How important are each of the factors that determined labour productivity growth?
Over the entire 1961 to 2000 period, labour productivity in Canada’s business sector advanced at an average annual rate of 2.2%. This growth is divided into the aforementioned components in Figure 3. Figure 3. Labour productivity and its sources of growth, 1961 to 2000 (average annual growth rate in percentage) Over the 1961 to 2000 period, capital services increased more rapidly than the number of hours worked. The resulting increase in capital intensity contributed 1.0 percentage points of the 2.2 percentage points of annual labour productivity growth. During this period, the multifactor productivity contribution was second in importance, with a 0.7 percentage point annual increase. Increases in labour quality made a positive, albeit small, contribution of 0.4 percentage points to productivity growth.
