Economic Analysis
Unless otherwise stated all references to Gross Domestic Product (GDP) or Productivity is based on year to quarter data. For reasons of continuity and comparisons with previous plots, the limits on the present graph has remained the same as before even though the economic decline exceeds those limits. The data source is Statistics Canada
Economy and Productivity
The GDP for the average fully developed western nation grows 2 to 3% a year (excluding Covid years). Growth in the Canadian economy has been between 0 to 1% over the past few years. It was 0.46 for the fourth quarter of 2024 (year to quarter). Productivity growth has been was 0.8 % for the same period. This is the first time productivity growth has been positive in four years.
My belief is still that Canada still has a productivity problem and must attack this problem first. Increasing productivity is not increasing the economy. However, increasing productivity can lead to an expanded economy.
Several english speaking countries are strugling with low productivity. Great Britain may have discovered, at least, a partial source. Studies have shown that low productivity is not uniform thoughout the country. For example, productivity is quite high for the area surrounding London, but low for other parts. The same may be true for Canada. Productivity may be high for example, for Toronto, but low for Winnepeg.
My suggestion is the same as it was last quarter. The proper authorities, should consider looking at productivity by province/industry. One also needs to consider the reason for low productivity may be quite subtle and only tangibly related to the actual work such as transportation, housing, or available workers.
Raymond D. Matkowsky
|
