MNI DATA ANALYSIS:Canada 3Q Labor Productivity +0.3%;ULC +0.2%>

By Yali N'Diaye 

     OTTAWA (MNI) - A slowdown in business output combined with a 

rebound in hours worked in the third quarter translated into a slower 

labor productivity growth of 0.3% after a 0.7% gain in the second 

quarter, Statistics Canada reported Tuesday. 

     Productivity rose 0.3% in goods-producing industries and 0.2% in 

services. 

     Meanwhile, average compensation per hour worked was up 0.5% in the 

third quarter, picking up from 0.1% in the second quarter, exceeding the 

0.3% gain in productivity, which led to higher unit labor costs (+0.2%). 

     The pickup in compensation, about three quarters of which are made 

of wages, will be welcomed by the Bank of Canada, which continues to 

stress that wage growth should be higher at this stage of the cycle. 

     Gains were led by goods-producing industries, where compensation 

rose 0.7%, while it increased 0.4% for services. 

     However, on a year-over-year basis, hourly compensation growth 

slowed to 2.5% in the third quarter, the smallest gain since a1.3% drop 

in the second quarter 2017. 

     Productivity data are one component of the BOC' wage-common that 

measures underlying wage growth. 

     Labor Force Survey data released Nov. 2 showed that average hourly 

wages for permanent workers were up 1.9% year-over-year in October, the 

lowest rate since August 2017 and the fifth consecutive monthly 

slowdown. 

     The slowdown in business output was led by goods-producing 

industries in the third quarter, which contracted 0.2%, with declines in 

construction and quarrying and mining and oil and gas extraction. 

Services output expanded by 0.7%. 

     Services also drove the rebound in hours worked, as they increased 

0.5% in the sector, while they were down 0.5% in the goods sector. 

     Thebusiness output growth slowdown was in line with the overall GDP 

growth deceleration to an annualized rate of 2.0% in the third quarter 

from 2.0% in the second quarter. 

--MNI Ottawa Bureau; yali.ndiaye@marketnews.com

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