June 10 (Bloomberg) -- Canadian labor productivity rose 0.4 percent between January and March, less than half the pace forecast by economists, as much of the country’s output growth in the first quarter came from increases in hours worked.
Business output rose 1.2 percent and hours worked increased by 0.7 percent from the previous quarter, Statistics Canada said today in Ottawa. Economists predicted the productivity measure would increase 0.9 percent, based on the median of 13 estimates in a Bloomberg survey.
Productivity is a measure of how much an employee produces in an hour of work, and lower efficiency limits how fast an economy can grow without sparking inflation. Bank of Canada Governor Mark Carney has said companies need to use a rising currency to boost investment and regain competitiveness lost to a global recession and emerging-market rivals.
Unit labor costs rose 0.6 percent in the first quarter, Statistics Canada’s report said.
Measured in U.S. dollars, unit labor costs rose 3.3 percent as the Canadian dollar strengthened 2.7 percent against its U.S. counterpart. U.S. unit labor costs rose by 0.4 percent between January and March, according to Statistics Canada.
The agency today also reduced its estimate of the fourth-quarter productivity gain to 0.3 percent from 0.5 percent.
Labor productivity was 0.7 percent higher in the first quarter than the same period a year earlier, the slowest annual rate since the third quarter of 2009.
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