September 6, 2013 / 12:39 PM / 5 years ago

Canada productivity bounces back in second quarter

OTTAWA (Reuters) - The labor productivity of Canadian businesses rose by a stronger-than-expected 0.5 percent in the second quarter, the biggest gain in six quarters, Statistics Canada said on Friday.

Productivity, which measures real gross domestic product per hour worked, beat market expectations of a 0.3 percent climb.

Canadian businesses have generally been less productive than their U.S. counterparts in recent years, but their second-quarter performance surpassed U.S. productivity growth of 0.2 percent in the same period.

In Canada, the indicator had shown tepid gains of 0.1 percent in the previous two quarters and declined steadily in most of 2012.

Real GDP of businesses expanded 0.5 percent in the second quarter, down from 0.6 percent in the first quarter, but there was no change in the number of hours worked, Statscan said.

The biggest gains were in arts and entertainment, utilities, finance and insurance and agriculture, Statscan said, while productivity slipped in mining and oil and gas extraction, transportation and warehousing and real estate services.

Canada’s sagging productivity has been a sore point for the government and economists for years and theories on the cause for the poor performance abound, with some experts even questioning whether Canada measures the indicator properly.

Reporting by Louise Egan and Alex Paterson; Editing by Chizu Nomiyama

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