Labor productivity in the manufacturing sector of both Canada and the U.S. increased at the same average pace between 1961 and 2003, according to a new report from Statistics Canada. Labor productivity is a measure of real output per hour worked.

In Canada, the more intense use of intermediate inputs, such as parts and materials, was a more important source of labor productivity growth than it was in the U.S. In the U.S., investment in capital and multifactor productivity growth (or the efficiency with which capital, labor and intermediate inputs are used in production) were the key factors.

According to the report, labor productivity in the manufacturing sectors of both countries increased at an annual average rate of 3.2 percent.

In Canada, the deepening …