UPDATE 1-Canadian labor productivity posts surprise drop in Q1 2014

Fri Jun 6, 2014 8:34am EDT
 
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* Labor productivity drops by 0.1 percent

* Decline is first since third quarter of 2012

OTTAWA, June 6 (Reuters) - The labor productivity of Canadian businesses unexpectedly dropped by 0.1 percent in the first quarter of 2014, the first decline for 18 months, Statistics Canada data indicated on Friday.

Market analysts had on average expected productivity to remain unchanged from the fourth quarter of 2013. The last drop in productivity was the 0.4 percent decline seen in the third quarter of 2012.

The overall decline was caused by falling productivity in service-producing businesses, which dropped by 0.4 percent from the fourth quarter. This more than offset the 0.8 percent increase recorded by goods-producing businesses.

Real GDP of businesses grew by 0.3 percent in the first quarter, compared with an average quarterly growth of 0.8 percent for the four quarters of 2013. The largest contributor to the first quarter advance in real GDP was the mining and oil and gas extraction sector.

The number of hours worked in the business sector was up 0.4 percent after a 0.3 percent fall in the fourth quarter of 2013. (Reporting by David Ljunggren; Editing by Chizu Nomiyama)