Labour productivity measures the amount of goods and services produced by one hour of labor; it measures how efficiently goods and services are produced. Labour productivity is driven by several factors such as: human capital, investment, innovation, business and policy environment as well as other global forces. The burden to improving productivity falls on not just governments, but on individual firms and their management.
Nova Scotia continued to have the second lowest labour productivity among the ten provinces in 2013. Labour productivity in Nova Scotia was lower than the national level in all industries. Labour productivity is calculated by dividing the real value added by the estimated number of hours worked. Therefore, provinces such as Alberta, Saskatchewan, and Newfoundland and Labrador that have high value-added as a result of being resource and/or capital intensive tend to have high levels of labour productivity and drive up the national average.
Due to resource and capital intensity differences among provinces, it is also important to look at productivity growth rates. The chart below shows that Newfoundland and Labrador had the weakest productivity growth among the provinces in the 2011-2013 period, even though it had the second-highest level of labour productivity in the country in 2013.
Though Nova Scotia had labour productivity growth in the 2011-2013 period, labour productivity declined compared to the prior five years. Nova Scotia was the only Atlantic province with labour productivity growth in the 2011-2013 period. The average annual growth in labour productivity was the sixth highest in the country at 0.4%. The provinces of Alberta, Saskatchewan, Manitoba, British Columbia and Quebec experienced faster growth than Nova Scotia.