The labour productivity of Canadian businesses increased for the third consecutive quarter, rising 0.4% in the first quarter following a 0.3% advance in the previous quarter.
Businesses boosted production in the first quarter while further increasing hours worked.
The real gross domestic product (GDP) of businesses increased 1.2% in the first quarter, its largest advance in a year. Both goods-producing businesses and services-producing businesses contributed to the increase in GDP. The biggest gain was in manufacturing.
Hours worked in the business sector were up 0.7%, following a 0.5% increase the previous quarter. Employment growth accelerated, rising by 0.9%, after holding steady in the fourth quarter, while hours worked per job edged down 0.2%.
The overall gain in business productivity in the first quarter was attributable to goods-producing businesses (+1.2%), following a 0.1% decline in the fourth quarter. Construction (+2.2%) and manufacturing (+0.8%) were the main contributor to this increase, while mining and oil and gas extraction posted a sharp decline (-3.2%).
In services-producing businesses, productivity was unchanged. Productivity gains in retail trade, transportation and warehousing, and administrative services were offset by declines in wholesale trade and professional services.
In the United States, productivity in the business sector edged up 0.2% in the first quarter, a slower rate of growth than in the previous quarter (+0.7%).
In Canadian businesses, labour costs per unit of production increased 0.6% in the first quarter, similar to the rate observed in each of the previous three quarters.
Average compensation per hour worked again increased faster than productivity, growing 1.0% in the first quarter, echoing the results of the previous two quarters.
The value of the Canadian dollar in relation to the US dollar rose at roughly the same pace in the first quarter compared with the previous quarter (+2.7%). That was reflected in a 3.3% increase in the unit labour costs of Canadian businesses in American dollars, the same growth rate as in the previous quarter.
By comparison, American business unit labour costs grew by 0.4% in the first quarter, after falling 0.7% in the fourth quarter.