Growth in Canada’s labour productivity slumped in 2003 to 1.2%, less than half the 2.8% seen the previous year, Statistics Canada reported today.

Ten of the 20 industries in the manufacturing sector recorded a decline in productivity, while another quarter recorded a slowdown in productivity growth.

Stung by the sharp rise in the Canadian dollar against its U.S. counterpart, Canadian manufacturers cut their output by 0.5% last year, while hours worked in the sector declined by 1.7.

“During this period, the rapid appreciation of the Canadian dollar pressured Canadian exporters of manufacturing goods to adjust their operating costs,” Statistics Canada said.

Productivity measures the efficiency with which labour is employed in the production process.

Several negative shocks that affected economic activity last year contributed to a weak 0.1% growth in the business sector’s productivity growth. This is the smallest gain of the last six years, during which productivity grew at 1.9% on average.