This week’s interest rate reduction is a welcome development for anyone carrying variable rate debt but it is also a signal that we are going to be hearing more and more about something called productivity.
Inflation had been the big issue of the day for economists but now that we are seeing it fade, attention is shifting to productivity and how Canada is falling behind on this measure which plays a big role in our standard of living.
Dwindling productivity simply means we are earning less for our efforts. So, if we want to make more money we have two options: work more or work smarter.
The latest report on this metric shows yet another decline as Canadian productivity continues to recede. About the only sector in the country that saw an improvement in the second quarter of this year was the oil and gas industry. Hourly labor made 5-percent more in that quarter on output gains of 2.5-percent.
Those in manufacturing, real estate and retail made only modest gains but improved nonetheless while virtually every other category of goods or service industries was retracting.
