N.L. tops U.S. in business sector labour productivity growth: Conference Board of Canada

Deana Stokes Sullivan
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Conference Board of Canada statistics

Newfoundland and Labrador was the only Canadian province to post stronger business sector labour productivity growth than the United States between 1998 and 2011, according to the Conference Board of Canada.

The board said in a news release today, "While Newfoundland and Labrador does have programs to promote productivity, the primary reason behind its productivity miracle was a structural shift in its economy where an oil boom increased the contribution of the highly productive mineral fuels industry from an estimated 1.5 per cent of real GDP in 1997 to 19.4 per cent in 2011."

These conclusions are based on research and a commentary by Alicia Macdonald, a senior economist with the board.

The conference board says it’s no wonder that productivity growth for Canada as a whole has been so low when its three biggest provinces are "productivity growth laggards." Quebec and Ontario, for instance, posted gains of 1.1 and 1.2 per cent respectively and in Alberta, the headline number is even worse, with growth of just 0.5 per cent.

The board says, however, Newfoundland and Labrador's success cannot be benchmarked by the other provinces and it cautions that looking only at the headline productivity growth rates does not tell the whole story. "For example," it says, "Alberta has the weakest growth among the provinces, but it also has the highest level of labour productivity in the country."

Over the 1998 to 2011 time period, the U.S. posted average annual compound growth in labour productivity of 2.5 per cent while Canada posted average growth of 1.3 per cent.

The board says over the next two decades, Canada and its regions will have to contend with the challenges of more and more aging baby-boomers leaving the workforce, which will result in slower economic growth, while simultaneously adding to demand and expenditures for health care.

"One part of the solution to slower growth would be to lift our productivity—a sure fire way to boost income per capita and help us pay for those public services we want and need," the board says. "While we’re hopeful for the future, our past performance on the productivity front has not been strong. Numerous past studies have highlighted our poor labour productivity performance relative to the United States but few have looked at the issue from a regional perspective."

The conference board says it's vital for  all provinces to develop an agenda to boost productivity growth.

Macdonald's full commentary can be read on the conference board's website at http://bit.ly/15QwAGr.

 

 

Organizations: Conference Board of Canada.The

Geographic location: Newfoundland and Labrador, Canada, United States Alberta Quebec Ontario

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