Growth in labour productivity eased everywhere but in Atlantic Canada in 2006, Statistics Canada reported today.

Nationally, labour productivity increased 1% last year, compared with an increase of 2.2% the year before.

Productivity gains exceeded the national average in the Northwest Territories and five provinces – Newfoundland and Labrador, Nova Scotia, New Brunswick, Manitoba and Alberta.

Manitoba and Alberta recorded the strongest gains in productivity for the second straight year, although both were significantly slower than in 2005.

Labour productivity is measured by economic value added – that is, real gross domestic product – for each hour worked.

Manitoba led all provinces with a 2.2% increase, mainly the result of a better harvest and a continuing boom in the construction industry.

Alberta was second with a 1.7% increase, the result of continued energy-related growth that boosted output and productivity in sectors such as construction, manufacturing and wholesale and retail trade.

Productivity fell only in the two remaining territories and in one province, Saskatchewan, the result of a downturn in key mining sectors and lower crop production.

The volume of hours worked grew 1.8% last year which, combined with the moderate gain in productivity, raised economic output by 2.8%.

A tight labour market, particularly in Western Canada, led to an increase of 4% in Canadian hourly compensation in 2006, a substantial increase for the second straight year.

Productivity increases when a province’s total value added from the production of goods and services rises faster than the volume of hours worked. In 2006, productivity growth slowed in most provinces where the growth in the number of hours worked accelerated.