OTTAWA - A new report says labour productivity in the business sector increased at virtually the same pace in Canada and the United States during the past 45 years, but for entirely different reasons.
Statistics Canada says investment in capital was the most important factor in the growth of labour productivity in Canada; in the United States, however, the main factor was improvement in production efficiency.
From 1961 to 2006, labour productivity among businesses -- one of the key indicators of an economy's health -- increased at an annual average rate of 2.1 per cent in Canada and 2.3 in the United States.
The study assessed three main components of this growth: gains that originate from changes in capital intensity (or the amount of capital per hour worked); gains from changes in labour composition (involving more highly educated or more experienced workers); and growth in multifactor productivity (everything that cannot be accounted for by labour and capital).
The study found increases in capital intensity were the most important factor in Canada's labour productivity growth over 45 years, accounting for about 60 per cent of productivity growth.
In contrast, improvement in production efficiency, as measured by multifactor productivity, was the most important factor in the United States, accounting for about 53 per cent of labour productivity growth.
