Labour productivity, hourly compensation and unit labour cost, fourth quarter 2024
Released: 2025-03-05
Fourth quarter 2024
0.6%
(quarterly change)
Productivity is on the rise again after little change in the first three quarters of 2024
Labour productivity of Canadian businesses increased 0.6% in the fourth quarter, after posting slight variations in each of the first three quarters of 2024. This was the highest quarterly growth rate in a year. For 2024, labour productivity of businesses resumed growth, rising by 0.6%, after declining over the previous three years.
In the fourth quarter, businesses increased their output at twice the rate of the previous quarter, while the hours worked devoted to this output continued to rise, but at half the rate of the previous quarter. As a result, productivity grew during the fourth quarter.
The pace of growth in real gross domestic product (GDP) of businesses accelerated to 0.8% in the fourth quarter, double the pace observed in the previous quarter.
Service-producing businesses are mainly responsible for the growth in business productivity
In the fourth quarter, productivity growth was mainly attributable to service-producing businesses, which recorded a 0.6% growth, driven by increases in most service sectors. Only accommodation and food services (-1.3%) and administrative services (-0.3%) recorded declines in their productivity during the quarter.
Meanwhile, productivity in goods-producing businesses fell 0.4% in the fourth quarter, following a 0.6% decline in the previous quarter. Only the agriculture and forestry sector (+1.6%) saw a quarterly increase. The mining and oil and gas extraction, utilities, construction and manufacturing sectors all posted decreases in the fourth quarter.
Overall, productivity was up in 10 of the 16 main industry sectors in the fourth quarter.
Hours worked continue to grow, but at a slower pace
Hours worked in the business sector increased for the fourth consecutive quarter, up 0.2% in the fourth quarter. This was a slower rate of growth than in the third quarter (+0.4%) and the second quarter (+0.5%), but similar to the first quarter of 2024.
The growth in hours worked in the fourth quarter reflects the 0.5% increase in the number of jobs, while average hours worked decreased 0.3%.
In the fourth quarter, the growth in hours worked was mainly attributable to goods-producing businesses (+0.7%), while hours worked in service-producing businesses were essentially unchanged.
Overall, 11 of the 16 main industry sectors recorded increases in hours worked. The accommodation and food services sector (+3.3%) posted the largest increase in the fourth quarter.
Growth in unit labour costs slows in the fourth quarter
Unit labour costs—that is, the costs of labour required to produce one unit of output—of businesses edged up 0.2% in the fourth quarter, after rising 0.8% in the previous quarter. This was the lowest quarterly growth rate in a year.
The slight increase in unit labour costs in the fourth quarter resulted from a slightly higher growth in average compensation per hour worked (+0.8%) rather than in productivity (+0.6%).
In the fourth quarter, hourly compensation continued to grow at a pace comparable to that of the previous two quarters.
Labour productivity in 2024
Labour productivity of businesses resumed growth in 2024, rising by 0.6%, after declining over the previous three years. This annual growth was mainly due to the increase in the fourth quarter of 2024, productivity having been essentially stable over the rest of the year.
In 2024, growth in real GDP of businesses (+1.1%) continued at the same pace as the previous year. At the same time, growth in hours worked was limited to 0.6%, compared with 3.3% in 2023, allowing productivity to grow for the first time in four years.
With productivity up 0.6% in 2024, the 4.3% increase in hourly compensation during the year resulted in a 3.7% growth in unit labour costs of businesses. This was the lowest annual growth rate for unit labour costs in four years.
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 1997 at the aggregate and industry levels. These data updates are consistent with those incorporated in the annual benchmarks on labour productivity and related measures at the national and provincial/territorial levels, released on February 10, 2025. They are also consistent with those incorporated in the quarterly gross domestic product (GDP) by income and expenditure and monthly GDP by industry, released on February 28, 2025.
In addition, all index series (except for GDP and the implicit price deflator) at the aggregate level were subject to revision going back to 1981, as a result of updates to the values for the 2017 reference year. However, the resulting revisions to growth rates were negligible.
Finally, the data in this release do not reflect the recent revisions to the Labour Force Survey (LFS) released on January 24, 2025. These historical revisions of the LFS will be incorporated in the next release on June 4, 2025.
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 first quarter of 2025 will be released on June 4, 2025.
Products
The document "Labour productivity measurement at Statistics Canada," which is part of Latest Developments in the Canadian Economic Accounts (), is available. 13-605-X
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 (), is available. 13-605-X
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 () is available. 13-605-X
The User Guide: Canadian System of Macroeconomic Accounts () is available. 13-606-G
The Methodological Guide: Canadian System of Macroeconomic Accounts () is available. 13-607-X
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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