Industry Productivity

GDP per hour worked is a measure of labour productivity. It measures the efficiency of labour input (hours worked) used in the production process.

Labour productivity growth supports ongoing improvement in a country’s living standards. Growth in labour productivity depends on investment in physical capital, technological advancement and improvements in knowledge intensity and skills.

Multi-factor productivity is the increase in productivity that cannot be explained by increases in labour or capital. It captures the effects of intangible changes such as; changes in management practices, brand names, organisational change, general knowledge, network effects, spill-overs from production factors, adjustment costs and economies of scale.

Labour productivity and multi-factor productivity figures can be volatile, with results varying widely between years. Figures are best interpreted by examining long run averages.