Canadian labour rose during the third quarter, to a four-year high, after two quarters of virtually stagnant growth, Statistics Canada said today.

Productivity, as measured by the agency, increased 0.8% in the strongest performance since the last three months of 2001.

Economists had expected a 0.5% increase.

StatsCan said productivity in the July-September period increased because production rose faster than the number of hours worked.

During the first two quarters of 2005, gross domestic product growth was on par with hours worked, resulting in flat productivity growth.

Separately, the government agency said that industries operated at 86.9% of capacity during the third quarter, thanks to a rebound in exports.

The consensus forecast among economists had called for a reading of 87.5%.

The third-quarter figure was up from an 86.5% showing in the second quarter and was just shy of the record peak of 87.6% peak in the first quarter of 1988.

StatsCan said the rebound in exports was partly due to a 7% jump in automotive exports. And that helped push up total exports by 2.5%.

The statistical agency also said manufacturers benefited from a decline in raw materials prices in the third quarter.

It added that forestry and logging and mining sectors have also contributed to the advance in capacity utilization in the third quarter.

However, capacity utilization rates in the oil and gas extraction and construction sectors experienced declines, as the increase in production capacity exceeded growth in production.