RTTNews - Canadian labor productivity unexpectedly rose in the first quarter as hour worked fell sharply, according to data released Tuesday by Statistics Canada.

The labor productivity of Canadian businesses rose 0.3% in the first quarter. The decline in unit labor costs in Canadian businesses in US dollars continued for a third consecutive quarter, as their costs decreased by 1.8% in the first quarter.

Economists expected a 0.2% drop from the previous quarter.

In the first quarter, the real gross domestic product (GDP) of Canadian businesses and hours worked related to this production were both down sharply, posting the largest quarterly declines since the first quarter of 1991.

The downward movement in hours worked accelerated in the first quarter, falling 2.2% compared with the fourth quarter of 2008 drop of 1.3%. The decline in hours worked in the business sector more than offset the decrease in output in the first quarter.

Productivity in the goods sector grew 1.7% in the first quarter, despite a further decline in manufacturing, and was partly counterbalanced by a 0.5% productivity decrease in the services sector.

Over the last two quarters, productivity has followed much the same pattern in Canada and the United States. American businesses had a 0.4% gain in productivity in the first quarter, after a 0.1% decline the previous quarter.

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