Multifactor productivity growth estimates and industry productivity database, 2017
Multifactor productivity, measured as output per unit of combined labour and capital inputs, rose 1.9% in the Canadian business sector in 2017, following no growth in 2016 and a 1.0% decline in 2015. The increase in 2017 reflected 3.7% growth in output and a 1.8% gain in the combined inputs of capital and labour.
These estimates incorporate the most recent supply-use tables, and the latest estimates for fixed capital, hours worked and gross domestic product.
Multifactor productivity measures the extent to which inputs are used efficiently in the production process. Growth in multifactor productivity is often associated with technological change, organizational change or economies of scale.
Multifactor productivity is one of the three components of labour productivity, the other two being capital intensity and upgrading labour skills. Labour productivity in the business sector increased 2.2% in 2017, mostly due to growth in multifactor productivity (+1.9 percentage points). Capital intensity (+0.1 percentage points) and skills upgrading (+0.2 percentage points) also contributed to the increase.
The rebound in multifactor productivity growth in 2017 mirrors the performance in the post-recession period
Productivity growth in the Canadian business sector increased after the financial crisis of 2008 and 2009, following a decade of weak growth. Labour productivity growth rose an average of 1.3% per year from 2010 to 2017, compared with 0.7% per year from 2000 to 2010.
The increase in labour productivity growth after 2010 was entirely due to an increase in multifactor productivity growth over that period. From 2010 to 2017, multifactor productivity rose 0.6% per year, stronger than the average annual multifactor productivity growth from 1980 to 2000 (+0.4%).
Note to readers
Multifactor productivity estimates by major business sector for 1961 to 2017 are now available. The detailed industry productivity database for 1961 to 2015 is also now available.
Data in this release reflect the latest supply-use tables for 2015, published in The Daily on November 8, 2018; data on fixed capital, published in The Daily on November 20, 2018; data on real gross domestic product, published in The Daily on November 30, 2018; data on hours worked, published in The Daily on February 22, 2019. The estimate of skills upgrading that captures the compositional shifts in hours worked by education, age and class of workers (paid vs. self-employed workers) is revised to incorporate the 2016 Census of Population. In addition, year 2012 has been adopted as a reference year instead of 2007 for multifactor productivity measures and related variables.
Multifactor productivity measures
Multifactor productivity measures at Statistics Canada are derived from a growth accounting framework that allows analysts to isolate the effects of increases in input intensity and skills upgrading on the growth in labour productivity.
The residual portion of labour productivity growth that is not attributable to gains in input intensity and skills upgrading is called growth in multifactor productivity. It measures the efficiency with which the inputs are used in production. Growth in this area is often associated with technological change, organizational change or economies of scale.
A description of the method used to derive productivity measures can be found in the "User Guide for Statistics Canada's Annual Multifactor Productivity Program," as part of The Canadian Productivity Review series (15-206-X) available on our website.
The documentation about revisions to multifactor productivity growth estimates can be found in "Revisions to the Multifactor Productivity Accounts" as part of The Canadian Productivity Review series (15-206-X), also available from our website.
For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.ca) or Media Relations (613-951-4636; STATCAN.mediahotline-ligneinfomedias.STATCAN@canada.ca).
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