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March 03, 2023CANADA BUSINESS SECTOR LABOUR PRODUCTIVITY, Q4 & Annual 2022 
Labour productivity of Canadian businesses declined by 0.5% from Q3 2022 to Q4 2022. Hours worked increased by 0.2% while output was down 0.3%.
The decline in productivity in Q4 reflects the contraction in business output after five quarters of consecutive growth. Hours worked continued to increase but at a much slower pace.
Labour productivity was 0.3% lower in Q4 2022 compared to pre-pandemic Q4 2019.
Total compensation per hour increased by 0.6% in Q4 2022, the fourth consecutive increase after a slight decline at the end of 2021. Growth in employee compensation combined with a decline in productivity resulted in a 1.1% growth in the unit labour costs of Canadian businesses in Q4 2022. This was the fourth consecutive quarterly increase in the unit labour costs.
When measured in US dollars, Canada's business sector unit labour cost decreased by 2.8% in Q4 2022.
Annual 2022
On an annual basis, labour productivity of Canadian businesses declined 1.5% in 2022, following record decline of 6.2% in 2021 and a record growth of 8.8% in 2020. The annual productivity decline in 2022 was driven by real business GDP growth (+3.6%) being lower than the growth in hours worked (+5.2%). Hourly compensation was up 5.2% in 2022, thus lifting unit labour costs 6.8% with the decline in labour productivity (-1.5%). Unit labour costs in US dollars were up only 2.9% as Canadian dollar was down 3.6% against the US dollar.
Statistics Canada. Table 36-10-0206-01 Indexes of business sector labour productivity, unit labour cost and related variables
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