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1387.3 - Queensland in Review, 2003  
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 25/11/2003  Ceased
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Contents >> The Economy >> Components of Queensland's Economic Growth Per Person

LABOUR PRODUCTIVITY,
AVERAGE HOURS WORKED,
EMPLOYMENT RATE,
PARTICIPATION RATE,
PROPORTION OF THE POPULATION AGED 15 YEARS OR MORE


Note:

1. All years stated in this article refer to the year ended in June.

2. The time series data from National Accounts: State Accounts (cat. no. 5220.0) used in this article refer to the data available for the 2001-02 issue. Please note that time series data in the 2002-03 issue has been revised. See end note 2 for further information.

3. The calculations for labour force and population data are based on averages for the financial year ended June.


INTRODUCTION

The purpose of this article is to identify some components which contributed to Queensland's economic growth per person between 1991-92 and 2001-02. The components of economic growth per person used in this analysis are labour productivity, average hours worked, employment rate, participation rate and the proportion of the population aged 15 years or more. The average annual growth of these components are summed together to equal the average annual economic growth per person. Queensland is compared to Australia in this article.


ECONOMIC GROWTH PER PERSON

Following the national economic growth downturn in the early 1990's, Queensland experienced a decade of strong economic growth.

Between 1991-92 and 2001-02, Queensland's real gross state product (GSP) increased by 62.2%, an annual average increase of 5.0%, compared with 3.9% growth in Australia's gross domestic product (GDP). Refer to The Queensland Economy 1991-92 to 2001-02 for further information on the Queensland economy.

Between 1991-92 and 2001-02, Queensland's population grew at an annual average rate of 2.0%, leading to an average annual growth in real GSP per person of 2.9%. Over the same period, Australia's population grew at an annual rate of 1.2%, leading to an average growth in real GDP per person of 2.7%, which was 0.2 percentage points less than Queensland.

QUEENSLAND'S ECONOMIC GROWTH AND POPULATION GROWTH
AUSTRALIA'S ECONOMIC GROWTH AND POPULATION GROWTH
Graph - This graph looks at Queensland's growth in GSP, GSP per person and Population between 1991-92 and 2001-02.
Graph - This graph looks at Australia's growth in GSP, GSP per person and Population between 1991-92 and 2001-02.
Index Base: Year Ended June 1992 = 100.0
(a) Based on GSP, chain volume estimates, experimental series. See endnote 1 for further details.

Source: Australian National Accounts: State Accounts (cat. no. 5220.0); Population by Age and Sex, Australian States and Territories (cat. no. 3201.0)
Index Base: Year Ended June 1992 = 100.0



Source: Australian National Accounts: State Accounts (cat. no. 5220.0); Population by Age and Sex, Australian States and Territories (cat. no. 3201.0)

Growth in real GSP per person can be attributed to a number of factors. For example, increasing inputs such as labour and capital can increase economic growth. Labour productivity growth and population growth can also stimulate economic growth. Labour productivity may be more important for long term economic growth per person because increases in productivity can lead to increases in output, without influencing the total population.


ANALYSING ECONOMIC GROWTH

The article uses an analysis based on the 'Intergenerational Report: 2002-03 Budget Paper No. 5' . This report was released by the Commonwealth Treasurer in May 2002 and analyses Australia's economic growth in terms of changes in the amount and productivity of labour. The analysis begins from the following composition:

Economic Growth: Components of Real GDP/Population
+
+
+
+
This expression is referred to as labour productivity. Changes in this ratio can reflect technological changes and changes in other factor inputs (such as capital) as well as labour efficiency. For example, increases in labour productivity means an economy is producing more output from less inputs, and possibly leading to growth in real GSP per person. The ratio between hours worked and employed persons is known as average hours worked. Increases in average hours worked is likely to lead to increases in total production, and influence the growth in real GSP per person. This expression is referred to as the employment rate. The effect of an increase in the employment rate may be an increase in total production, and possibly increasing real GSP per person. The ratio between labour force and the population aged 15 years and over is referred to as the participation rate and measures the proportion of the population who form the labour supply. The effect of an increase in the participation rate is an increase in the labour force available to work, and possibly increasing real GSP per person.This expression is referred to as the proportion of the population aged 15 years or more. Increases in this ratio indicate a greater proportion of the population who is available to work. This may also indicate an ageing population.
= Real GDP / Population (% change)

Each of these components is examined in more detail for Queensland in the following sections. Click on the links above to jump to the specific section.


LABOUR PRODUCTIVITY (click here for definition)

Between 1991-92 and 2001-02 labour productivity measured by real GSP per hour worked rose by 28.1%, an annual average growth of 2.5%. Over the same period, Australia recorded an annual average growth in labour productivity of 2.2%. Between 1991-92 and 1998-99, Queensland's labour productivity growth was similar to Australia's. From June 1999-00 to 2001-02, Queensland's labour productivity has been higher than Australia's. Growth in Queensland's labour productivity has contributed positively to the 2.9% annual average economic growth per person between 1991-92 and 2001-02.

Queensland's labour productivity growth reflects two kinds of change. The first is where each worker has more capital to work with. This is referred to as capital deepening. The second relates to an increase in output per worker and capital combined. This is referred to as multifactor productivity. Underlying these changes were influences such as technological advances, improvements to the quality of labour or management practices, and shifts of labour, capital and other inputs towards firms or industries that are more productive. Please refer to Measuring Australia's Progress, Productivity for further information on productivity.
Additional information on labour productivity can be found in the paper by the Office of Economic and Statistical Research on 'The Drivers of Economic Growth'.


LABOUR PRODUCTIVITY(a)
Graph - This graph compares Queensland's and Australia's labour productivity between 1991-92 and 2001-02.
Index Base: Year Ended June 1992 = 100.0
(a) Real GSP(b) per hour worked
(b) Based on GSP, chain volume estimates, experimental series. See endnote 1 for further details.

Source: Australian National Accounts: State Accounts (cat. no. 5220.0); Labour Force, Australia, Detailed - Electronic Delivery, Monthly (cat. no. 6291.0.55.001)


AVERAGE HOURS WORKED (click here for definition)

Between 1991-92 and 2001-02, the average hours worked in Queensland fell by 3.3%, an annual average fall of 0.3%. Average hours worked fell by 0.2% in Australia. Queensland's general downward trend in average hours worked suppressed economic growth per person between 1991-92 and 2001-02.

Underlying the decrease in average hours worked in Queensland was a strong rise in the number of part-time employees. The number of part-time employees rose by 56.7% between 1991-92 and 2001-02, whereas the number of full-time employees rose by 22.8%.

Queensland experienced stronger growth than Australia in both full-time and part-time employed persons. The number of part time employees in Australia rose by 45.9% between 1991-92 and 2001-02, and the number of full time employees rose by 12.9%.

AVERAGE HOURS WORKED
Graph - This graph compares Queensland's and Australia's average hours worked between 1991-92 and 2001-02.
Index Base: Year Ended June 1992 = 100.0

Source: Labour Force, Australia, Detailed - Electronic Delivery, Monthly (cat. no. 6291.0.55.001)

EMPLOYMENT RATE (click here for definition)

In 2001-02, the employment rate in Queensland was 92.1%, compared with 90.2% in 1991-92, an annual average growth of 0.2%. This was mirrored by a fall in the unemployment rate from 9.8% in 1991-92 to 7.9% in 2001-02 and was reflected in part by the economic downturn in the early 1990's and the general improvement in the Queensland economy since then. Improvement in Queensland's employment rate has positively contributed to the 2.9% annual average increase in economic growth per person between 1991-92 and 2001-02.

The employment rate in Australia compared to Queensland has been higher in every year between 1995-96 and 2001-02. The average annual employment rate growth in Australia between 1991-92 and 2001-02 was 0.4%.

For further articles on Queensland's labour force status, refer to the following links Labour Force Status at June 2002, Unemployment to June 2002 and Labour Force Australia (cat no. 6202.0).

EMPLOYMENT RATE
Graph - This graph compares Queensland's and Australia's employment rate between 1991-92 and 2001-02.

Source: Labour Force, Australia, Detailed - Electronic Delivery, Monthly (cat. no. 6291.0.55.001)

PARTICIPATION RATE (click here for definition)
Between 1991-92 and 2001-02, Queensland's labour force participation rate rose from 63.4% to 65.0%, an annual average growth of 0.3%. Between 1991-92 and 2001-02, Queensland's participation rate has been consistently higher than Australia's. Australia's labour force participation rate rose from 62.9% to 63.7%, an annual average growth of 0.1%. The increase in the participation rate for Queensland between 1991-92 and 2001-02 positively contributed to the increase in Queensland's annual average economic growth per person over this period.

Males and females, between 1991-92 and 2001-02, have shown the opposite trends: the participation rate for males fell from 74.9% to 73.3%, whereas the rate for females rose from 52.1% to 57.0%.

Refer to the Labour Force Participation Rate to June 2002 and Labour Force Australia (cat. no. 6202.0) for further information regarding Queensland's participation rate.

PARTICIPATION RATE
Graph - This graph compares Queensland's and Australia's participation rate between 1991-92 and 2001-02.

Source: Labour Force, Australia, Detailed - Electronic Delivery, Monthly (cat. no. 6291.0.55.001)


PROPORTION OF THE POPULATION AGED 15 YEARS OR MORE (click here for definition)
Between 1991-92 and 2001-02, the proportion of the population aged 15 years or more in Queensland rose from 76.8% to 78.5%, an annual average growth of 0.2%. Australia's annual average growth was also 0.2% between 1991-92 and 2001-02. Australia's proportion of the population aged 15 years or more has been greater than Queensland's in every year between 1991-92 and 2001-02. An increase in the proportion of Queensland's population aged 15 years or more partly contributed to Queensland's economic growth per person between 1991-92 and 2001-02.

This change is consistent with the pattern of structural population ageing in Australia. The trend towards an ageing population may constrain future economic growth and may lead to a greater number of workers retiring reducing growth in the labour force.

Refer to The Ageing Population in Queensland article and the ABS theme page on ageing for further information regarding the ageing population.

PROPORTION OF THE POPULATION AGED 15 YEARS OR MORE
Graph - This graph compares Queensland's and Australia's ratio of population aged 15 years and over to the total population between 1991-92 and 2001-02.

Source: Labour Force, Australia, Detailed - Electronic Delivery, Monthly (cat. no. 6291.0.55.001); Population by Age and Sex, Australian States and Territories (cat. no. 3201.0)


CONCLUSION

The analysis used in this article is summarised below. The summary compares components of economic growth for Queensland and Australia as well as the resulting economic growth per person between 1991-92 and 2001-02.

Queensland's growth in real GSP per person between 1991-92 and 2001-02 was 2.9% on average each year. This was 0.2 percentage points higher than Australia's growth in real GDP per person.

Of the five components which contribute to real GSP per person, the largest contributor to Queensland's growth in real GSP per person between 1991-92 and 2001-02 has been the improvement in labour productivity. This growth in labour productivity may reflect improvements in labour efficiency, capital and technology. These improvements meant that Queensland was able to produce more outputs (GSP) per person.

The combined labour force composition changes have contributed significantly to Queensland's economic growth between 1991-92 and 2001-02. Possible changes that led to increases in economic growth per person include the growth in the employment rate, an increase in the number of women participating in the workforce and an increase in growth of the proportion of the population aged 15 years or more. The effect of these changes on economic growth was suppressed by the fall in the hours worked by each person in Queensland.

However, there are influences which may constrain the future growth of labour and capital. Notably, demographic trends such as the ageing population which, could possibly slow labour force growth. This combined with a higher proportion of people not contributing to the labour force may reduce national saving which could restrain growth in consumption and investment expenditure.


QUEENSLAND COMPARED WITH AUSTRALIA

AVERAGE ANNUAL GROWTH RATE, JUNE 1991-92 TO JUNE 2001-02
+
+
+
+
=
Graph - This graph compares Queensland's and Australia's labour productivity between 1991-92 and 2001-02.
Graph - This graph compares Queensland's and Australia's average hours worked between 1991-92 and 2001-02.
Graph - This graph compares Queensland's and Australia's employment rate between 1991-92 and 2001-02.
Graph - This graph compares Queensland's and Australia's participation rate between 1991-92 and 2001-02.
Graph - This graph compares Queensland's and Australia's ratio of population aged 15 years and over to the total population between 1991-92 and 2001-02.
Graph - This graph compares Queensland and Australia's real GSP per person between 1991-92 and 2001-02
QUEENSLAND
2.5%
-0.3%
0.2%
0.3%
0.2%
2.9%
AUSTRALIA
2.2%
-0.2%
0.4%
0.1%
0.2%
2.7%

AVERAGE ANNUAL GROWTH RATE, JUNE 1991-92 TO JUNE 2001-02

Queensland
Australia

Component
%
%

Labour Productivity
2.5
2.2
Average Hours Worked
-0.3
-0.2
Employment Rate
0.2
0.4
Participation Rate
0.3
0.1
Ratio of Population aged 15 years and over and Total population
0.2
0.2
Real GSP(a)/GDP(b) Per Person
2.9
2.7

(a) Based on GSP, chain volume estimates, experimental series. See endnote 1.
(b) Based on GDP, chain volume estimates.




ENDNOTES

1. Based on GSP, chain volume estimates, experimental series. Users are cautioned that these estimates are derived indirectly by calculating a deflator from the expenditure components of the state series concerned. Therefore, in general, the sum of the state estimates does not equal the estimates for Australia. It is emphasised that, at times, there may be movements that cannot be fully explained in the chain volume estimates of GSP through the use of this proxy deflator. Reference year for chain volume measures is 2000-01.

2. The estimates contained in this the 2002-03 National Accounts: State Accounts (cat no. 5220.0) issue are based on annual supply and use benchmarks for Australia as published in the 2002–03 issue of Australian System of National Accounts (cat. no. 5204.0). They incorporate new and revised estimates from the annual supply and use tables for 1999–00, 2000–01 and 2001–02, and from other sources which normally become available by this time each year. The revised annual supply and use tables contain revisions to the contributions of each industry. The most significant revision is to Agricultural value added following a review of compilation methods. All states are affected by this revision. Although the supply and use table revisions have not had a significant impact on the aggregate GDP movements for Australia, because the structure of economic activity varies across states there are revisions to GSP for each state in response to the industry changes at the Australia levels.



LINKS


RELATED QUEENSLAND INFORMATION


Key Statistics

Labour Force Status at June 2002

Unemployment to June 2002

Labour Force Participation Rate to June 2002


RELATED PUBLICATIONS AND PRODUCTS

Australian National Accounts, State Accounts (cat. no. 5220.0) Annual Publication.

Labour Force Australia (cat. no. 6202.0).

Average Weekly Earnings, Australia (cat. no. 6302.0)


NON- ABS SOURCES OF INFORMATION

Office of Economic and Statistical Research

Queensland Government, Treasury


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