April 10, 2001 (The Editor’s Desk is updated each business day.)

The U.S.-Canada manufacturing productivity gap

The U.S. advantage over Canada in manufacturing productivity growth during the 1990s, as measured by BLS, was led by dramatic improvements in information-technology-related industries and does not appear to be significantly affected by the use of different statistical methods by the two countries.

[Chart data—TXT]

Over the 1977-98 period, productivity growth (as measured by output per hour) in U.S. manufacturing surpassed that of Canadian manufacturing—according to data from the Bureau of Labor Statistics international comparisons program, U.S. manufacturing productivity grew by 3.0 percent per year over the period, while Canadian manufacturing productivity grew by 2.0 percent per year.

Of particular interest is the way this differential or gap has grown since the early 1990s. From 1992 to 1998, for example, productivity growth in U.S. manufacturing increased at a rate more than twice that of Canadian manufacturing productivity—4.1 percent per year for the United States versus 2.0 percent per year for Canada.

Analysis by BLS economists reveals that the methods used by the two countries to construct the components of output per hour are quite similar. Where differences in methods do exist, they do not appear to be substantially affecting measured differences in productivity growth over the period of interest.

These data are a product of the BLS Foreign Labor Statistics program. Find out more in "A perspective on the U.S.-Canada manufacturing productivity gap," by Lucy P. Eldridge and Mark K. Sherwood, Monthly Labor Review, February 2001.