Service-producing businesses contributed significantly to the productivity decline, recording a 0.3% decrease. In contrast, goods-producing businesses saw a slight productivity increase of 0.1%.
• Unit Labour Costs: With the productivity decrease, unit labour costs rose by 0.8% in the second quarter, a slowdown from the 1.3% increase in the first quarter. This rise is attributed to a 0.6% growth in hourly compensation.

The next release of labour productivity, hourly compensation, and unit labour cost data is scheduled for December 4, 2024.