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Labour productivity, hourly compensation and unit labour cost
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Note to readers: Second quarter 2007
This chapter presents an analysis on labour productivity for the aggregate business sector and its constituent industries (15 two-digit NAICS industries) and sub-sectors (goods and services). The statistical series for total economy, business sector and non-commercial sector start with the first quarter of 1981, while those at industry level are available only back to the first quarter of 1997.
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 new National Economic Accounts module. You can also order a copy of a technical note about the quarterly estimates of productivity by sending an email to productivity.measures@statcan.gc.ca.
Revisions
With this release, Canadian estimates have been revised back to the first quarter of 2007 at the aggregate level and to the first quarter of 2006 at the industry level. In the United States, the Bureau of Labor Statistics recently made revisions to its labour productivity estimates for the years 2004 to 2006, incorporating recent revisions of the U.S. National Accounts by the Bureau of Economic Analysis.
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.
