Productiveness now nearly 5% decrease than earlier than the pandemic
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Canada’s labour productiveness fell by 0.4 per cent within the third quarter, Statistics Canada mentioned on Wednesday, marking the third consecutive quarter of declines.
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“Productiveness has been a narrative of serial disappointment in Canada, and the third quarter supplied little indicators of reversal,” mentioned LJ Valencia, financial analyst at Desjardins Group, in a observe. “The result coincides with Canada’s lacklustre funding efficiency throughout the quarter, as company income fell.”
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Company revenue fell by 1.1 per cent throughout the quarter, in line with gross home product information launched by Statistics Canada final week. Moreover, enterprise funding declined by 11.3 per cent in the identical interval.
Labour productiveness dropped in 11 of the 16 foremost enterprise sectors tracked by the company.
Productiveness fell by 0.7 per cent within the goods-producing sector and by 0.3 per cent in companies. Manufacturing, skilled companies and wholesale commerce have been the primary contributors to the detrimental outcomes. Utilities, retail commerce, administrative companies, and finance and insurance coverage posted will increase.
Canada’s productiveness has declined in 9 of the final 10 quarters. Valencia famous productiveness was 4.5 per cent decrease than the place it was within the fourth quarter of 2019, earlier than the pandemic.
Statistics Canada additionally famous labour unit prices rose by 1.4 per cent for Canadian companies.
Shelly Kaushik, an economist with the Financial institution of Montreal, thinks the rise in labour prices is a chance for companies to take a position extra in “productivity-enhancing measures.”
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“Nonetheless, elevated labour prices are a headwind for attracting enterprise funding from exterior Canada, which is dealing with an extra drag from the extremely unsure commerce surroundings with the U.S. over the medium time period,” she mentioned, in a observe to shoppers.
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The USA continued to outpace Canada when it comes to productiveness, posting a 0.4 per cent achieve throughout the newest quarter.
“Whereas the slack regularly constructing within the labour market might be anticipated to dampen wage development going ahead, unit labour prices for a lot of Canadian companies stay too excessive to compete with U.S. companies,” mentioned Valencia. “True positive aspects will solely come from elevated innovation, quicker technological adoption, elevated competitors, and extra environment friendly expertise matching.”
• E-mail: jgowling@postmedia.com
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