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A perspective on the U.S.-Canada manufacturing productivity gap
February, 2001, Vol. 124, No. 2
Lucy P. Eldridge and Mark K. Sherwood
Over the 1977–98 period, productivity growth 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.
The gap in productivity performance between the U.S. and Canadian manufacturing sectors is illustrated in Chart 1. The two lines represent each country’s output per hour relative to its own performance in 1977. This is the first year for which the comparative data are available for the United States. Policymakers, among others, seek explanations for this gap, and much has been written about it. Concern about the gap led the Centre for the Study of Living Standards to hold a conference in Ottawa in January 2000. This article is an update and revision of a paper presented by the authors at that conference. 1
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1 "Investigating the Canada-US Productivity Gap: BLS Methods and Data," presented at the Centre for the study of Living Standards Conference on the Canada-US Manufacturing Productivity Gap, Ottawa, January 21-22, 2000. Conference papers can be obtained on the Internet at http://www.csls.ca, under the heading "recent events." More current data are included in the present article, as well as substantive revisions in the two countries’ series that have taken place since January 2000.
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