Although the economic recession has driven down income, gross domestic product growth and labour productivity in Canada, the country’s economy fared better than many of its international peers in 2008, reports a new Conference Board of Canada study.

In a benchmarking analysis of the economies of 17 developed countries around the world, Canada maintained its 11th place ranking and its grade of “B” — the same score as last year.

This was despite a drop in income per capita in 2008, for the first time since the 1990-91 recession, to US$31,639, and a labour productivity growth rate of -0.9%. In addition, Canada’s GDP growth rate fell to 0.5% and employment growth dropped to 1.4% from 2.3% in 2007. Also down sharply was Canada’s inward foreign direct investment, which was 58% lower in 2008.

Other countries in the study were impacted by the recession to a greater extent, including Ireland, which plummeted from the top of the ranking last year to the bottom spot in this year’s study, as its economy suffered a 2.7% contraction in 2008. In addition, Finland fell from the 6th spot to 15th as a drop off in demand for exports drove down the country’s output sharply.

“Since the Conference Board began international benchmarking in 1996, there has never been a year where the relative rankings changed so dramatically,” said Glen Hodgson, senior vice president and chief economist at the Conference Board.

At the top of the class was Norway, which advanced from third place in 2007 to first place in 2008. Norway had the highest income per capita of the 17 countries, at US$40,807, and achieved the second-highest GDP growth within the group, at 2%. Norway was also the only country to receive an “A” grade for employment growth in 2008, with growth of 3.2%.

The U.S. was eighth in the economic ranking, with a grade of “B”. The U.S. fared better than Canada in terms of GDP growth and income per capita, but lagged in employment, with a decline of 0.3%.

Hodgson cautions that although Canada’s position in the benchmarking study did not worsen in 2008, there is room for improvement.

“Canada’s 11th-place ranking means it remains near the back of the class among its peer countries,” he said. “We cannot take for granted that Canada will come through the recession better than its peers. Canada is still lagging on key indicators of sustainable economic growth.”

In particular, the Conference Board notes that labour productivity in Canada has lagged other countries for decades, hurting its international competitiveness.

One bright spot in the Canadian economy in 2008 was a boost in outward foreign direct investment, which benefits the economy by opening access to foreign markets and results in more efficient and competitive firms, according to the Conference Board. This was largely comprised of money flowing to foreign subsidiaries in the U.S., including 65% of the funds going to the finance and insurance industry as companies faced liquidity issues related to the financial crisis.

But despite the growth in this area, Canada earned a weak grade of “C” and ranked 9th of the 17 countries as it continues to lag its international peers in foreign investment, the Conference Board says.