After years of stagnation, labour productivity rose in the fourth quarter of 2024, according to new data from Statistics Canada.
Labour productivity grew by 0.6% in the quarter, following three quarters of little change. The increase came as output grew at double the rate of the third quarter, rising 0.8%, and hours worked rose, but at half of the pace of Q3 (up just 0.2%).
The service sector was primarily responsible for the increase in productivity, StatCan said — while productivity continued to decline in the goods sector.
The rise in productivity for the fourth quarter also translated into a productivity increase for 2024, which was up 0.6% for the year, StatCan said — noting that this came on the heels of three years of declines.
Despite the improvement, “the big picture remains one of weakness,” cautioned BMO Capital Markets in a research note.
“This persistent issue should be among the top priorities to address to support medium- and long-term economic growth,” it said — a challenge that could be exacerbated by rising trade tensions, which hamper foreign investment.
That concern was echoed by Desjardins Group, which warned on Wednesday that — while productivity was poised to rise this year, as immigration slows — the expected rebound, “could be restrained by circumstances beyond the control of Canadian policymakers.”