A Detailed Analysis of the Productivity Performance of the Canadian Forest Products Sector Since 2000
The forest products sector in Canada has faced hard times since 2000. In terms of productivity growth, the sector as a whole has performed poorly relative to the total-economy average. Labour productivity in the sector grew by 0.38 per cent per year between 2000 and 2007, below the economy-wide average of 0.98 per cent per year over the same period. This sub-par performance is entirely attributable to the paper manufacturing subsector, where labour productivity has collapsed since 2000. The other two subsectors within the forest products sector – forestry and logging and wood product manufacturing – experienced above average productivity growth over the 2000-2007 period, but much of this improvement has come from cuts in inputs (labour and capital) that have exceeded cuts in real output. This is an unsustainable source of productivity growth in the long run.
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