5260.0.55.002 - Experimental Estimates of Industry Multifactor Productivity, 2009-10  
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 07/12/2010   
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This data cube provides experimental estimates of multifactor productivity (MFP) for individual industries in the Australian economy. The methodology for constructing the data is outlined in the ABS Information Paper: Experimental Estimates of Industry Multifactor Productivity, 2007 (cat. no. 5260.0.55.001). The ABS publishes industry level MFP estimates on an annual basis. This is the fourth update of the ABS industry MFP data cube.

This data cube includes measures of input, output and MFP at the industry level from 1985-86 onwards for 12 industries, with the remaining market sector industries commencing in 1994-95. It goes beneath the aggregate economy to measure the productivity of individual industries. The 16 industries included in the data cube are as follows:

Division Industry
A Agriculture, Forestry and Fishing
B Mining
C Manufacturing
D Electricity, Gas, Water and Waste Services
E Construction
F Wholesale Trade
G Retail Trade
H Accommodation and Food Services
I Transport, Postal and Warehousing
J Information, Media and Telecommunications
K Financial and Insurance Services
L Rental, Hiring and Real Estate Services
M Professional, Scientific and Technical Services
N Administrative and Support Services
R Arts and Recreation Services
S Other Services

Changes in this data cube

The key change in this data cube is the inclusion of estimates for four additional services industries that have been incorporated in the expanded definition of the market sector (see above, ANZSIC06 Divisions A to N and Divisions R and S):

    1. L Rental, hiring and real estate services;
    2. M Professional, scientific and technical services;
    3. N Administrative and support services; and
    4. S Other services.
To assist data users to link these industry level estimates to those reported for the aggregate economy in the Australian System of National Accounts (ASNA), this data cube also includes the following two aggregate MFP measures:
    1. A time series for the expanded market sector definition dating back to 1994-95;
    2. A longer time series produced for the group of 12 selected ANZSIC06 industries closest to the previous market sector definition (Divisions A to K and R).
The market sector MFP aggregate for the expanded definition of 16 market sector industries was introduced into the 2009-10 issue of the Australian System of National Accounts. The MFP indicators published in the ASNA now align with the scope of other market sector indicators (such as GDP market sector and hours worked market sector) reported in the key national accounts aggregates. The new market sector aggregates replaced the aggregates for 12 selected industries in the ASNA.

The MFP series for the 12 selected industries is useful for analysing economy-wide productivity performance from the perspective of a longer time series. The ABS has discontinued the publication of this series in the Australian System of National Accounts but will make it available in this data cube for the foreseeable future.

Current research priorities

The industry level productivity measures in this data cube are experimental. There are a number of outstanding conceptual and other measurement challenges associated with the measurement of industry MFP statistics. In its submissions to the Inquiry into raising the level of productivity growth in the Australian Economy the ABS outlines the major measurement and data issues for ABS MFP statistics.

Addressing industry puzzles

A number of measurement and data issues have been raised since the first release of ABS industry-level MFP estimates. In particular, the measured productivity decline for two industries (Mining and Electricity, Gas, Water & Waste Services) has attracted the attention of data users and has subsequently become the focus of further research for the ABS. Over the past year, significant progress has been made in explaining productivity puzzles for the Mining industry. Three factors have been found to contribute to the productivity decline for the Mining Industry: (1) deteriorating quality of natural resource inputs, (2) lengthy time lags between the commencement of mining capital projects and formation of productive capacity; and (3) the entrance of less experienced workers into the mining industry. Detailed findings of this research will be released in 2011.

New challenges in measuring services industries productivity

Previous releases of this data cube have highlighted that industry level estimates of MFP are regarded as experimental. As such, the estimates for the four new industries in this data cube should be interpreted with care, particularly with regard to short term movements in the series. Statistical agencies and others involved in this field are still gaining experience in the compilation of industry level productivity statistics.

International experience demonstrates that there are additional conceptual and data issues surrounding productivity measurement for services industries. Services industries lend themselves to a range of additional measurement complexities. One general measurement issue relates to constructing price indices, such that volume indicators adequately reflect quality change over time.

The measurement of capital services arguably is one of the most challenging areas in compiling MFP statistics. Capital stock measures and associated capital services measures are constructed based on several important assumptions. By relying on these assumptions, a series of heterogenous capital goods, some with rapidly changing technical characteristics, are aggregated into an overall capital stock measure. An associated volume of capital services is then estimated. In particular, some of the new services industries introduced into the expanded definition of the market sector are characterised by very rapid rates of growth in capital services that imply significant declines in measured productivity throughout the measurement period.

The ABS is committed to on-going research to address these measurement challenges, and welcomes user feedback and comments on the results for divisions L, M, N and S with the view to improving these measures for future releases.

List of tables

1 Gross value added based multifactor productivity (GVA MFP) indexes
2 Productivity measures - Market sector industries aggregate (MFP16)
3 Productivity growth cycles - Market sector industries aggregate (CYCLES MFP16)
4 Productivity measures - Selected industries aggregate (MFP12)
5 Productivity growth cycles - Selected industries aggregate (CYCLES MFP12)
6 Labour productivity (LP) indexes
7 Capital productivity (CP) indexes
8 Gross value added (GVA) chain volume indexes
9 Hours worked (HW) indexes
10 Capital services (CS) indexes
11 Combined inputs capital and labour (KL) indexes
12 Productive capital stock (PCS) chain volume measures reference year is 2008-09 - Incorporated and unincorporated
13 Capital rental price (CRP) $cost per unit of 2008-09 capital - Incorporated and unincorporated
14 Income shares for value added based estimates of MFP (ISVA)
15 Gross output based MFP (GO MFP) indexes
16 Gross output (GO) indexes
17 Combined inputs (CI) (labour, capital and intermediate inputs) indexes
18 Intermediate inputs (II) indexes
19 Income shares for gross output based estimates of MFP (ISGO)

More information is available from the ABS website


For further information about these and related statistics, contact the National Information and Referral Service on 1300 135 070 or Derek Burnell on (02) 6252 6427.