Kilm 18. Labour productivity and unit labour costs indicator

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KILM 18. Labour productivity and unit labour costs

Introduction

This chapter presents information on labour productivity for the aggregate economy (table 18a), manufacturing (table 18b), transport and communication (table 18c), and wholesale and retail trade, including hotels and restaurants (table 18d). Labour productivity is defined as output - measured by gross domestic product (GDP) - per unit of labour input. For a substantial number of economies, the productivity measures for the total economy and manufacturing are complemented with measures of unit labour cost, i.e. labour cost per unit of output. In addition, this edition of KILM provides, for the first time, estimates of productivity in agriculture, forestry and fisheries (table 18e).

The chapter provides estimates of growth rates of labour productivity and unit labour cost, as well as of levels expressed in US dollars. All estimates are made according to the national accounts conventions to ensure that labour productivity for individual sectors and for the total economy can be compared, thus providing an indication of the contribution of each sector to overall economic performance. Hence, the selection of economies is based on the availability of consistent series of output in US dollars and labour input. There are significant limitations in the availability of reliable data for these indicators, particularly when international comparability is the main criterion. In particular, the estimates for the two service industries and the agriculture, forestry and fisheries sector are of an experimental nature, largely because of the difficulty in obtaining adequate measures for each economy to convert services GDP to US dollars.

The productivity indicator for the aggregate economy covers 44 economies within the developed (industrialized) grouping, transition economies, Asia and the Pacific and Latin America and the Caribbean regions (table 18a). Together, these economies represent more than half of the world population and more than two-thirds of world output. For some economies (mostly in Europe and North America, with some in Asia and South America), separate measures are provided for manufacturing (table 18b, 20 economies), transport and communication (table 18c, 18 economies) and trade (table 18d, 15 economies). Unit labour cost estimates for the aggregate economy and for manufacturing are provided for a somewhat smaller group of economies.

Trends

Figure 18a. Labour productivity growth rates, 1980-2001

		Total economy		Manufacturing		Transport and communications	Wholesale and retail trade, including hotels and restaurants	Agriculture, forestry and fisheries
		GDP per person employed, 1980-2001	GDP per hour worked, 1980-2001	GDP per person employed, 1980-2001	GDP per hour worked, 1980-2001	GDP per person employed, 1980-2000
Major Europe
	Austria	1.3¹	2.0¹	...	...	...	...	4.6
	Belgium	1.5¹	2.0¹	3.6	3.5	2.7	...	4.3
	Denmark	1.5¹	1.8¹	...	...	...	...	6.3
	Finland	2.3¹	2.7¹	5.3	5.6	3.7	2.2	4.2
	France	1.4¹	2.0¹	3.2	3.9	3.5 a	1.4 b	5.1
	Germany, Federal Republic of (Western)	1.7¹	2.6¹	2.4	3.1	3.4	0.9	...
	Germany	2.0²	1.8²	...	...	...	...	5.8
	Greece	1.7¹	1.8¹	...	...	...	...	2.2
	Ireland	3.2¹	4.0¹	...	...	...	...	4.5
	Italy	1.3¹	1.6¹	...	...	...	...	5.4
	Netherlands	0.6¹	1.4¹	2.7	3.4	2.9	1.2	3.2
	Norway	2.0¹	2.6¹	...	...	...	...	4.3
	Portugal	1.6¹	2.1¹	...	...	...	...	1.1
	Spain	1.2¹	1.5¹	2.1	2.5	...	...	5.7
	Sweden	1.8¹	1.6¹	4.6	3.9	3.4	2.6	5.0
	Switzerland	0.3¹	1.1¹	...	...	...	...	0.1
	Turkey	2.6¹	2.7¹	...	...	...	...	2.0
	United Kingdom	1.8¹	2.0¹	3.7	3.8	4.0 b	1.9	3.4

Major non-Europe
	Australia	1.5¹	1.7¹	1.7	1.4	4.2	0.8 b	2.9
	Canada	1.2¹	1.2¹	2.3	2.1	2.3	1.0	2.5
	Japan	1.7¹	2.2¹	2.9	3.3	2.1	2.4	1.9
	New Zealand	0.3¹	0.7³	...	...	...	...	3.2
	United States	1.6¹	1.4¹	3.6	3.4	2.6	2.7	4.1

Transition Economies
	Albania	...	...	...	...	...	...	0.8
	Belarus	...	...	...	...	...	...	-0.7⁴
	Bulgaria	1.1	...	...	...	...	...	1.4
	Czech Republic	1.5²	1.8²	3.0⁵	...	2.6⁶	...	15.9⁶
	Hungary	1.9²	2.3	...	...	...	...	6.6
	Kazakhstan	...	...	...	...	...	...	-7.4⁶
	Kyrgystan	...	...	...	...	...	...	-1.9⁴
	Latvia	...	...	...	...	...	...	-1.3⁶
	Lithuania	...	...	...	...	...	...	3.7⁷
	Poland	3.0¹	4.6⁸	...	...	...	...	3.8⁶
	Russian Federation	-1.6²	...	...	...	...	...	-1.9⁷
	Slovakia	3.4²	4.0⁹	...	...	...	...	6.4¹⁰
	Slovenia	3.2⁵	...	...	...	...	...	2.6⁷
	Tajikistan	...	...	...	...	...	...	-7.6⁶
	Turkmenistan	...	...	...	...	...	...	-5.1⁶
	Ukraine	...	...	...	...	...	...	-5.4⁶
	Uzbekistan	...	...	...	...	...	...	-0.4⁶

Asia and the Pacific
	Bangladesh	1.5	...	...	...	...	...	1.4
	Cambodia	...	...	...	...	...	...	0.7⁴
	China	5.2	...	6.7⁵	...	...	...	4.1
	Hong Kong, China	3.3	3.5	...	...	...	...	...
	India	3.2	...	4.3	...	3.5	...	1.6
	Indonesia	1.8	...	3.2	...	0.0	1.4	1.2
	Korea, Republic of	4.9¹	5.0¹	7.5	8.0	4.6	3.5	6.5
	Malaysia	2.8	...	...	...	...	...	2.3
	Myanamar	2.2¹¹	...	...	...	...	...	2.1
	Nepal	...	...	...	...	...	...	2.2
	Pakistan	3.0	...	...	...	...	...	2.7
	Phillipines	-0.6	...	...	...	...	...	1.0
	Singapore	3.7	3.8	...	...	...	...	0.3
	Sri Lanka	2.2	...	...	...	...	...	1.3
	Taiwan, China	4.3	5.2	4.9	5.7	6.4	4.9	...
	Thailand	3.9	...	...	...	...	...	3.3
	Viet Nam	...	...	...	...	...	...	1.5¹²

Latin America and the Caribbean
	Argentina	-0.2	-0.1	...	...	...	...	2.1
	Bolivia	...	...	...	...	...	...	1.0⁴
	Brazil	-0.2	0.2	0.8	...	1.9	-3.7	3.6
	Chile	1.9	1.8	...	...	...	...	2.9
	Colombia	0.7	1.0	...	...	...	...	2.3
	Costa Rica	...	...	...	...	...	...	2.1
	Cuba	...	...	...	...	...	...	-2.6⁴
	Dominican Republic	...	...	...	...	...	...	-0.8
	Ecuador	...	...	...	...	...	...	1.6
	El Salvador	...	...	...	...	...	...	-0.3
	Guatemala	...	...	...	...	...	...	-0.1
	Haiti	...	...	...	...	...	...	-1.9
	Honduras	...	...	...	...	...	...	1.0
	Mexico	0.1¹	0.0¹	0.6	...	1.1	-0.8	2.6
	Nicaragua	...	...	...	...	...	...	-0.3
	Panama	...	...	...	...	...	...	1.8
	Paraguay	...	...	...	...	...	...	1.2
	Peru	-1.5	...	...	...	...	...	2.2
	Uruguay	...	...	...	...	...	...	2.3
	Venezuela	-1.3	-1.2	...	...	...	...	0.0

Sub-Saharan Africa
	Benin	...	...	...	...	...	...	3.3
	Burundi	...	...	...	...	...	...	-0.6
	Cameroon	...	...	...	...	...	...	2.2
	Chad	...	...	...	...	...	...	1.1
	Congo, Democratic Republic of	-5.8	...	...	...	...	...	-0.5
	Côte d'Ivoire	-2.4	...	...	...	...	...	0.1
	Ethiopia	0.1	...	...	...	...	...	...
	Ghana	0.5	...	...	...	...	...	-0.9
	Guinea	...	...	...	...	...	...	1.6¹³
	Kenya	-0.5	...	...	...	...	...	-1.0
	Madagascar	...	...	...	...	...	...	-0.3
	Malawi	...	...	...	...	...	...	1.5
	Mali	...	...	...	...	...	...	0.7
	Mozambique	...	...	...	...	...	...	1.7¹⁴
	Niger	...	...	...	...	...	...	-1.1
	Nigeria	-0.7	...	...	...	...	...	3.2
	Rwanda	...	...	...	...	...	...	-0.4
	Senegal	...	...	...	...	...	...	0.5
	South Africa	-0.8	...	...	...	...	...	1.3
	Tanzania, United Republic of	-0.3	...	...	...	...	...	1.3⁴
	Uganda	...	...	...	...	...	...	5.1¹⁵
	Zambia	...	...	...	...	...	...	0.3
	Zimbabwe	...	...	...	...	...	...	0.5

Middle East and North Africa
	Algeria	...	...	...	...	...	...	1.2
	Egypt	1.7	...	...	...	...	...	4.2
	Israel	1.0	...	...	...	...	...	...
	Iran, Islamic Republic of	0.9	...	...	...	...	...	2.2
	Iraq	-6.9	...	...	...	...	...	...
	Jordan	-1.5	...	...	...	...	...	-1.5
	Morocco	0.6	...	...	...	...	...	0.0
	Saudi Arabia	-2.9	...	...	...	...	...	10.8
	Sudan	...	...	...	...	...	...	3.3
	Syrian Arab Republic	-0.2	...	...	...	...	...	0.4
	Tunisia	...	...	...	...	...	...	3.5
	United Arab Emirates	-2.4	...	...	...	...	...	...
	Yemen	0.2	...	...	...	...	...	3.1

… Not available
Notes: ¹ 1980-2002; ² 1990-2002; ³ 1987-2002; ⁴ 1987-2001; ⁵ 1990-2001; ⁶ 1990-2000; ⁷ 1992-2000; ⁸ 1989-2002; ⁹ 199-2001; ¹⁰ 1991-2000; ¹¹ 1993-2001; ¹² 1985-2000; ¹³ 1986-2000; ¹⁴ 1984-2000; ¹⁵ 1982-2000

On average, labour productivity in the group of economies termed major Europe (total economy) grew somewhat faster than in the United States between 1980 and 2002, so that some convergence of productivity levels can be observed. The highest growth rates were seen in Asia, although productivity levels remain well below those of the developed (industrialized) economies.

Figure 18b. Labour productivity as a percentage of the United States level, total economy, 2001 figure18b

The United States continues to show the highest labour productivity levels measured as GDP per person employed; however, four economies – Belgium, France, the Netherlands and Norway – showed levels higher than that of the United States when measured as GDP per hour worked. The difference in rankings can perhaps be explained by the fact that there has been a greater decline in number of working hours per person employed in some European economies than in the United States.

Figure 18c. Labour productivity, total economy, selected developed (industrialized )economies, 1980-2002 figure18c

The time series of labour productivity measured as GDP per person employed shows some interesting results in terms of the productivity gap in relation to the United States. Comparing Finland, France, Ireland, the Netherlands, Switzerland and the United States, data reveal a substantial decrease in the gap between Ireland and the United States in the period from 1980 to 2002, little change in the gap between Finland and the United States, and increasing gaps with France, the Netherlands and Switzerland relative to the United States. The Netherlands and Switzerland show very little change in labour productivity over the period whereas the other economies maintain an increasing trend, although to varying degrees.

Figure 18d. Labour productivity in manufacturing, selected Asian economies, 1980-2001
figure18d

A comparison of GDP per person employed in manufacturing in Asian economies shows that while overall productivity levels grew in Japan (despite a few temporary downturns), the Republic of Korea and Taiwan (China) labour productivity in manufacturing seemed to stagnate in the other Asian economies of India and Indonesia.

Figure 18e. Labour productivity in agriculture, selected African economies, 1980-2001 figure18e

Labour productivity in agriculture, forestry and fisheries in sub-Saharan Africa was widely dispersed. In 2001, productivity levels varied from 3,256 in 1995 US dollars in South Africa to 178 in Cameroon. The time series from 1980 to 2001 reveals wide fluctuations in agricultural labour productivity levels in economies such as South Africa and Zimbabwe, perhaps implying that perhaps agricultural production is more affected by external events than manufacturing and services. Agricultural productivity increased hardly at all or decreased over the period in Burundi, Cameroon, Chad, Côte d’Ivoire and Rwanda.