Canadian business labor productivity declined 0.1% quarter-on-quarter in Q4 2025, following a 1.1% increase in the prior quarter and matching forecasts. This marked the second quarterly decline in the last nine quarters. Hours worked in the business sector edged down 0.1% in the fourth quarter, after falling 0.2% in the third quarter, a slower pace than the 0.2% contraction in real gross domestic product. Goods-producing businesses drove the overall productivity decline, with manufacturing and construction being the main contributors. As labor productivity edged down, the 0.5% rise in hourly compensation led to a 0.7% increase in unit labor costs for businesses. For the full year of 2025, labor productivity was up 1.1%, supported by strong growth in the third quarter.