Statistics Canada Reports 0.2% Growth in Labour Productivity for First Quarter of 2025
Labour productivity for Canadian businesses increased by 0.2% in the first quarter of 2025, according to Statistics Canada in a release on June 4. This follows a 1.2% rise in the fourth quarter of 2024 and marks the first time since the start of the COVID-19 pandemic that productivity has grown in two consecutive quarters.
Statistics Canada reports that the main driver of growth was goods-producing businesses, where productivity increased by 0.8% compared to 0.3% in the previous quarter. Four out of five goods-producing sectors posted increases. Productivity in service-producing businesses declined by 0.5% after rising 1.3% in the previous quarter.
The agency states that productivity rose in half of the 16 main industry sectors during the first quarter. The largest increases were reported in wholesale trade (up 2.6%), agriculture and forestry (up 2.0%), and utilities (up 1.5%). The real estate sector had the largest decrease, falling by 3.9%.
Statistics Canada noted that hours worked in the business sector increased by 0.4% in the first quarter, following a 0.5% decrease in the previous quarter. This change was attributed to a 0.8% increase in the number of jobs, even as hours worked per job dropped by 0.4%. Most of the growth in hours worked occurred in service-producing businesses (up 0.6%), while hours worked in goods-producing businesses remained almost unchanged.
Unit labour costs, which Statistics Canada defines as the cost of labour needed to produce one unit of output, fell by 0.3% in the first quarter of 2025. This is the first drop in five quarters and reflects a slowdown in hourly compensation growth, which went from a 1.6% increase in the fourth quarter to a small decrease of 0.1% in the first quarter, combined with the 0.2% lift in productivity.
Statistics Canada revised data back to the first quarter of 2024 to incorporate updates from other economic releases and new benchmark information published in May 2025.