06:51 AM EDT, 06/06/2025 (MT Newswires) -- Canada's labor productivity has been in the spotlight for a

number of years given its underperformance, especially

relative to the United States pace -- and more so amid the uncertain trade environment to start the year, said Bank of Montreal (BMO).

The good news is that productivity growth has finally turned positive on a year-over-year basis with the growth rate nearing 1% in Q1 -- almost matching the United States rate, noted the bank.

The economy expanded at a solid pace, while growth in aggregate hours worked was constrained by job market

slack and weaker labor supply. Output rising faster than

working hours equals more productive workers, stated BMO.

The bad news is that productivity could take a hit in the

coming quarters, as economic growth is expected to slow

meaningfully due to trade uncertainty, added the bank. Hours worked will also be pressured, helping absorb some of the impact on productivity, but BMO wouldn't classify that as 'good' news for the economy.