The labor productivity of Canadian businesses dipped in the first quarter as business output decelerated even as hours worked picked up, Statistics Canada reported on Tuesday.
Labor productivity fell 0.3 percent in the quarter after rising by an unrevised 0.2 percent in the fourth quarter.
Growth of business activity cooled to 0.2 percent from the previous quarter’s 0.4 percent gain, dampened by a slowdown in output among companies in the service sector, particularly in real estate and retail.
The number of hours worked rose 0.5 percent, lifted by gains in both the goods and services industries, with administrative services and construction companies seeing the biggest increases. The real estate sector was an exception, experiencing a drop amid a slowdown in the Canadian housing market.
Labor costs rose 0.7 percent, slowing after two consecutive quarters of strong growth as wages cooled. Hourly wages rose 0.5 percent in the service sector, while wages at goods-producing companies were flat.