Labour Productivity Measures - National (Quarterly)

Status:
Active
Frequency:
Quarterly
Record number:
5042

The quarterly program of the Canadian Productivity Accounts (CPA) produces, on a timely basis, data on labour productivity and related variables such as output, employment, hours worked, labour compensation and unit labour cost.

Detailed information for first quarter 2014

Data release - June 6, 2014

Description

The quarterly program of the Canadian Productivity Accounts (CPA) produces, on a timely basis, data on labour productivity and related variables such as employment, hours worked, output, labour compensation and unit labour cost.

Quarterly labour productivity series, measured as real gross domestic product (GDP) per hour worked, are widely watched by the financial community, non financial businesses, government policymakers and researchers. These series are of interest for three prime reasons: a) They provide more current information than do the annual productivity data; b) They provide necessary information to analyze the behaviour of the economy during business cycles and c) They provide the most current information of the productivity performance of Canada compared to the U.S.

Even though multifactor productivity data provide a more comprehensive indicator of productivity performance, the quarterly program of the CPA produces only data on labour productivity and its related variables. This is due to the complexity associated with the construction of multifactor productivity measures and their high level of data requirements (see record number 1402).

The quarterly program of the CPA has three main features:

1) Estimates are limited to measures of labour productivity and related variables;

2) Estimates apply to the entire economy, its aggregate business sector and its constituent two-digit sub-sectors based on the North American Industry Classification System (NAICS).

3) Quarterly estimates are available only in the form of indexes or growth rates, as opposed to values or levels.

Statistical activity

The Canadian System of National Accounts (CSNA) provides a conceptually integrated framework of statistics for studying the state and behaviour of the Canadian economy. The accounts are centered on the measurement of activities associated with production of goods and services, the sales of goods and services in final markets, the supporting financial transactions, and the resulting wealth positions.

To produce financial statistics, the CSNA measures the economic dimensions of the public sector of Canada, including the financial inter-relationships among the thousands of entities that make up the three levels of government in Canada (federal, provincial and territorial, and local). In order to carry out this program, the CSNA maintains a universe of all public sector entities including their complex inter-relationships.

The Canadian Productivity Accounts (CPA) are responsible for producing, analyzing and disseminating Statistics Canada's official data on productivity and for the production and integration of data on employment, hours worked and capital services consistent with the System of National Economic Accounts. To this end, the CPA comprises three programs. The quarterly program provides current estimates on labour productivity and labour costs at the aggregate level for 15 industry groups (see record number 5042). The annual multifactor productivity program provides yearly estimates on multifactor productivity and related measures (output, capital input, labour input and intermediate inputs) as they apply to the major sectors of the economy and to the industry level at the national and provincial levels (see record number 1402). Lastly, the annual provincial program, as an integral part of the provincial economic accounts, provides estimates on employment, hours worked, labour productivity and labour costs at the industry level for each province and territory (see record number 5103).

Reference period:
Quarter

Subjects

  • Economic accounts
  • Productivity accounts

Data sources and methodology

Target population

The conceptual universe consists of the business sector.

Data sources

Data are extracted from administrative files and derived from other Statistics Canada surveys and/or other sources.

The CPA is responsible for constructing labour data (employment and hours worked) that accord with the CSNA production framework, using a variety of data sources available at Statistics Canada. Other sources on labour data, available within Statistics Canada, do not completely satisfy this requirement. For more details see Producing Hours Worked for the SNA in order to Measure Productivity: the Canadian Experience, The Canadian Productivity Review, catalogue no. 15-306-XIE - No 004, free, 2006.

The Labour Force Survey (LFS), the Survey of Employment, Payroll and Hours (SEPH) and the Labour Statistics program of the Public Sector Statistics Division constitute the primary sources exploited to construct data on hours worked and jobs that accord with the CSNA framework.

The monthly compensation of employees program of the Income and Expenditure Accounts Division provides the benchmarks for the compensation of employees data for the whole economy, the business sector and a reasonably detailed industry breakdown which is, in turn, used to construct two-digit industries data.

The final demand measure of gross domestic product (GDP), available from the Income and Expenditure Accounts Division, is used to estimate the output of the whole economy and its aggregate business-sector. Real value added data, produced by the Industry Accounts Division, are used to measure the output of industries and major sub-sectors.

Imputation

Under the CSNA conventions, it is not possible to split income of self-employed workers between labour and capital. Compensation of self-employed workers is, therefore, imputed using mainly the assumption that the average hourly wage of a self-employed worker is at least equal to that of an employee in the same industry.

Estimation

Labour productivity, hourly compensation and unit labour cost are expressed as indexes derived from three variables: chain-weighted output, hours worked and labour compensation for all workers. The estimation method employed to achieve these ratios varies according to the level of aggregation (whole economy or industry).

Quarterly output for the whole economy is a final demand Fisher chain-weighted GDP at market prices. It is conceptually similar to the one used for the aggregate business sector, albeit with differences in terms of coverage. The business sector GDP excludes the gross value added of non-commercial activities, private households and the rental value of owner-occupied dwellings.

Quarterly output by industry is the Fisher chain-weighted value added at basic prices following the North American Industry Classification Systems (NAICS).

For more information see additional documentation.

Quality evaluation

The approach used is based on expert judgment. Three criteria are used to evaluate the quality of the estimates:

A. the quality of the data sources including deflators;
B. the nature of breaks (if any) in the series; and
C. the importance of revisions.

The combination of these criteria should be considered as a necessary condition for quality; however, no criterion on its own can be a sufficient condition for quality. Based on these criteria, variables are assigned a quality rating using a three-point scale: 1 - reliable, 2 - fairly reliable, and 3 - unreliable.

A) Quality of data sources and deflators

A variable cannot receive rating 1(reliable) if:

i) the series in current prices are unreliable (no surveys or administrative sources) because they are based on imputed data; and/or;

ii) the variable has no appropriate deflator for constructing a reliable series in constant prices.

If the series look "reasonable" despite weaknesses i) and ii) above, it would be given a 2 (fairly reliable) rating. Otherwise, it would be considered unreliable (3) by default.

B) Breaks in the series

Breaks occur when macroeconomic or industry-specific shocks have a temporary or permanent impact; changes associated with the environment within which the industry operates (regulation, etc.); and changes associated with the statistical infrastructure (classification; sources, concepts and methods).

If breaks that affect the series are explicable--in other words, if they are covered by one of the above examples--then the series could receive rating 1 (provided the other quality criteria are satisfied).

If the breaks cannot be explained, the series cannot obtain rating 1.

C) The Importance of Revisions

The order of magnitude of the revisions to the quarterly labour productivity series over the three cycle of revisions to the CSNA data are another way to ascertain the quality of the data. For more details, see Revisions to Canada and United States Annual Estimates of Labour Productivity in the Business Sector, Statistics Canada, catalogue, no 15-212-X, ISSN 1920-8480, March 2012.

Disclosure control

Statistics Canada is prohibited by law from releasing any data which would divulge information obtained under the Statistics Act that relates to any identifiable person, business or organization without the prior knowledge or the consent in writing of that person, business or organization. Various confidentiality rules are applied to all data that are released or published to prevent the publication or disclosure of any information deemed confidential. If necessary, data are suppressed to prevent direct or residual disclosure of identifiable data.

The CPA use the confidentiality model developed by the Industry Account Division. This model uses a method consisting in suppressing sensitive cells.

Data are also suppressed if they have been assigned an unacceptable quality rating.

Revisions and seasonal adjustment

Quarterly labour productivity estimates and related measures are released four times per year.

Short-term changes are more variable than long-term ones. Furthermore, since they are based on preliminary output and employment data, they may be subject to revision. To ensure consistency with annual data from the annual productivity accounts, the quarterly indexes of value added and hours worked are adjusted to their respective annual benchmarks when these are available.

The figures for the year's previous quarters are revised when data for the current quarter are published. When first-quarter data are released, the data for the three previous years are revised in conjunction with the National Accounts revision process.

Data accuracy

Data for the aggregate business sector and sub-sectors at the national level are deemed to be reliable based on the quality evaluation principles laid out above in the "Quality evaluation" section. For more information see the publication The Statistics Canada Productivity Program: Methodology 2000, which is part of the Canadian Productivity Accounts: Methods and Concepts series (Catalogue no. 15-002-MIE2001001). At the moment, there are no data reliability ratings for the labour productivity measures at the provincial level.

Documentation