Labour productivity, hourly compensation and unit labour cost, second quarter 2024
Released: 2024-09-05
Second quarter 2024
-0.2% 
(quarterly change)
Productivity declines moderately in the second quarter, as in the previous quarter
Labour productivity of Canadian businesses edged down 0.2% in the second quarter, after posting a similar decline in the previous quarter (-0.3%) and a 0.3% increase in the fourth quarter of 2023.
Chart 1
In the second quarter, business output grows at a rate similar to that of hours worked
In the second quarter of 2024, business output and hours worked both increased at a slightly faster pace than in the previous quarter. However, growth of output was slightly lower than that of hours worked, resulting in a moderate decline in productivity in the second quarter.
Real gross domestic product of businesses rose 0.5% in the second quarter, following a 0.2% increase in the previous quarter. This was the highest quarterly growth rate since the first quarter of 2023 (+0.9%).
Growth in hours worked accelerates slightly in the second quarter
In the second quarter, growth in hours worked in the business sector, which had reached 0.4% in the previous quarter, accelerated slightly to 0.6%.
This slightly faster pace of growth in hours worked reflects the 0.7% increase in the number of jobs in the second quarter, while average hours worked (-0.1%) were virtually stable.
In the second quarter, hours worked increased in both service-producing businesses (+0.8%) and goods-producing businesses (+0.3%), as the increase was widespread in all main industry sectors. Only the accommodation and food services (-0.6%), retail trade (-0.2%) and manufacturing (-0.1%) sectors posted declines, albeit moderate, while hours worked in administrative services were essentially unchanged.
Service-producing businesses contribute the most to the overall decline in productivity
In the second quarter, the productivity decline in the business sector was mainly attributable to service-producing businesses, which recorded a 0.3% decrease. This was largely due to declines in most service sectors, notably information and cultural industries (-2.1%), real estate services (-1.5%) and professional services (-0.9%).
For goods-producing businesses, productivity edged up by 0.1% in the second quarter, due to an increase in the mining and oil and gas extraction sector (+1.8%), which more than offset the decreases observed in the other goods sectors.
Overall, productivity was down in 11 of the 16 main industry sectors.
Growth in unit labour costs slows in the second quarter
With the 0.2% decrease in productivity, a 0.6% growth in hourly compensation resulted in a 0.8% rise in unit labour costs of businesses in the second quarter. This represents a slowdown compared with the 1.3% increase recorded in the first quarter. The slower pace of growth in hourly compensation (+0.6%) compared with the previous quarter (+1.0%) was the main factor contributing to the slowdown.
Unit labour costs represent the costs of wages and benefits per unit of output.
Learn more about labour productivity
To learn more about productivity, the factors that influence it and why it matters for Canadians, listen to the Eh Sayers podcast episode, "Why economists are sounding the alarm on productivity."
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Sustainable Development Goals
On January 1, 2016, the world officially began implementing the 2030 Agenda for Sustainable Development—the United Nations' transformative plan of action that addresses urgent global challenges over the following 15 years. The plan is based on 17 specific Sustainable Development Goals (SDGs).
The release "Labour productivity, hourly compensation and unit labour cost" is an example of how Statistics Canada supports the reporting on the global SDGs. This release will be used to help measure the following goal:
Note to readers
Revisions
With this release, data were revised back to the first quarter of 2023 at the aggregate and industry levels. These revisions are consistent with those incorporated in the release on quarterly gross domestic product (GDP) by income and expenditure and the release on monthly GDP by industry, released on August 30, 2024.
Productivity measures
The term productivity in this release refers to labour productivity. For the purposes of this analysis, labour productivity and related variables cover the business sector only.
Labour productivity is a measure of real GDP per hour worked.
Unit labour cost is defined as the cost of workers' wages and benefits per unit of real GDP.
The approach to measuring real output in the business sector differs from the one that is used in the estimates by industry. For the business sector, output is measured using the expenditure-based GDP approach at market prices. This approach is similar to that used for the quarterly measures of productivity in the United States. However, output by industry is based on the value added at basic prices.
All the growth rates reported in this release are rounded to one decimal place. They are calculated with index numbers rounded to three decimal places, which are now available in data tables.
All necessary basic variables for productivity analyses (such as hours worked, employment, output and compensation) are seasonally adjusted. For information on seasonal adjustment, see Seasonally adjusted data – Frequently asked questions.
Next release
Labour productivity, hourly compensation and unit labour cost data for the third quarter will be released on December 4.
Products
The document "Labour productivity measurement at Statistics Canada," which is part of Latest Developments in the Canadian Economic Accounts (13-605-X), is now available.
The study, "Canadian regional labour statistics and inter-regional movements of paid workers, 2001 to 2021," which is part of Latest Developments in the Canadian Economic Accounts (13-605-X), is available.
The Economic accounts statistics portal, accessible from the Subjects module of the Statistics Canada website, features an up-to-date portrait of national and provincial economies and their structures.
The Latest Developments in the Canadian Economic Accounts (13-605-X) is available.
The User Guide: Canadian System of Macroeconomic Accounts (13-606-G) is available.
The Methodological Guide: Canadian System of Macroeconomic Accounts (13-607-X) is available.
Contact information
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; infostats@statcan.gc.ca) or Media Relations (statcan.mediahotline-ligneinfomedias.statcan@statcan.gc.ca).
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