Industry Structure Change and the Post-2000 Economic Growth Slowdown: A Canada-U.S. Comparison

The views and opinions expressed in the research paper are those of the authors alone and do not represent, in any way, the views or opinions of the Department of Industry or of the Government of Canada.

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Industry Canada

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Industry Canada

Abstract

This paper examines the contribution of individual industries to real GDP and labour productivity growth in the business sector in Canada and the U.S. in the 1987–2000 and 2000–2008 periods.  It also highlights the differences that have emerged between the Canadian and U.S. business sectors through a new decomposition technique using chained dollars instead of constant dollars to determine real economic output. The decomposition shows that compared to the U.S., there was an important decline in the contribution of the Canadian manufacturing sector to real GDP and aggregate labour productivity growth in the post-2000 period. The U.S. manufacturing sector also contributed negatively, as the economic significance shifted to other industries in the post-2000 period, but this change was more sudden in Canada than in the United States. Relatively strong contributions from mining, construction and services in Canada offset some of the widening with Canadian and U.S. real GDP and labour productivity growth rate gaps.

 

Table of Contents

  1. Introduction
  2. An Overview of Industry Structure Change in Canada and the United States
  3. Industry Contribution to Real GDP Growth
  4. Industry Contribution to Aggregate Labour Productivity Growth
  5. Concluding Remarks
 
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