Labour productivity of Canadian businesses rose 0.7% in the second quarter of 2018, the highest growth since the first quarter of 2017 (+1.4%) following a 0.3% fall in the first quarter and exceeding market expectations of a 0.4% gain. The productivity rebound reflected an acceleration of growth in business output, while hours worked were essentially unchanged. The real GDP of businesses rose 0.7% in Q2, after increasing 0.3% in Q1. Productivity growth accelerated for both goods-producing (1.7%) and service-producing businesses (0.5%). Mining, quarrying, and oil and gas extraction (3.6%) contributed the most to the gain. The rise in hours worked in the business sector slowed to 0.1% in Q2, after an 0.5% increase in Q1. The growth in hours worked in service-producing businesses (+0.3%) more than offset the decline in hours worked in goods-producing (-0.5%). Productivity in Canada averaged 89.62 Index Points from 1981 until 2018, reaching an all time high of 109.99 Index Points in the second quarter of 2018 and a record low of 69.08 Index Points in the third quarter of 1981.
Productivity in Canada is expected to be 110.64 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 111.38 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.