Canada Productivity

Canadian business labor productivity rose 0.9% quarter-on-quarter in Q3 2025, rebounding from a 1.0% decline in Q2 and beating expectations of 0.4% growth. The increase marked the sixth gain in eight quarters. Real business GDP also rebounded 0.9%, reversing a 0.8% contraction in the previous quarter. Productivity advanced in nine of 16 major industry sectors, led by goods-producing businesses (+1.6%) and modest gains in services (+0.2%). Manufacturing, mining and oil and gas, agriculture, and real estate were the main contributors, while utilities declined for a second consecutive quarter. Overall hours worked in the business sector fell 0.1%, with a 0.6% drop in goods-producing industries more than offsetting a 0.2% rise in services. Wildfires in July and August had a minimal impact, reducing hours by 0.01 percentage point. Unit labour costs rose 0.3%, slowing from 0.8% in Q2, as hourly compensation increased 1.2%.