Plumber electrician portrait stock photo
iStock/Pollyana Ventura

For the first time in two years, labour productivity climbed in the second quarter, according to new data from Statistics Canada.

After seven straight quarterly declines, labour productivity rose by 0.2%, as output growth outpaced the increase in hours worked for the first time since the early days of the pandemic.

Productivity rose in both the goods and services sectors, StatsCan reported.

Despite the improvement in Q2, productivity remains 1.3% below its pre-pandemic level, the agency noted.

However, output surpassed its pre-pandemic mark for the first time in the second quarter, as gross domestic product growth came in at 0.9%, which was in line with first quarter growth.

“With the lifting of public health measures in almost all regions of the country during the second quarter, businesses were able to carry out their economic activities without any pandemic-related restrictions, such as public capacity limits and mask requirements,” StatsCan said. “As a result, business output in the second quarter continued to grow at a steady pace.”

At the same time, hours worked rose by 0.7%, trailing the increase in GDP, and slower than in the previous quarter.

“Despite this slowdown, hours worked are now 1.7% above their level from the fourth quarter of 2019,” StatsCan said, adding, “This is the first time that business output and hours worked have both surpassed their pre-pandemic levels.”

Additionally, the agency reported that unit labour costs rose by 2.0% in the second quarter, down from 2.8% in the first quarter.

“This slower pace of growth in unit labour costs reflects the increase in productivity, while average compensation per hour worked rose 2.2%, a similar gain as in the first quarter (2.1%),” it noted.