2025.09.0313:08:18UTC+00Canada Labour Productivity Falls the Most Since 2022

In the second quarter of 2025, Canadian business labor productivity experienced a notable decline of 1.0%, following a revised 0.1% decrease in the first quarter, which fell short of the anticipated 0.2% growth. This marks the most significant drop since the fourth quarter of 2022, which saw a decline of 1.1%. Contributing factors include the uncertainty surrounding international trade, prompting businesses to reduce their output for the first time in seven quarters, while the number of hours worked continued to rise, albeit at half the rate of the previous quarter. Significant reductions were observed in sectors such as utilities (-4.0%), wholesale trade (-2.6%), and manufacturing (-2.1%), with construction experiencing a marginal decrease of 0.1%. Additionally, hourly compensation decreased by 0.5%, marking its first downturn since early 2021, which resulted in a 0.5% increase in unit labor costs.