Productivity

Labour and Multifactor Productivity

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Christian Bien

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Labour Productivity
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Labour productivity is the level of output per 1 hour of labour worked. Labour productivity formula = GDP/Labour Hours Worked.

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Labour Productivity Per Industry in the Last 5 Years
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The following information was sourced from the Department of Industry 'Competitiveness at a Glance' report. 


Sectors that experienced the highest labour productivity growth in the last 5 years: 

  • Finance and Insurance 3.21% 

  • Agriculture, Forestry and Fishing 3.91% 

  • Wholesale Trade 3.44% 


Sectors that experienced the lowest labour productivity growth in the last 5 years: 

  • Art and Recreation -0.34% 

  • Education and Training -0.12% 

  • Electricity, Gas, Water and Waste -0.48% 

  • Market Sector Average 1.58%

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Multifactor Productivity (MFP)
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Multifactor productivity measures the efficiency of a mixture of both labour and capital. MFP is the most reliable measure of productivity. The resulting productivity is always greater than its inputs due to the residual effect from efficient management, technology or other factors.

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Multifactor Productivity Per Industry in the Last 5 Years
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The following information was sourced from the Department of Industry 'Competitiveness at a Glance' report. Sectors that experienced the highest multifactor productivity growth in the last 5 years: 

  • Finance and Insurance 2.12% 

  • Wholesale Trade 1.87% - Rental, Hiring and Real Estate 1.75% Sectors that experienced the lowest multifactor productivity growth in the last 5 years: 

  • Mining - 3.78% 

  • Electricity, Gas, Water and Waste 2.1% 

  • Art & Recreation -0.87% 

Notice the similarities between industries that performed well and poorly amongst labour productivity and multifactor productivity.

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