Labour productivity of Canadian businesses decreased 0.4% in the fourth quarter 2018, after a downwardly revised 0.2% rise in the previous period and against market expectations of a 0.2% gain. This decline reflected the continued growth in hours worked, while business output remained at about the same level as in the previous quarter. The real GDP of business was unchanged in Q4, following nine quarterly increases. The output growth in services-producing businesses (0.5%) was offset by a decline in the output of goods-producing businesses (-0.9%). Hours worked in the business sector rose 0.4% in the Q4, following a 0.3% increase in Q3. Hours worked increased in both goods-producing (1.1%) and services-producing businesses (0.1%). Productivity fell further in goods-producing businesses (-1.9% from -0.1%) while it increased faster in services-producing businesses (0.4% from 0.2%). In 2018, labour productivity of Canadian businesses was unchanged, following a 1.9% increase in 2017. Productivity in Canada averaged 87.64 Index Points from 1981 until 2018, reaching an all time high of 106.63 Index Points in the third quarter of 2018 and a record low of 67.27 Index Points in the third quarter of 1981.
Productivity in Canada is expected to be 106.30 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.