The labour productivity of Canadian businesses slipped 0.2 per cent in the third quarter.

The figure is the lowest in more than a year, as Canadian productivity has fluctuated between being slightly positive and a decline of 0.1 per cent since the second quarter of 2008, Statistics Canada said Tuesday.

Productivity is the term used to describe how effectively various inputs such as labour, capital and technology are used to create economic activity. Labour productivity is a measure of real GDP per hour worked. It is a key driver of increases in the standard of living.

For the last five quarters, GDP output and the number of hours worked declined in tandem. As a result, there was a negligible change in the productivity rate.

But the real GDP of businesses edged down 0.1 per cent in the third quarter, even as hours worked were up 0.2 per cent, which explains the productivity dip.

It was the first time since the first quarter of 2008 that the number of hours worked increased. Employment and hours worked per job both grew by 0.1 per cent.

The overall productivity decline came in large part from the goods-producing business sector, which fell 0.9 per cent in the third quarter following a 0.8 per cent drop in the second quarter.

Overall productivity in manufacturing recorded a second consecutive quarterly gain. Meanwhile, productivity in services-producing businesses climbed by 0.2 per cent, a much slower pace than in the previous quarter.

The value of the Canadian dollar in relation to its American counterpart rose 6.3 per cent in the third quarter, roughly the same appreciation as in the 6.7 per cent increase in the second quarter.