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Understanding productivity trends

Author

Listed:
  • Ben Dolman

    (Treasury, Government of Australia)

  • Lan Lu

    (Treasury, Government of Australia)

  • Jyoti Rahman

    (Treasury, Government of Australia)

Abstract

Market sector productivity — the output produced per hour worked — grew at an annual rate of 3.2 per cent during the five years to 1998-99, which was the fastest rate on record. In the five years to 2003-04, productivity growth eased to 2.2 per cent per year, which is around the average rate over the past four decades. On balance, business cycle fluctuations, international developments, investment in physical and human capital (including information and communication technology), and the movement of labour across industries did not cause this easing in productivity growth. Rather, these trends are apparent within a number of industries: mining, construction, utilities, wholesale trade, communications and finance and insurance. A closer inspection of these industries suggests that, with the exception of mining, the recent trends at least partly reflect an easing of growth rates towards their historical averages after the unusual productivity surge of the late 1990s.

Suggested Citation

  • Ben Dolman & Lan Lu & Jyoti Rahman, 2006. "Understanding productivity trends," Economic Roundup, The Treasury, Australian Government, issue 1, pages 35-52, March.
    • Handle: RePEc:tsy:journl:journl_tsy_er_2006_1_1
    as

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    File URL: http://archive.treasury.gov.au/documents/1087/PDF/04_Productivity_trends.pdf
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    References listed on IDEAS

    as
    1. Abbas Valadkhani, 2003. "An Empirical Analysis of Australian Labour Productivity," Australian Economic Papers, Wiley Blackwell, vol. 42(3), pages 273-291, September.
    2. Dean Parham, 2004. "Sources of Australia's Productivity Revival," The Economic Record, The Economic Society of Australia, vol. 80(249), pages 239-257, June.
    3. Jyoti Rahman, 2005. "Comparing Australian and United States productivity," Economic Roundup, The Treasury, Australian Government, issue 2, pages 27-45, June.
    4. David H. Romer & Jeffrey A. Frankel, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, vol. 89(3), pages 379-399, June.
    5. Unknown, 2005. "Review of National Competition Policy Reforms," Inquiry Reports 31898, Productivity Commission.
    6. Productivity Commission, 2005. "Review of National Competition Policy Reforms," Others 0506004, University Library of Munich, Germany.
    7. Susanto Basu & John Fernald, 2001. "Why Is Productivity Procyclical? Why Do We Care?," NBER Chapters, in: New Developments in Productivity Analysis, pages 225-302, National Bureau of Economic Research, Inc.
    8. Graeme Davis & Gene Tunny, 2005. "International comparisons of research and development," Economic Roundup, The Treasury, Australian Government, issue 4, pages 63-82, December.
    9. Productivity Commission, 2005. "Review of National Competition Policy Reforms," Inquiry Reports, Productivity Commission, Government of Australia, number 33.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. John Quiggin, 2006. "Stories about productivity," Australian Public Policy Program Working Papers WP4P06, Risk and Sustainable Management Group, University of Queensland.
    2. Greg Coombs & Chris Roberts, 2007. "Trends in infrastructure," Economic Roundup, The Treasury, Australian Government, issue 1, pages 1-16, February.
    3. Graeme Davis & Jyoti Rahman, 2006. "Perspectives on Australia's productivity prospects," Treasury Working Papers 2006-04, The Treasury, Australian Government, revised Sep 2006.
    4. John Edwards & David Gruen & John Quiggin, 2011. "Wrap-up Discussion," RBA Annual Conference Volume (Discontinued), in: Hugo Gerard & Jonathan Kearns (ed.),The Australian Economy in the 2000s, Reserve Bank of Australia.
    5. Samantha Farmakis‐Gamboni & David Prentice, 2011. "When Does Reducing Union Bargaining Power Increase Productivity? Evidence from the Workplace Relations Act," The Economic Record, The Economic Society of Australia, vol. 87(279), pages 603-616, December.
    6. Patrick D’Arcy & Linus Gustafsson, 2012. "Australia’s Productivity Performance and Real Incomes," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 23-36, June.
    7. Robert Ewing & Sian Fenner & Steven Kennedy & Jyoti Rahman, 2007. "Recent productivity outcomes and Australia’s potential growth," Economic Roundup, The Treasury, Australian Government, issue 3, pages 49-71, September.
    8. Ben Dolman & Dean Parham & Simon Zheng, 2007. "Can Australia Match US Productivity Performance?," Staff Working Papers 0703, Productivity Commission, Government of Australia.
    9. Jyoti Rahman & David Stephan & Gene Tunny, 2009. "Estimating trends in Australia's productivity," Treasury Working Papers 2009-01, The Treasury, Australian Government, revised Feb 2009.
    10. Ben Dolman, 2009. "What Happened to Australia's Productivity Surge?," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 42(3), pages 243-263, September.
    11. Quiggin, John, 2011. "The Lost Golden Age of Productivity Growth?," Risk and Sustainable Management Group Working Papers 151526, University of Queensland, School of Economics.
    12. Samantha Farmakis-Gamboni & David Prentice, 2007. "Does Reducing Union Bargaining Power Increase Productivity?," Working Papers 2007.04 EDIRC Provider-In, School of Economics, La Trobe University.

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    More about this item

    Keywords

    labour productivity; labour market; macroeconomics;
    All these keywords.

    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production

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