StatCan Text: Canada 2Q Labor Productivity -0.1%, ULC -0.8%>

     OTTAWA (MNI) - Following is the text of a press release published 

Wednesday by Statistics Canada: 

     Quarterly labour productivity (Second quarter 2017): -0.1% 

     Labour productivity edges down in the second quarter 

     Labour productivity of Canadian businesses edged down 0.1% in the 

second quarter following three consecutive quarters of growth. This 

decline followed a significant 1.3% increase in the first quarter. 

     The slight decrease in productivity in the second quarter reflects 

a recovery in hours worked after a quarter of decline, while growth in 

business output continued at a faster pace. 

     Real gross domestic product (GDP) of businesses rose 1.3% in the 

second quarter, up from 1.1% in the first quarter. This marked the third 

time in four quarters that GDP growth of businesses has been greater 

than 1.0%. As in the first quarter, growth was widespread in 

goods-producing and service-producing business industries. Only the 

agriculture and forestry sector posted a decline in production in the 

second quarter, falling for a third consecutive quarter. 

     GDP growth of businesses in the second quarter was accompanied by 

the largest increase in hours worked (+1.4%) since the fourth quarter of 

2003 (+1.9%). Hours worked rose at a comparable pace in both 

goods-producing (+1.2%) and service-producing (+1.4%) businesses. They 

were up in every major industrial sector except agriculture and forestry 

(-1.3%), information and cultural industries (-0.8%) and utilities 

(-0.3%). 

     Service-producing businesses (-0.3%) were the largest contributor 

to the decline in productivity in the second quarter, partially offset 

by a 0.6% increase in goods-producing businesses. 

     In goods-producing businesses, utilities (+3.6%) was the only 

industrial sector with increased productivity in the second quarter. On 

the other hand, productivity decreased 1.9% in the mining, quarrying and 

oil and gas extraction sector, while agriculture and forestry (-0.3%), 

manufacturing (-0.2%) and construction (-0.1%) edged down. 

     Productivity in service-producing businesses fell for the first 

time since the third quarter of 2015. Despite increases in retail trade 

(+1.4%), information and cultural industries (+1.0%), wholesale trade 

(+0.9%) and finance and insurance (+0.9%), the other service industries 

posted declines, led by a notable decrease in real estate services 

(-2.3%). 

     In the United States, the labour productivity of businesses rose 

0.2% in the second quarter, following a 0.2% decline in the previous 

quarter. The second quarter real GDP of American businesses (+0.8%) grew 

at a faster pace than the first quarter (+0.3%), while hours worked 

(+0.6%) increased at a similar pace (+0.5%). 

     A second consecutive decline in unit labour costs 

     For Canadian businesses, labour costs per unit of output fell for 

the second straight quarter, down 0.8% in the second quarter. 

     The decrease in unit labour costs primarily reflected a decline in 

the average compensation per hour worked (-0.9%), while productivity was 

stable. This was the first decrease in hourly compensation since the 

third quarter of 2015 (-0.4%). 

     Hourly compensation fell in goods-producing (-1.4%) and 

service-producing (-0.6%) businesses in the second quarter. Utilities 

(+2.2%), information and cultural industries (+0.7%), transportation and 

warehousing services (+0.4%) and finance and insurance (+0.1%) 

increased, while declines were widespread throughout the other 

industries. Mining, quarrying and oil and gas extraction (-4.1%), real 

estate services (-2.4%) and construction (-1.9%) posted the most notable 

declines. 

     Expressed in US dollars, unit labour costs of Canadian businesses 

fell 2.4% in the second quarter, following a 0.5% increase in the 

previous quarter. After rising 0.8% in the first quarter, the average 

value of the Canadian dollar relative to the US dollar decreased 1.6% in 

the second quarter. 

     In comparison, unit labour costs of American businesses increased 

0.2%, following a strong 1.4% gain in hourly compensation the first 

quarter. 

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

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