Capital productivity up more than labour productivity

Capital productivity up more than labour productivity

Capital productivity increased 0.7 percent in the year ended March 2015, Statistics New Zealand said today.

Capital productivity measures the amount of capital inputs available per worker. Capital inputs include items such as land and buildings, inventories, and equipment. When industry output increases at a greater rate than capital inputs, capital productivity increases.

"For the first time since March 2011, the increase in capital productivity was greater than the increase in labour productivity, which was up 0.3 percent in 2015," national accounts senior manager Gary Dunnet said. "This was largely due to the relatively stronger growth in labour inputs, up 3.7 percent in 2015."

Output growth was also strong in 2015, rising 4.1 percent. This was driven primarily by labour inputs, followed by capital inputs and multifactor productivity. Multifactor productivity rose 0.5 percent. This captures the effects of unobserved inputs such as technological progress, efficiency gains, and economies of scale.

Productivity data by industry is available up to the year ended March 2014. This data revealed that the construction industry contributed greatly to growth in both inputs and outputs.

From 1996 to 2015, multifactor productivity grew slightly more in New Zealand (up 0.7 percent a year) than in Australia (up 0.6 percent a year). However, Australia experienced a higher rate of growth in labour productivity over the same period – an average of 2.2 percent a year compared with an average 1.4 percent increase a year in New Zealand.

Productivity is regarded as key to increasing New Zealand’s standard of living in the long run. Productivity statistics cover approximately 80 percent of the country's economy, but they exclude government administration and defence, health, and education.

ENDS

© Scoop Media