Canadian labour productivity picked up slightly in the fourth quarter of 2001, rising at a 1.9% annual rate from the prior quarter. But this was hardly enough to impress economists.

BMO Nesbitt Burns says that while this was a little faster than expected, “it pales in comparison with the 5.2% annualized spurt seen in the U.S. last quarter. For all of last year, Canadian productivity rose 1.2%, compared with a 1.9% U.S. advance. The good news is that the gap was not even larger, given the stark divergence in employment growth between Canada and the U.S. last year.” BMO notes that instead of cutting jobs Canadian employers have chopped the length of the average workweek in response to the economic slowdown.

Bank of Montreal’s economists say that, “This most recent increase will likely be viewed favourably at the Bank of Canada as it is right in line with the central bank’s mid-point target for inflation of 2.0%.”

“Given the steep slowdown in growth last year and surprisingly resilient employment conditions, Canada’s productivity performance was better than expected,” concludes BMO Nesbitt. “However, productivity growth still lagged behind the U.S. pace, and that is the bottom line.”