Productivity flatlines in the year to March 2024
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The news: Labour productivity stagnated in the three months to March, according to the latest Productivity Commission bulletin.
The numbers: There was a 0.1% rise in output over the March quarter, which was matched by a similar rise in hours worked. This means there was no productivity growth.
In the 12 months to March there was a 2.2% drop in productivity in the non-market sector (healthcare, social services, education and training, public administration and safety), offset by a 0.8% in the market sector. The non-market sector had a 5.5% lift in hours worked while the market sector increased 0.5%.
The market sector accounts for 80% of output in the economy and did have a 0.5% rise in productivity over the March quarter but it was offset by a 1.3% decline in the non-market sector.
The context: Productivity growth is critical for improving living standards by helping lift wage growth and grow the economy. However, it has been languishing for decades and, following a boost from the pandemic, it has continued to slump.
What they said: "With the end of the COVID-19 productivity bubble, labour productivity seems to have reverted to the stagnation we’ve seen for most of the past decade," said Productivity Commission deputy chair Alex Robson.
The source: Productivity Commission bulletin
