Prior quarter 0.9% revised to 1.1%Labor productivity rate for Q4 -0.1% vs -0.1% estimate
Details of the report:
Canadian business labour productivity fell -0.1% in Q4, as real GDP declined -0.2% while hours worked fell -0.1%.
This follows a +1.1% productivity gain in Q3, when output rose while hours worked declined.
The Q4 drop marks the second productivity decline in the last nine quarters.
Sector breakdown
Goods-producing sector productivity fell -0.9% in Q4, after rising +1.8% in Q3.
Services sector productivity rose +0.4%, following +0.6% growth in the prior quarter.
Manufacturing and construction were the main drivers of the productivity decline.
Information and cultural industries led productivity gains within services.
Hours worked
Total hours worked in the business sector declined -0.1% in Q4, after a -0.2% drop in Q3.
The Q3 decline was the first drop in hours worked since Q2 2020 (COVID onset).
Hours worked in goods-producing industries rose +0.2%, though manufacturing fell -0.4%.
Services-sector hours worked fell -0.2%, with declines in 8 of 11 industries.
Administrative/support, waste management, and remediation services saw the largest drop (-2.4%).
Costs
Hourly compensation rose +0.5% in Q4.
Unit labour costs increased +0.7%, the fastest quarterly growth since Q1 2024.
Unit labour costs measure the labour cost required to produce one unit of output.
Full-year 2025
Labour productivity rose +1.1% in 2025, the second consecutive annual increase after three weak years.
Business GDP grew +1.9% in 2025, similar to +1.8% growth in 2024.
Growth in hours worked slowed to +0.8% in 2025, down from +1.1% in 2024, supporting productivity gains.
Hourly compensation increased +2.3% in 2025.
Unit labour costs rose +1.2% in 2025, the slowest annual increase since 2017
This article was written by Greg Michalowski at investinglive.com.