FX.co ★ Canada Labor Productivity Falls Unexpectedly

Canadian business labour productivity fell 0.5% in the first quarter of 2026, following a 0.3% decline in the previous quarter and defying expectations for a 0.7% increase. The drop reflected a slight contraction in business output combined with a 0.4% rise in hours worked. Goods-producing industries led the downturn, with productivity sliding 1.7%, while services-producing industries posted a modest 0.3% gain. Overall, productivity declined in 10 of the 16 major industry sectors. Construction and agriculture, forestry, fishing and hunting were the main drags, whereas retail trade and transportation and warehousing recorded the strongest productivity gains. With labour productivity falling and hourly compensation rising 0.9%, unit labour costs increased 1.4% over the quarter.