Both labour productivity and hours worked in Canadian businesses edged down 0.1% in the fourth quarter of 2025, according to Statistics Canada.
This follows a quarter-over-quarter labour productivity increase in Q3.
In the fourth quarter, the productivity decline in goods-producing businesses (-0.9%) was partially offset by productivity growth in services-producing businesses (0.4%).
Hours worked in goods-producing businesses grew 0.2% in the fourth quarter in all industry sectors except for manufacturing (-0.4%), offset by a 0.2% decline in hours worked in the services-producing businesses.
As labour productivity edged down, the 0.5% rise in hourly compensation resulted in a 0.7% growth in unit labour costs to businesses, representing the fastest pace of quarterly growth since the first quarter of 2024.
“While labour productivity of businesses fluctuated throughout the year, amid trade uncertainties and a weakening labour market, it was up 1.1% overall in 2025, due to strong growth in the third quarter,” reported Statistics Canada.
Growth in hours worked decelerated from 1.1% in 2024 to 0.8% in 2025, contributing to the annual increase in labour productivity.