Changes in the number of hours worked provide another indicator of the level of economic activity of an industry. A developing or buoyant industry will generally show an increase in the number of hours worked over time. However, rapid growth in labour productivity within an industry may be associated with a decline in hours worked. A general indication of such effects is provided in table 13.5, which shows the changes in labour productivity (measured here as chain volume gross product per hour worked) experienced by each industry between 1998-99 and 1999-2000, as well as the average rate of change over the period from 1991-92 to 1999-2000.
For some industries, principally those dominated by the public sector, the growth in the volume of output is derived using indicators of labour input because of a lack of suitable output indicators. Therefore, for these industries there are no meaningful measures of labour productivity growth. The remaining industries are known collectively as the market sector, and indexes of their labour productivity are shown in the table.
The average increase in labour productivity across all industries in the market sector between 1998-99 and 1999-2000 was 1%, while over the period from 1991-92 to 1999-2000 the average annual increase was 2%. Communication services showed the largest annual increase over the period 1991-92 to 1999-2000 of 8%.
Gross product per hour worked increased most markedly for 1999-2000 in the Mining industry (17%), with an average annual increase in labour productivity of 5% over the period from 1991-92 to 1999-2000. In 1999-2000 the index of gross product per hour worked also showed significant increases in Finance and insurance (8%).
Labour productivity in the Electricity, gas and water supply industry increased on average by 7% per year over the period from 1991-92 to 1999-2000; this industry's average increase in gross value added over the same period was 2%, hours worked fell by an annual average of 5%, and wages fell an average of 4% per year over this period. The Mining industry experienced growth in labour productivity of 5% per year over the period from 1991-92 to 1999-2000; this industry's average increase in gross value added over the same period was 4%, hours worked fell by an annual average of 1%, while wages increased at an average rate of 3% per year over this period.
As indicated in the table, in 1999-2000 Construction showed the largest decrease in labour productivity of 8%. However over the period from 1991-92 to 1999-2000 labour productivity increased at an annual rate of 1%. In 1999-2000 labour productivity decreased for this industry because the growth in the chain volume estimates of gross value added (2%) was less than the growth in hours worked (11%).
In contrast, labour productivity in the Communication services industry increased by an average of 8% per year over the period 1991-92 to 1999-2000, because gross value added grew faster (11% per year) than hours worked (3% per year).
These measures of labour productivity should be treated with care. Changes in the composition of labour, which are not captured in the hours worked measure, can affect output, which can also be affected by changes in inputs other than labour (e.g. capital). Finally, the extent to which the capacity of inputs is used can affect output per hour worked; for example, there will be an apparent increase in productivity when an input that was previously not fully used becomes fully used.
13.5 INDEXES OF GROSS PRODUCT(a) PER HOUR WORKED, By Industry(b)
Change from 1998-99
Average annual rate of growth
1991-92 to 1999-2000
|Agriculture, forestry and fishing |
|Electricity, gas and water supply |
|Wholesale trade |
|Retail trade |
|Accommodation, cafes and restaurants |
|Transport and storage |
|Communication services |
|Finance and insurance |
|Cultural and recreational services |
|All industries |
|(a) Reference year for chain volume measures is 1998-99 = 100.|
(b) Estimates presented in this table relate only to industries in the market sector.
Source: Australian System of National Accounts, 1999-00 (5204.0).