Labour productivity unchanged in 2009: Statistics Canada

Increases in Quebec, P.E.I., Manitoba, B.C. and Yukon
||Last Updated: 11/23/2010

Labour productivity in Canada’s business sector in 2009 increased in Prince Edward Island, Quebec, Manitoba, British Columbia and the Yukon, according to Statistics Canada. Nationally, productivity was unchanged in 2009, after decreasing by 0.8 per cent a year earlier, according to a revised report of estimates released in June.

The strongest growth in business productivity occurred in Quebec, with an increase of two per cent. 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.

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 three per cent in 2009, the same as the previous year. Provincially, Newfoundland and Labrador had the largest increase (9.4 per cent) in average hourly compensation.

Nationally, productivity of services-producing businesses increased 1.2 per cent, while that of the goods-producing businesses remained unchanged after three consecutive years of decreases. Real gross domestic product (GDP) fell 9.0 per cent in the goods-producing businesses and 1.0 per cent in the services-producing businesses.

Atlantic provinces

Business productivity rose 0.4 per cent in Prince Edward Island, the only province in Atlantic Canada to record an increase. Real GDP of businesses, which fell 1.9 per cent, was accompanied by an even sharper decline of 2.4 per cent 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-per-cent 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 per cent in 2008. Construction was the main contributor to a 1.7 per cent decline in real GDP.

In Newfoundland and Labrador, productivity fell 8.7 per cent 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 per cent, also the largest decrease among the provinces.

Central Canada

In Quebec, most industries contributed to the two per cent 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 per cent because of substantial declines in forestry and manufacturing, especially transportation equipment. Hours worked declined 3.7 per cent, with cuts in every industry except finance, insurance and real estate. Manufacturing productivity in Quebec was up 0.9 per cent, the seventh consecutive year of growth.

In Ontario, productivity declined 0.3 per cent compared with a 1.8-per-cent 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 per cent, a smaller decline than in 2008. Output and hours worked in manufacturing both fell by more than 10 per cent, the fifth consecutive decline in hours worked.

Western provinces

In Manitoba, business productivity rose 0.9 per cent, after remaining unchanged in 2008. Hours worked fell by 1.9 per cent, more than twice the decline of 0.9 per cent in real GDP. The main contributors to the decline in output were agriculture and manufacturing.

In Saskatchewan, business productivity declined 4.1 per cent, compared with a 3.2-per-cent gain in 2008 that led all provinces. Hours worked fell by 2.1 per cent in 2009, while real GDP of businesses declined (six per cent) 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 per cent, 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 per cent, mainly a result of declines in construction and manufacturing. Hours worked in businesses fell 5.5 per cent, 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 per cent in 2009. Real GDP of businesses declined by 3.9 per cent, while hours worked fell by 5.2 per cent. 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.

The territories

Business productivity in Yukon rebounded with a 0.6-per-cent gain in 2009, as real output grew at a faster pace than hours worked. This followed a six-per-cent 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 per cent, following a sharp 8.8 per cent drop in 2008. Substantially lower output by diamond mines due to weaker global demand was responsible for the decrease. Hours worked declined 12.2 per cent, the largest drop in the country.

In Nunavut, productivity fell 12.7 per cent in 2009. Business output was down sharply with the end of construction at the Meadowbank Gold Mine.

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