5260.0.55.001 - Information paper: Experimental Estimates of Industry Multifactor Productivity, 2007  
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 07/09/2007  First Issue
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PRODUCTIVITY

Over the period 1985-86 to 1997-98 there was strong growth in multifactor productivity (MFP) on a value added basis (figure 6.1). However, since 1997-98 MFP growth has been negative. Despite this fall, value added based MFP growth averaged 1.4% per year between 1985-86 and 2005-06, which was higher than the market sector average of 1.2% per year. Figure 6.1 also shows strong growth in labour productivity and capital productivity up until 1997-98, although capital productivity increases were more moderate.


The gross output based MFP measure for the period 1994-95 to 2004-05 is also highlighted in figure 6.1. The figure shows gross output based MFP declining more slowly than value added based MFP.

6.1 Electricity, gas & water MFP, labour productivity and capital productivity, (2004-05 = 100)
Graph: 6.1 Electricity, gas & water MFP, labour productivity and capital productivity, (2004-05 = 100)



Figure 6.2 presents labour productivity for the three subdivisions between 1985-86 and 2005-06. Labour productivity grew strongly in the Electricity industry up until 1997-98. However, since then it has declined due to slower output growth and the faster growth in hours worked footnote 1.


Water, sewerage and drainage labour productivity increased strongly during the 1990s, then declined from 2000-01. Gas industry labour productivity trended upward up until the late 1990s, although with some volatility. The recent fall in productivity for the Gas industry was due to a large increase in hours worked relative to the change in value added.

6.2 Electricity, gas & water labour productivity, (2004-05 = 100)
Graph: 6.2 Electricity, gas & water  labour productivity, (2004-05 = 100)



1 The Energy Reform Implementation Group (ERIG 2007) also shows declines in labour productivity for electricity generation in NSW and Victoria, these two states have large electricity generation with output shares of 33% and 26% respectively. NSW also experienced declines in labour productivity for transmission.back



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