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Source: MIL-OSI Submissions

Labour productivity grows 0.5 percent – Media release

13 February 2020

New Zealand’s labour productivity rose 0.5 percent in the year ended March 2019, Stats NZ said today.

Labour productivity measures the quantity of goods and services (output) produced per hour of labour.

“The latest figures showed workers produced 137 goods or services for each hour worked in 2019, compared with 100 an hour in 1996,” national accounts senior manager Ruvani Ratnayake said.

Market producers – a wide range of industries known as the ‘measured sector’ – increased the amount of labour they used by 3.0 percent (labour input) and increased their output by 3.5 percent in the March 2019 year.

Primary industries experienced the strongest labour productivity growth, rising 12 percent after falls in each of the previous two years. Primary industries include agriculture, forestry, fishing, and mining. Labour productivity in the primary industries has generally improved since 1996, as improvements in technology and management have allowed farms to produce more with less labour.

Labour productivity in the goods-producing and service industries declined 0.5 percent and 0.4 percent, respectively.

Labour productivity is one of three major productivity measures produced – the other two are capital productivity and multifactor productivity.

Capital productivity saw a softer rise than labour productivity, growing 0.1 percent in the March 2019 year.

Multifactor productivity, which captures the effects of harder-to-measure changes such as technological progress, efficiency gains, and economies of scale, grew 0.3 percent.

In theory, productivity measures should cover all industries in the economy. The industry coverage of these statistics includes only the ‘measured sector’ (that is, mainly market industries rather than, for example, non-market industries like education or healthcare). However, this still covers about 80 percent of industry’s contribution to New Zealand’s gross domestic product.