Productivity in an international context
On the 8th of December this year Martin Weale, of the Bank of England’s Monetary Policy Committee, highlighted concerns with the UK’s recent productivity growth. In the UK total output per worker is now no higher that it was 6 years ago. The UK is not the only country experiencing weak productivity growth. Many OECD countries have experienced slower productivity growth (GDP per hour worked) from 2010 to 2013 than before the Great Recession. Indeed, of the 34 OECD countries only Australia, Chile and Spain experienced faster productivity growth from 2010 to 2013 than from 2000 to 2007.
New Zealand only just misses the cut of counties whose performance improved. The average annual increase in GDP per hour worked in these later years was 1.1% compared to 1.3% from 2000 to 2007. Further, while New Zealand had the 26th highest average annual growth in productivity in the years to 2007, since 2010 New Zealand has had the 10th highest average rate of growth in productivity in the OECD. When this performance is measured for 2008 to 2013 then we are only one of 5 countries whose average annual growth rate in productivity increased (along with Australia, Luxembourg, Poland and Spain).
But the story is not so good when levels, not just rates of productivity growth, are considered. OECD data on GDP per hour worked in constant 2005 prices show that of the 34 OECD countries New Zealand had the 24th highest level of productivity in 2013. Indeed, New Zealand’s GDP per hour worked would need to increase by 34% to reach the OECD average. This is a worse than in 2000 (where the OECD average was 31% higher in terms of New Zealand’s figure) and shows that while the last few years have been promising, New Zealand’s productivity problems are far from over.
GDP per hour worked
| Country | Average Annual Growth 2000 to 2007 | Average Annual Growth 2008 to 2009 | Average Annual Growth 2010 to 2013 | Average Annual Growth 2008 to 2013 | 2013 Level (US$, 2005 PPP) |
| New Zealand | 1.3% | 4.6% | 1.1% | 1.4% | 30.2 |
| Australia | 1.4% | 1.9% | 2.3% | 1.7% | 45.8 |
| Austria | 1.9% | -0.2% | 1.0% | 0.8% | 45.7 |
| Belgium | 1.3% | -1.3% | -0.1% | -0.1% | 52.5 |
| Canada | 0.9% | 0.7% | 0.6% | 0.9% | 42.7 |
| Chile | 3.1% | 0.6% | 3.6% | 2.8% | 19.9 |
| Czech Republic | 4.7% | -2.5% | 0.7% | 0.4% | 28.8 |
| Denmark | 1.2% | -2.0% | 0.1% | 0.6% | 46.9 |
| Estonia | 6.1% | 2.0% | 1.8% | 2.6% | 22.7 |
| Finland | 2.3% | -4.7% | 0.2% | -0.2% | 42.6 |
| France | 1.4% | -0.6% | 0.8% | 0.7% | 50.9 |
| Germany | 1.5% | -2.6% | 1.0% | 0.6% | 50.9 |
| Greece | 2.5% | -2.7% | -0.8% | -1.0% | 28.3 |
| Hungary | 4.1% | -3.1% | 1.7% | 0.4% | 22.8 |
| Iceland | 3.9% | 5.7% | 0.5% | 1.1% | 40.8 |
| Ireland | 2.0% | 3.3% | 0.6% | 1.9% | 50.6 |
| Israel | 1.4% | -0.3% | 1.0% | 1.1% | 33.2 |
| Italy | 0.1% | -2.3% | -0.1% | -0.1% | 38.4 |
| Japan | 1.6% | -0.9% | 0.7% | 1.0% | 36.1 |
| Korea | 4.6% | 1.6% | 3.0% | 3.6% | 29.9 |
| Luxembourg | 0.7% | 0.5% | 0.3% | 1.5% | 69.0 |
| Mexico | 1.0% | 0.0% | 0.9% | -0.4% | 15.1 |
| Netherlands | 1.3% | -1.9% | 0.1% | 0.0% | 52.3 |
| Norway | 1.3% | 0.3% | 0.1% | 1.4% | 62.6 |
| Poland | 3.4% | 3.1% | 2.8% | 0.2% | 22.9 |
| Portugal | 1.3% | 0.0% | 0.9% | 3.7% | 26.7 |
| Slovak Republic | 5.4% | -2.5% | 2.2% | 1.2% | 30.4 |
| Slovenia | 3.9% | -6.5% | 0.9% | 1.7% | 35.2 |
| Spain | 0.4% | 2.5% | 1.9% | -0.2% | 40.4 |
| Sweden | 2.5% | -2.4% | 0.5% | 2.1% | 46.3 |
| Switzerland | 1.5% | -2.1% | 0.7% | 0.5% | 44.5 |
| Turkey | 4.2% | -4.0% | 1.6% | 0.4% | 23.4 |
| United Kingdom | 2.2% | -2.4% | -0.1% | 0.8% | 44.5 |
| United States | 2.1% | 2.8% | 0.4% | -0.2% | 56.9 |
| Euro area (18 countries) | 1.2% | -1.2% | 0.9% | 1.4% | 43.7 |
| Euro area (15 countries) | 1.3% | -1.4% | 0.8% | 0.7% | 45.1 |
| European Union (28 countries) | 1.6% | -1.6% | 0.7% | 0.6% | 38.4 |
| G7 | 1.7% | 0.6% | 0.6% | 0.6% | 48.8 |
| OECD – Total | 1.8% | 0.3% | 0.8% | 1.0% | 40.5 |
| Russia | 5.3% | -4.7% | 2.2% | 0.9% | 15.6 |
Source: OECD.Stat