Productivity gains for Canada

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Increased activity in manufacturing spurs real GDP of goods-producing businesses

by Shop MT staff

The latest economic data from Statistics Canada, while modest, points to an improving economy.

After declining by more than 4.0 per cent in 2009, the real gross domestic product (GDP) of Canadian businesses and hours worked both rebounded in 2010, with the real GDP (+3.7 per cent) growing almost twice as fast as hours worked (+1.9 per cent).

Hours worked in businesses rose in every province and territory except New Brunswick (-1.2 per cent).

Every province except Quebec and Manitoba posted a higher rate of productivity growth in 2010 than in 2009. At the national level, business productivity rose 1.9 per cent in 2010 after declining by 0.3 per cent in 2009.

New Brunswick (+4.1 per cent) posted the largest increase in business productivity among the provinces in 2010. Manufacturing, forestry, wholesale and retail trade were the main contributors to this productivity boost.

Not surprisingly, the provinces with resource-based economies (Alberta, Saskatchewan and Newfoundland and Labrador) posted productivity gains above the national average. This was in sharp contrast with 2009, when these three provinces were among those experiencing the sharpest declines in productivity. Prince Edward Island also saw above-average productivity growth.

Central Canada: Manufacturing rebound in Quebec, Ontario

In Quebec, business productivity increased 0.3 per cent in 2010, following a 1.7 per cent advance in 2009. Overall, lower productivity in services-producing businesses slowed productivity growth in the business sector as a whole. In goods-producing businesses, productivity was up 1.9 per cent. The advance was widespread, with utilities posting the largest increase.

Chart: Statistics Canada

Labour productivity in the business sector by province and territory, 2010

The real GDP of Quebec businesses grew 2.6 per cent in 2010, led by residential construction and manufacturing. At the same time, hours worked rose by 2.3 per cent, with gains in every industry except utilities. For Quebec’s manufacturers, productivity was up for the eighth consecutive year (+0.4 per cent  in 2010).

In Ontario, business productivity increased 1.0 per cent in 2010, after remaining unchanged the previous year. Manufacturing and construction were responsible for the 2010 increase in productivity. The upswing in the manufacturing sector, especially the motor vehicle and parts industry, was a major factor in the upturn in business output.

After two years of declines, manufacturing productivity in Ontario rebounded with a 4.6 per cent gain in 2010. Manufacturing output rose 6.3 per cent, following two years of sharp declines. At the same time, hours worked rose by 1.6 per cent, after five consecutive annual decreases. In 2009, manufacturing output and hours worked both fell by more than 10 per cent.

Western provinces

Western Canada experienced productivity growth across the region, with Saskatchewan leading the way. Business productivity increased 3.7 per cent in 2010 following a 3.5 per cent decline in 2009.

Alberta saw a 2.9 per cent boost in 2010, following a 3.6 per cent decline in 2009 and further declines in 2008 and 2008. The largest contributors to the increase in productivity were manufacturing, wholesale trade, transportation and warehousing as well as finance. In Manitoba business productivity rose by 0.9 per cent in 2010, following a 1.2 per cent advance in 2009. Hours worked were up 1.0 per cent, less than half the growth rate in real GDP (+2.1 per cent

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