December 5, 2024

What should be no surprise given the previous stats about investment, productivity in Canada is down.

If firms are investing less, making workers come back to the office (for no reason), and think that the economy is not going to grow then productivity is going to go down. That is, fewer things are going to be made with the same number of workers, driving up per-unit costs.

It could be that this is contributing to higher prices for domestic products.

The issue is that the central banks see this as "inflation" and will not reduce interest rates. The result is a one-two punch to the economy that is struggling.

Areas where productivity increases are being realized are in areas affected by AI and external factors (retail trade).

It looks like a recession for workers in Canada. Slowing wage growth, continued price pressures, looser labour markets, and reduced investment in activity by capital.