The indicator measures the average productivity level of workers in Canada. It is calculated by dividing the GDP by the number of hours worked. The availability of high-tech and higher level of education of employees are factors that usually accompany the increase in productivity. Growth in labor productivity is usually seen as a sign of a healthy economy because higher productivity allows higher output for the same population.
The rising value of this indicator can also lead to compensation for inflationary pressure that accompanies economic growth and higher costs. Economic development associated with productivity growth does not lead to inflation because central banks do not need to raise interest rates at the time of strong growth.