Prior was -0.1% (revised to -0.3%) Unit labour costs +1.4% q/q, fourth consecutive gain (+3.2% y/y) Goods led the decline (-1.7%); ag/forestry cratered -8.6%, construction -2.3% Statistics Canada says business sector labour productivity fell 0.5% in Q1, the second straight…
arterly drop after -0.3% in Q4. The Q4 number was revised down from -0.1% in today’s report
We already know that real GDP slipped 0.1% on the quarter. Hours worked rose 0.4%. So Canadian businesses put more hours in and got less out.
That’s the whole productivity miss in one sentence — you’re running harder to stand still. The piece that actually matters for the Bank of Canada is buried at the bottom: unit labour costs jumped 1.4% q/q, the fourth consecutive quarterly increase, and they’re now up 3.2% from a year ago. Productivity falling while hourly compensation rises 0.9% is the textbook recipe for ULC pressure, and it doesn’t sit comfortably next to a central bank that’s likely going to have to raise rates later this year.