Productivity Growth and Capacity Utilization in Canadian Business Industries

This article in the Economic Insights series reports the impact of correcting for variations in capacity utilization on multifactor productivity growth in Canadian business industries. It is based on a recently released Statistics Canada research paper. Results show that multifactor productivity growth is procyclical for almost all business industries, and that such pro-cyclicality largely reflects variations in capacity utilization in some industries, especially in manufacturing and mining.