--- canonical_url: "https://csls.ca/ipm-archive/ipm-issue-14/can-measurement-error-explain-the-weakness-of-productivity-growth-in-the-canadian-construction-industry/" title: "Can Measurement Error Explain the Weakness of Productivity Growth in the Canadian Construction Industry?" author: name: "CSLS" url: "https://csls.ca/author/cslc/" date_published: "2026-07-13T06:53:57+00:00" date_modified: "2026-07-13T06:53:57+00:00" post_type: "ipm" summary: "" ipm_issue_period: - "Spring 2007" ipm_keyword: - "Canada" - "construction sector" - "deflation" - "input cost index" - "labour productivity" - "measurement error" - "output price index" - "productivity" ipm_research_theme: - "Sectoral and firm-level dynamics" ipm_country_focus: - "Canada" featured_image: "https://csls.ca/wp-content/uploads/2026/06/IPM_50_banner.webp" status: "publish" --- # Can Measurement Error Explain the Weakness of Productivity Growth in the Canadian Construction Industry? Canonical URL: https://csls.ca/ipm-archive/ipm-issue-14/can-measurement-error-explain-the-weakness-of-productivity-growth-in-the-canadian-construction-industry/ # Can Measurement Error Explain the Weakness of Productivity Growth in the Canadian Construction Industry? [Download full PDF article](https://csls.ca/wp-content/uploads/2026/07/IPM-Issue-14-4-Harrison.pdf) Cite this article × Cite this article as: Harrison, Peter. 2007. “Can Measurement Error Explain the Weakness of Productivity Growth in the Canadian Construction Industry?” International Productivity Monitor, No. 14 (Spring 2007): 53–70. https://www.csls.ca/ipm-archive/ipm-issue-14/can-measurement-error-explain-the-weakness-of-productivity-growth-in-the-canadian-construction-industry/ ## Author: - Peter Harrison Centre for the Study of Living Standards (CSLS) ## IPM Issue 14 Spring 2007 pp. 53–70 ## Related IPM articles [The Relationship between Efficiencies Defenses for Mergers and TFP Growth Robin Shaban Fall 2025 | IPM Issue 49 | pp. 82–102](https://csls.ca/ipm-archive/ipm-issue-49/the-relationship-between-efficiencies-defenses-for-mergers-and-tfp-growth/) [Labour Productivity as a Measure of Technological Change Ulrich Kohli Fall 2025 | IPM Issue 49 | pp. 64–81](https://csls.ca/ipm-archive/ipm-issue-49/labour-productivity-as-a-measure-of-technological-change/) [Adult Skills and Productivity: New Evidence from PIAAC 2023 Dan Andrews, Balázs Égert, Christine de La Maisonneuve Fall 2025 | IPM Issue 49 | pp. 41–63](https://csls.ca/ipm-archive/ipm-issue-49/adult-skills-and-productivity-new-evidence-from-piaac-2023/) [Appendix: Variable Definitions and Country/Sector Coverage for Regulatory Reform Analysis Gilbert Cette, Jimmy Lopez, Giuseppe Nicoletti, Océane Vernerey Fall 2025 | IPM Issue 49 | pp. 1–18](https://csls.ca/ipm-archive/ipm-issue-49/appendix-variable-definitions-and-country-sector-coverage-for-regulatory-reform-analysis/) [The Potential Impact of Pro-competitive Regulatory Reforms on Productivity and Growth in Canada Gilbert Cette, Jimmy Lopez, Giuseppe Nicoletti, Océane Vernerey Fall 2025 | IPM Issue 49 | pp. 3–40](https://csls.ca/ipm-archive/ipm-issue-49/the-potential-impact-of-pro-competitive-regulatory-reforms-on-productivity-and-growth-in-canada/) [IPM Issue 49 Editors’ Overview Andrew Sharpe, Bart van Ark, Paul Schreyer Fall 2025 | IPM Issue 49 | pp. 1–2](https://csls.ca/ipm-archive/ipm-issue-49/) [Appendix: UK Productivity Growth Rates Across Data Vintages and Studies Josh Martin Spring 2025 | IPM Issue 48 | pp. 65–73](https://csls.ca/ipm-archive/ipm-issue-48/appendix-uk-productivity-growth-rates-across-data-vintages-and-studies/) [Opportunities and Risks of Artificial Intelligence for Productivity Francesco Filippucci, Peter Gal, Katharina Laengle, Matthias Schief, Filiz Unsal Spring 2025 | IPM Issue 48 | pp. 1–26](https://csls.ca/ipm-archive/ipm-issue-48/opportunities-and-risks-of-artificial-intelligence-for-productivity/) [Eroding Natural Capital: An Alternative Explanation for the Secular Decline in Productivity Growth Christina Caron Fall 2024 | IPM Issue 47 | pp. 109–147](https://csls.ca/ipm-archive/ipm-issue-47/eroding-natural-capital-an-alternative-explanation-for-the-secular-decline-in-productivity-growth/) [Using Ecosystem Accounting to Integrate the Environment in Measures of Multifactor Productivity Carl Obst Fall 2024 | IPM Issue 47 | pp. 87–108](https://csls.ca/ipm-archive/ipm-issue-47/using-ecosystem-accounting-to-integrate-the-environment-in-measures-of-multifactor-productivity/) ## Abstract ## Résumé EN FR Copy link Email LinkedIn According to Statistics Canada productivity estimates, the rate of growth of real output per hour in the construction industry in Canada over the 1981-2006 period was 0.53 per cent per year, one-third of the business sector average. This article examines evidence for and against the hypothesis that measurement error explains this below average productivity performance. The article finds that the use of input cost indexes to adjust nominal output to obtain real output, instead of the more appropriate use of output price indexes, for certain sub-industries of the construction sector represents the most likely source of measurement error. This procedure may result in a downward bias to labour productivity growth in the construction sector of up to 0.44 percentage points per year. It is thus likely that measurement error explains some, but not all, of the gap in labour productivity growth between the construction industry and the business sector. ACCORDING TO STATISTICS C ANADA produc- Selon les estimations de productivité de Statistique Canada, le taux de croissance de la production réelle par heure dans le secteur de la construction au Canada sur la période 1981-2006 était de 0,53 % par année, soit le tiers de la moyenne du secteur des entreprises. Cet article examine les données probantes pour et contre l’hypothèse selon laquelle une erreur de mesure explique cette performance de productivité inférieure à la moyenne. L’article constate que l’utilisation d’indices de coûts des intrants pour ajuster la production nominale afin d’obtenir la production réelle, au lieu de l’utilisation plus appropriée des indices de prix de la production, pour certaines sous-industries du secteur de la construction représente la source d’erreur de mesure la plus probable. Cette procédure peut se traduire par un biais à la baisse de la croissance de la productivité du travail dans le secteur de la construction pouvant atteindre 0,44 point de pourcentage par année. Il est donc probable que l’erreur de mesure explique une partie, mais pas la totalité, de l’écart de croissance de la productivité du travail entre l’industrie de la construction et le secteur des entreprises. [Download full PDF](https://csls.ca/wp-content/uploads/2026/07/IPM-Issue-14-4-Harrison.pdf)