Labour productivity of Canadian businesses rose slightly as economic output and hours worked declined sharply in the first quarter, Statistics Canada reported Wednesday.
Overall productivity, which measures real GDP per hour worked in Canada, rose 0.3% due to a 1.7% increase in productivity in the goods sector. The increase comes as the decline in first-quarter GDP and hours worked by employees was the largest since 1991's first quarter.
The number of hours worked dropped 2.2%, adding to the 1.3% decline in the previous period. The reduction in hours worked in the business sector more than offset the drop in first-quarter output, resulting in higher productivity figures.
The gain erases some of the 0.5% decline in productivity in the fourth quarter as output fell faster than hours worked.
But labour costs rose 0.8% in the period, which is about half the 1.7% increase registered in the fourth quarter. However, when comparing Canadian unit labour costs in U.S. dollars, costs fell for a third consecutive quarter because of the Canadian dollar's depreciation.
Over the last two quarters, productivity has followed a similar pattern in Canada and the U.S. American businesses posted a 0.4% first-quarter gain in productivity after a 0.1% decline in the previous period.