May 13, 2009

Canadian productivity falls 0.5 percent

Canadian productivity fell 0.5 percent in 2008 as real gross domestic product growth decelerated and hours worked rose, the government reported Wednesday.

The productivity drop in the world's ninth-largest economy reversed 2007's 0.5 percent productivity rise, Statistics Canada said.

Productivity in the goods-producing sector fell 2.2 percent, the first decline in four years, the bureau said. In the services sector, it rose 0.4 percent.

In Ontario, Canada's largest economy, productivity fell 0.6 percent, the first contraction since 2003, when the Canadian dollar started to appreciate against its U.S. counterpart, the bureau said.

Productivity in No. 2 Canadian economy Quebec fell 0.2 percent, the first drop since 2004.

Productivity rose in four provinces and one territory, with Saskatchewan posting the strongest provincial productivity increase, at 1.8 percent, followed by Nova Scotia at 0.9 percent, Manitoba at 0.8 percent and Prince Edward Island at 0.2 percent.

The nation's greatest growth was in Nunavut, at 9.5 percent. Nunavut, a territory for only 10 years, is also Canada's least populated and geographically largest subdivision, about the size of Western Europe.

The continued expansion of the job market for most of the year led to a national average 3.7 percent increase in hourly compensation, slower than 2007's 4 percent gain, Statistics Canada said.

Alberta posted the strongest provincial hourly-compensation increase, at 7 percent, followed by Saskatchewan at 5 percent and Manitoba at 4.3 percent. These three provinces posted the strongest gains in jobs among all provinces in 2008, Statistics Canada said.