Canada's Labor Productivity Unexpectedly Rises 0.1% During Third Quarter
Canadian labor productivity unexpectedly rose 0.1 percent in the third quarter after falling in the previous three-month period, government figures showed.
Business output increased 0.1 percent and hours worked were unchanged, Statistics Canada said today in Ottawa. Economists predicted the measure of worker output per hour would fall 0.1 percent, based on the median of 14 estimates in a Bloomberg survey. Statistics Canada also revised its estimate of the second-quarter decline to 0.6 percent from 0.8 percent.
Canadian companies have “challenges with competitiveness” and need to invest more to boost exports, Bank of Canada Governor Mark Carney said yesterday in Toronto. Weak productivity and “persistent strength” in the Canadian dollar could restrain exports and hinder the country’s economic recovery, Carney also said.
Unit labor costs rose 0.6 percent in the third quarter, reflecting a gain in hourly compensation, Statistics Canada’s report said. Measured in U.S. dollars, unit labor costs fell 0.5 percent, the first decline since the first quarter of 2009, as the Canadian dollar weakened by 1.1 percent.
Labor productivity was 1.1 percent higher in the third quarter than the same period a year earlier.
Companies have started to use the stronger Canadian dollar to purchase new imported equipment. The currency has traded close to parity with the U.S. dollar for most of this year.
Canada’s 1 percent annualized growth rate in the third quarter was led in part by a 4.6 percent gain for business investment in plant and equipment, the fastest since 2005, Statistics Canada said Nov. 30.