Changes in the number of hours worked can provide an 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 1999-2000 and 2000-01, as well as the average rate of change over the period from 1992-93 to 2000-01.
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, and indexes of their labour productivity, are shown in the table.
The average increase in labour productivity across all industries in the market sector (including Health and community services) between 1999-2000 and 2000-01 was almost negligible, while over the period from 1992-93 to 2000-01 the average annual increase was 1.8%. The Mining (up 5.7%) and Electricity, gas and water industries (up 5.6%) showed the largest annual increases over the period 1992-93 to 2000-01.
Gross product per hour worked increased most markedly during 2000-01 in the Cultural and recreational services industry (up 10.6%) and the Mining industry (up 7.6%).
Labour productivity in the Electricity, gas and water supply industry increased on average by 5.6% per year over the period from 1992-93 to 2000-01; this industry's average increase in gross value added over the same period was 2.3%, hours worked fell by an annual average of 3.1%, and wages fell by an average of 3.0% per year over this period. The Mining industry experienced growth in labour productivity of 5.7% per year over the period from 1992-93 to 2000-01; this industry's average increase in gross value added over the same period was 4.7%, hours worked fell by an annual average of 0.9%, while wages increased at an average rate of 3.3% per year over this period.
As indicated in the table, in 2000-01 Construction showed the largest decrease in labour productivity of 14.6%, while over the period from 1992-93 to 2000-01 labour productivity fell at an annual rate of 1.0%. Labour productivity in 2000-01 decreased because the growth in the chain volume estimates of gross value added (down 17.6%) was less than the growth in hours worked (down 3.5%).
In contrast, labour productivity in the Wholesale trade industry increased by an average of 5.2% per year over the period 1992-93 to 2000-01, because gross value added grew at a faster rate (5.7% per year) than hours worked (0.5% 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
Change from 1999-2000
Average annual rate of
growth 1992-93 to 2000-01
|Agriculture, forestry and fishing|
|Electricity, gas and water supply|
|Accommodation, cafes and restaurants|
|Transport and storage|
|Finance and insurance|
|Health and community services|
|Cultural and recreational services|
|(a) Reference year for chain volume measures is 1999-2000 = 100.0.|
Source: Australian System of National Accounts, 2000-01 (5204.0).