5260.0.55.004 - Experimental Estimates of Industry Level KLEMS Multifactor Productivity, 2016-17 Quality Declaration 
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 03/12/2018   
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ANALYSIS OF RESULTS

In 2016-17, positive KLEMS MFP growth was recorded by 10 of the 16 market sector industries.

KLEMS PRODUCTIVITY GROWTH By Market Sector Industries, 2016-17, percentage change
Graph: KLEMS PRODUCTIVITY GROWTH By Market Sector Industries



KLEMS provides a detailed statistical decomposition on the contributions to output growth, represented by five input categories - capital (K), labour (L), energy (E), materials (M), and services (S). This allows for analysis on the changes to the input mix, such as the role of labour hours and composition of relative capital services or intermediate inputs, observed in industry output growth.

Industry KLEMS MFP growth:
    • Agriculture, Forestry and Fishing recorded growth of 4.5%. The growth in gross output (7.3%) outpaced the combined increase in total intermediate use and capital services. The decline in labour services, driven by subdued hours worked contributed to the growth in productivity.
    • Wholesale trade grew 2.8%, with growth in gross output of 4.3%. Capital services grew, driven by non-IT capital. Labour services fell with a decrease in employment. The growth in total intermediate inputs was attributable to services.
    • Professional, Scientific and Technical Services grew 2.4%, the strongest growth since 2001-02. Gross output recorded another year of significant growth (5.3%) with total intermediate inputs contributing positively, driven by service inputs.
    • The Construction industry fell 2.3%. The productivity of this industry has weakened over three consecutive years, with the fall in gross output (-2.8%) detracting from productivity in 2016-17. Capital and labour services recorded growth, but this was offset by the decline in total intermediate inputs.

KEY FIGURES, By Market Sector Industries, Annual points contribution to growth 2016-17, percentage change (a)

Contribution to  Gross Output Gross

Industry 
Gross Output Growth
Capital

Labour

Intermediate Inputs

 KLEMS MFP (b)
      IT
  Non-IT
  Hours Worked
 Composition
  Energy
 Material
 Services

Agriculture,forestryandfishing
7.3
0.0
0.1
-0.8
0.0
0.7
1.5
1.2
4.5
Mining
1.2
0.0
0.8
-0.4
0.1
0.5
-0.2
0.1
0.3
Manufacturing
-1.3
0.0
-0.1
0.9
0.1
-0.4
-0.6
0.0
-1.2
Electricity, gas, water and waste services
1.6
0.1
0.3
-0.4
0.1
0.6
0.1
0.6
0.3
Construction
-2.8
0.0
0.3
0.9
0.1
0.2
-0.2
-1.7
-2.3
Wholesale trade
4.3
0.1
0.3
-0.5
0.3
-0.2
0.1
1.5
2.8
Retail trade
2.7
-0.0
0.4
-0.9
0.2
0.0
0.3
1.1
1.6
Accommodation and food services
1.8
0.0
0.1
1.7
0.1
0.2
0.2
1.0
-1.4
Transport, postal and warehousing
1.7
0.1
0.4
-0.2
0.1
0.0
0.1
0.5
0.8
Information, media and telecommunications
4.4
0.3
1.0
0.3
0.2
0.0
0.2
2.6
-0.1
Financial and insurance services
3.9
0.7
0.0
0.6
0.2
0.0
-0.0
1.8
0.6
Rental, hiring and real estate services
2.7
0.0
0.7
-0.1
0.1
0.0
0.0
1.2
0.7
Professional, scientific and technical services
5.3
0.1
0.1
0.4
0.2
0.0
0.0
2.1
2.4
Administrative and support services
3.1
0.0
-0.0
1.6
0.2
-0.0
-0.1
1.6
-0.2
Arts and recreation services
1.7
0.0
0.4
-2.2
0.1
-0.0
-1.1
2.8
1.8
Other services
1.6
0.1
0.3
1.0
0.2
0.0
0.5
0.2
-0.7

(a) The reported percentage changes are based on natural log growth x 100.
(b) Gross output based MFP, quality adjusted hours worked basis.

Contributions to output growth are calculated by multiplying the growth in inputs by their respective cost shares. Two period average cost shares for each industry are reported in the table below. For example, in 2016-17, Services intermediate input comprised 50 percentage points of Electricity, Gas, Water and Waste Services current price gross output.

TWO PERIOD AVERAGE COST SHARES, By Market Sector Industries, percentage, 2016-17 (a) (b)

Industry 
Capital Services-IT
 Capital Services Non-IT
 Labour Services (c)
 Energy
 Material
 Services

Agriculture, forestry and fishing
0.2
30.0
12.0
4.4
19.5
34.1
Mining
0.2
39.3
13.4
5.3
6.1
35.7
Manufacturing
0.3
9.3
18.7
5.9
45.8
20.0
Electricity, gas, water and waste services
1.1
26.0
13.2
5.5
3.8
50.4
Construction
0.4
8.9
21.9
1.2
20.9
46.8
Wholesale trade
1.4
14.8
33.6
2.6
5.6
42.0
Retail trade
1.4
13.8
45.1
1.8
6.5
31.4
Accommodation and food services
0.3
10.1
37.8
2.6
25.1
24.2
Transport, postal and warehousing
0.8
18.5
26.6
7.8
2.4
43.9
Information, media and telecommunications
3.5
20.6
19.2
1.8
4.3
50.7
Financial and insurance services
5.9
38.2
19.1
0.4
0.5
35.9
Rental, hiring and real estate services
1.4
29.2
19.6
1.8
0.9
47.2
Professional, scientific and technical services
1.6
5.5
44.1
0.7
1.1
47.1
Administrative and support services
0.5
2.2
56.9
0.3
1.6
38.4
Arts and recreation services
0.9
11.9
25.0
0.6
16.4
45.2
Other services
0.9
5.1
44.8
0.5
23.2
25.5

(a) Two periods represent t and t-1.
(b) Percentages may not add to 100% due to rounding.
(c) Combined Hours worked and Composition.

Not only do variations in the cost shares for 2016-17 show that industry cost structures are very diverse, individual industries may also undergo structural change over time such as, for example, responding to changes in the relative prices of inputs. This can cause industry's cost shares to vary. For example, Electricity, gas, water & waste services and Construction have become reliant on services in the generation of gross output.


REVISIONS

This publication incorporates revisions as follows:
    • The 2017-18 edition of Australian System of National Accounts (cat. no. 5204.0) incorporates revisions in the 2016-17 annual supply and use tables. For specific details of the revisions, including changes to estimates, and the range of improvements incorporated in the revisions, please see 5204.0 - Australian System of National Accounts, 2017-18.
    • Revisions to hours worked published in the Labour Force, Australia. For more information, please see Labour Force, Australia (cat. no. 6202.0).
    • The final rebenchmarking of Labour Force Survey to 2016 Census of Population and Housing data, scheduled for release on 13 Dec 2018 will be reflected in the 2018-19 release of 5260.0.55.002. Hours worked series used in this release is consistent with 5204.0 - Australian System of National Accounts, 2017-18.