Labour Productivity
Wholesale Trade
(NAICS 41)
The following analysis reflects on recent trends in labour productivity for the
Wholesale Trade (NAICS 41) business sector from 1997 to
2002.
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Position in NAICS Hierarchy
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Canada's Wholesale Trade (NAICS 41) sector is comprised of the following subsectors :
- Farm Product Wholesaler-Distributors (NAICS 411)
- Petroleum Product Wholesaler-Distributors (NAICS 412)
- Food, Beverage and Tobacco Wholesaler-Distributors (NAICS 413)
- Personal and Household Goods Wholesaler-Distributors (NAICS 414)
- Motor Vehicle and Parts Wholesaler-Distributors (NAICS 415)
- Building Material and Supplies Wholesaler-Distributors (NAICS 416)
- Machinery, Equipment and Supplies Wholesaler-Distributors (NAICS 417)
- Miscellaneous Wholesaler-Distributors (NAICS 418)
- Wholesale Agents and Brokers (NAICS 419)
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For the first time, Statistics Canada is publishing labour productivity
data on the basis of the North American Industry Classification System
(NAICS). The annual indices on productivity correspond with values from
CANSIM Table 383-0013.
Additional data on real output and labour input were obtained from CANSIM Table
383-0015.
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Understanding Labour productivity
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Labour productivity is measured as real Gross Domestic Product (GDP) for every hour
worked in Canada's business sector. Labour productivity derived from real GDP is presented
as an index in order to avoid methodological problems associated with level
comparisons.
The business sector excludes public administration, non-profit
organizations and the Canadian System of National Accounts
(CSNA) imputation of the rental value of owner-occupied dwellings. It
is difficult to draw inferences on productivity from these sectors and they are
therefore excluded. In 1992, the business sector GDP accounted for about 71% of
the Canadian total.
Indices on labour productivity are unavailable for a number of NAICS sectors
since certain activities are excluded. Also, data for the Finance and
Insurance, Real Estate and Rental and Leasing and
Management of Companies and Enterprises sectors are combined,
as is also the case for the Textile Mills and Textile
Product Mills manufacturing subsectors.
Labour productivity measures the extent in which labour is efficiently used. An
increase in labour productivity is associated with increases to real incomes
and the standard of living for an economy.
Changes in labour productivity may result from changes in one or more of the
following factors:
- Changes in productive labour efficiency :
- size and composition of the work force
- amount and type of employee training and work incentives offered; and
- degree to which work flows are adjusted over time.
- Changes in other factors of production:
- the level of Capital Investment (e.g. more efficient
equipment)
Labour productivity may fall if an industry does not adequately invest in the
competence of its labour force, in modernizing its plants and factories, or in
improving the efficiency of its operations.
An alternative measure of labour productivity is calculated for the
Manufacturing sector and its subsectors, industry groups,
industries and national industries in the performance chapter. This measurement is
calculated as manufacturing value-added divided by the number of hours worked
by production workers. The calculation is presented as a level in current
dollars. However, 1999 is the most recent reference period, as production
hours are no longer surveyed in the Annual Survey of Manufactures.
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Labour productivity Index
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The graph below illustrates changes in labour productivity for the
Wholesale Trade sector in comparison to the Canadian
Economy between 1997 and 2002.
Labour Productivity Index
Wholesale Trade Sector
(NAICS 41)
1997-2002
Between 1997 and 2002 labour productivity in the Wholesale Trade
sector increased 4.5 % per annum on average. In
comparison, labour productivity for the Canadian Economy
increased 2.3 % per year.
Over the most recent year, labour productivity in the Wholesale Trade
sector increased 6.6 %.
Productivity growth may occur for a number of reasons. For example, labour
productivity may rise if output increases and at the same time employment
levels decrease or stay on par. This phenomenon may occur from firms becoming
more capital intensive, that is increasing their use of technology and capital
inputs, in order to become more productive.
The following graph illustrates trends in employment (labour input) and real
output for the Wholesale Trade sector over the 1997 to 2002
period.
Labour Input and Real Output Indices
Wholesale Trade Sector
(NAICS 41)
1997-2002
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