Long-term productivity report reveals growth drop
New Zealand's labour productivity grew more quickly than Australia's between 1986 and 2008, although its performance started to lag in the second half of the period covered, a new report says.
The Statistics New Zealand (SNZ) report put growth in labour productivity at 2.5% a year between 1986 and 2008, while Australia's grew at 2.1% a year.
New Zealand's labour productivity grew at 3.2% a year and Australia's at 2% from 1986 to 1996, while from 1996-2008 the positions reversed, with labour productivity growth slowing to 1.9% a year and Australia catching up at 2.3% a year.
In the report, SNZ said there had been growing interest in gaining a better understanding of this country's productivity performance, both within industries and relative to other countries, notably Australia.
Productivity growth was critical to long term growth in material living standards, SNZ said.
The report – Industry Productivity Statistics 1978-2008 – broke measured sector data, which now covered 74% of the economy, down into 23 industries. It was a major step forward in determining New Zealand's productivity performance from 1978, SNZ said.
New official estimates of productivity growth for New Zealand at industry level allowed fresh light to be case on the debate about this country's economic performance relative to Australia's.
Multifactor productivity -- indexes of real GDP per combined unit of labour and capital -- grew at 1.4 percent a year in this country and 1.1 percent a year over the entire 1986-2008 period. From 1996 onwards, this country grew at 1.1 percent a year and Australia at 1 percent.
Capital productivity in the measured sector -- declined at 0.2 percent annually in this country and 0.4 percent in Australia.
The report said the main contributors of productivity growth in the business sector of New Zealand's economy were shifting away from manufacturing and agriculture.
"Manufacturing and agriculture, although still growing, now contribute less to business sector labour productivity growth, while retail, wholesale, and the finance and insurance industries have become more significant drivers," economic statistics development manager Jude Hughes said.
The communication services industry posted the strongest labour productivity growth, rising 9.3% annually, but its contribution to business sector growth had declined in relative terms.
The only industry in which labour productivity declined from 1978-2008 was the accommodation, cafés and restaurants industry, which fell 1.3% annually, SNZ said.
Agriculture, forestry, and fishing labour productivity grew on average 4% a year, with its strongest period of growth from 1985 to 1997.
Electricity, gas, and water supply productivity grew 4.4%, transport and storage productivity grew 3.6%, and finance and insurance productivity grew 3.4 percent.