FX.co ★ Canada Labour Productivity Growth Slows

In the first quarter of 2025, Canadian businesses experienced a modest 0.2% rise in labor productivity, following an upwardly adjusted increase of 1.2% in the final quarter of 2024. This marks the second consecutive quarterly increase, a trend not seen since the COVID-19 pandemic. The improvement was primarily fueled by goods-producing industries, which saw productivity climb by 0.8%, compared to a 0.3% rise in the previous quarter. Conversely, the service-producing sectors experienced a 0.5% decline in productivity, following a 1.3% rebound in the fourth quarter of 2024. Of the 16 major sectors, productivity gains were evident in half, with wholesale trade leading the way at 2.6%, followed by agriculture and forestry at 2.0%, and utilities at 1.5%. However, the real estate sector suffered the steepest decline with a 3.9% drop. Overall, total hours worked increased by 0.4%, recovering from a 0.5% decrease primarily due to the services sector. Additionally, unit labor costs decreased by 0.3%, marking the first decline after four consecutive quarters of increases.