Labour productivity in the business sector improved last year in Central Canada and Alberta but declined in the rest of the country, according to figures released Wednesday by Statistics Canada.

Nationally, productivity was up a mere 0.2 per cent in 2012, compared to a 1.1 per cent  increase between 2010 and 2011.

"In 2012, real gross domestic product of businesses increased in every province and territory, except Newfoundland and Labrador, Nova Scotia and New Brunswick, while hours worked increased in all provinces and territories," the agency said.

Statistics Canada measures productivity in terms of real gross domestic product per hour worked.

"Productivity gains occur when the production of goods and services grows faster than the volume of work dedicated to their production," Statistics Canada said.

Hourly compensation rose three per cent last year in Canada overall, a somewhat smaller increase than the 3.4 per cent seen in 2011.

The number of hours worked increased in all provinces and territories last year, and real GDP of businesses rose everywhere but Newfoundland and Labrador, Nova Scotia and New Brunswick.

Manitoba sees biggest gains

Manitoba saw the greatest rise in productivity, with an increase of 2.1 per cent, mainly owing to growth in the agriculture, mining and construction sectors. Real GDP in the business sector rose three per cent while the amount of hours worked increased 0.9 per cent.

Newfoundland and Labrador, by contrast, saw the biggest drop in productivity, down 6.5 per cent in 2012 largely because oil and gas production decreased that year as facilities underwent maintenance work. The number of hours worked in the province nevertheless increased, rising 3.9 per cent, "with the greatest gains occurring in construction, transportation services and warehousing as well as real estate," Statistics Canada said.

Real GDP of businesses, however, fell 2.8 per cent.

After Manitoba, Alberta saw the second-largest productivity gains, with an increase of 0.7 per cent in 2012 on the strength of service industries. This sector posted a 1.2 per cent gain in productivity while goods-producing businesses saw productivity fall 0.1 per cent.

Real GDP was up four per cent because of increased activity in oil and gas extraction, manufacturing, construction and retail and hours worked saw a comparable increase of three per cent.

B.C. falls behind as Ontario sees small uptick

Strong productivity gains in the manufacturing industry helped pushed Ontario's productivity up 0.4 per cent in 2012. In Quebec it was the service sector that pushed productivity up half a per cent while productivity in the goods-producing industries remained the same as in 2011.

B.C. lost the productivity gains it had made in 2011, when it had had a 2.8 per cent increase in productivity. In 2012, productivity fell 1.4 per cent as the increase in hours worked in the province outpaced the growth in business output.

"Growth in the real GDP of businesses in the province was especially dampened by significant declines in oil and gas extraction, paper product manufacturing, and mining and oil and gas extraction support activities," Statistics Canada said.