Note to readers

Labour productivity, hourly compensation and unit labour cost

2004 and fourth quarter 2004

This chapter presents an analysis on labour productivity for the aggregate business sector and its constituent industries (15 two-digit) and two sectors (goods and services). The statistical series for these industries start as of the first quarter of 1997.

Since the release in last December, data in table 383-0008 for business sector have been expanded to include unit labour cost series in US dollars. Data by industry in table 383-0012 have also been expanded to include series on total economy.

In this chapter, the use of the term “productivity” refers to labour productivity. Calculations of the productivity growth rate and its related variables are based on index numbers rounded to one decimal place.

For more information about the productivity program, see the Overview and description of publications page online. You can also order a copy of a technical note about the quarterly estimates of productivity by sending an e-mail message to productivity.measures@statcan.gc.ca

Revisions

With this release, revisions have been made back to the first quarter of 2004.The recent estimates of the Labour Force Survey, which have been revised back to January 1976, are not incorporated. Those results will be incorporated in the next release of first quarter 2005 data.

Labour productivity is the ratio of output to labour input (hours worked). Quarterly estimates of productivity are derived from a Fisher chained index of GDP, or of value added, in the business sector. Economic performance as measured by labour productivity must be interpreted carefully, since these estimates reflect changes in other inputs in addition to the growth in productive efficiency.

Labour compensation includes all payments in cash or in kind made by domestic producers to persons as remuneration for work. This includes salaries and supplementary labour income of paid workers, plus the imputed labour income of self-employed workers.

Unit labour cost is the labour cost per unit of output. It is calculated as the ratio of labour compensation to real value added. It is also the equivalent of the ratio of labour compensation per hour worked to labour productivity. The unit labour cost will increase when hourly compensation rises faster than labour productivity.

Unit labour cost in US dollars is the equivalent of the ratio of Canadian unit labour cost to the exchange rate. This latter corresponds to the U.S. dollar value expressed in Canadian dollars.