Labour productivity of Canadian businesses rose 0.3 percent in the first quarter of 2019, rebounding from a 0.4 percent fall in the previous period and matching market expectations. The rise in productivity reflected the decline in hours worked following seven consecutive quarterly gains, while business output remained virtually unchanged. The real GDP of business output dropped 0.1 percent for the second straight quarter, as the decrease in the output of goods-producing businesses (-0.6 percent) offset the growth in service-producing businesses (+0.4 percent). Hours worked in the business sector went down 0.3 percent, after increasing 0.4 percent in Q4. It was the first decline in hours worked in two years, as hours worked fell at a similar pace in both goods-producing (-0.3 percent) and service-producing (-0.4 percent) businesses. The increase in productivity in Q1 was due to service-producing businesses (0.7 percent) while in goods-producing businesses productivity fell 0.3 percent. Productivity in Canada averaged 87.75 Index Points from 1981 until 2019, reaching an all time high of 106.56 Index Points in the second quarter of 2017 and a record low of 67.27 Index Points in the third quarter of 1981.
Productivity in Canada is expected to be 111.13 Index Points by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Productivity in Canada to stand at 111.67 in 12 months time. In the long-term, the Canada Productivity is projected to trend around 113.89 Index Points in 2020, according to our econometric models.