Stats NZ

More New Zealanders working, and working smarter

New Zealand’s labour productivity rose 0.9 percent in the year ended March 2017, Stats NZ said today. Growth in the workforce saw labour inputs for the measured sector increase 2.9 percent, while the economy expanded 3.8 percent.

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

“The latest figures show that New Zealand workers could produce 133 goods or services each hour in 2017, compared with 100 an hour 20 years ago,” national accounts senior manager Gary Dunnet said.

Labour productivity is one of the three major productivity measures produced; the other two are multifactor productivity and capital productivity. Both multifactor and capital productivity also rose in the year ended March 2017. Multifactor productivity rose 1.0 percent for the year, reflecting the effects of unobserved inputs such as technological progress, efficiency gains, and economies of scale.

Created with Highcharts 5.0.14Year ended MarchIndexBase: 1996(=1000)Measured sector productivity indexes, year ended March 1996–2017Labour productivityMultifactor productivityCapital productivity1996199719981999200020012002200320042005200620072008200920102011201220132014201520162017100012001400800Stats NZ

Measured sector productivity indexes, year ended March 1996–2017

Created with Highcharts 5.0.14IndexMeasured sector productivity indexes, year ended March 1996–2017Labour productivityMultifactor productivityCapital productivity199619971998199920002001200220032004200520062007200820092010201120122013201420152016201790010001100120013001400Stats NZ
Year ended MarchLabour productivity Multifactor productivityCapital productivity
19961,0001,0001,000
19971,0191,0131,005
19981,0401,0241,001
19991,0541,025985
20001,1091,0711,020
20011,1241,0781,019
20021,1381,0871,021
20031,1561,1041,037
20041,1731,1111,033
20051,1911,1191,030
20061,2101,1221,017
20071,2141,1171,001
20081,2291,118987
20091,2151,085934
20101,2601,100920
20111,2651,109932
20121,2881,126942
20131,3021,135946
20141,3101,140950
20151,3261,153959
20161,3471,171972
20171,3601,182983

In the long run, productivity is regarded as key to increasing New Zealand’s standard of living – as workers share the fruits of their labour. By producing more for each hour worked, their incomes may rise and the country becomes wealthier.

Growth in labour productivity in goods-producing industries was up 1.6 percent in the year ended March 2017, boosted largely by 3.9 percent growth in labour productivity in the construction industry. Service industries recorded labour productivity growth of 0.8 percent in aggregate over the year, while primary industries (agriculture, forestry, fishing, and mining) collectively recorded a 0.6 percent decline.

Multifactor productivity was also higher in goods-producing industries, up 2.0 percent in 2017. This compares with 0.9 percent growth in service industries and a 1.8 percent decline in primary industries.

Ideally, productivity measures should cover all industries in the economy but the industry coverage of these statistics includes only the ‘measured sector’ (ie mainly market industries). However, this still covers approximately 80 percent of New Zealand’s economy.

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