Productivity Trends in the Construction Sector in Canada: A Case of Lagging Technical Progress

The productivity performance of the construction sector in Canada over the last quarter century has been dismal, with output per hour lower in 2000 than in 1977. In this article Andrew Sharpe from the Centre for the Study of Living Standards examines productivity trends in this sector and discusses possible factors behind this situation. He notes that two drivers of productivity growth, capital per worker and the skills level of the workforce as represented by educational attainment, have improved markedly in the construction sector in recent years. He explains the stagnation of labour productivity growth despite these favourable trends by a lack of technical progress in the construction sector and, to a lesser extent, measurement problems which underestimate productivity growth.