UPDATE 1-Canada productivity grows 1.4 pct in Q4 2009

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OTTAWA, March 16 (Reuters) - Canadian labor productivity grew 1.4 percent in the fourth quarter of 2009, the first increase in more than a year and the highest quarterly growth rate for almost 12 years, Statistics Canada said on Tuesday.

Analysts had on average predicted productivity would increase by 0.8 percent. The increase was the largest since the 1.6 percent rise posted in the first quarter of 1998.

Businesses increased real output by 1.4 percent on the back of higher exports, consumer spending and residential investment.

The productivity of goods-producing industries rose by 1.7 percent after three consecutive quarters of declines. Productivity in service-producing industries was up by 1.0 percent for the fourth straight quarterly gain.

The stronger Canadian dollar meant the unit labor costs of Canadian businesses expressed in U.S. dollars increased by 3.8 percent, the third quarterly gain in a row. U.S. businesses' labor costs fell by 1.6 percent in the fourth quarter. (Reporting by David Ljunggren; Editing by James Dalgleish)