Labour productivity improved 3.5 per cent in the year to March 2010, according to new Statistics New Zealand figures.
In part that reflected fewer workers in manufacturing, building and business services with those remaining producing more each.
The standout sectors were communications services, with productivity up 12.4 per cent in the year to March 2010, and finance and insurance up 7 per cent.
There was strong growth in productivity for the goods producing sector, up 3.8 per cent, and the service sector, up 3.3 per cent.
Labour productivity growth is important and 3.5% isn’t too bad. However the way it has come about is sub-optimal:
Labour productivity is the amount of goods and services produced by each worker. The declines in labour input were greater than that for output, resulting in labour productivity growth for these sectors.
Obviously the recession impacted. Ideally what we want is labour inputs increasing, but outputs increasing even faster.