The KLEMS framework provides a detailed statistical decomposition on the contributions to output growth, represented by five input categories - capital (K), labour (L), energy (E), materials (M), and services (S). This allows for analysis on the changes to the input mix, such as the role of labour hours and composition of relative capital services or intermediate inputs, observed in industry output growth.
In 2021-22, KLEMS MFP grew, on quality adjusted hours worked basis, in ten of the sixteen market sector industries.
- The reported percentage changes are based on natural log growth x 100
Agriculture, forestry and fishing
Agriculture, forestry and fishing posted the strongest rise in KLEMS MFP (5.8%) across the sixteen market sector industries, marking the second year of consecutive productivity growth. The strength in MFP reflects increased agricultural production and subdued usage of key farm inputs amid elevated energy and agricultural labour costs. The strength in gross output (4.7%) was underpinned by the growth of the agriculture subdivision due to favourable weather conditions across most of Australia, softened somewhat by flooding in parts of New South Wales and Queensland. The volume of intermediate inputs was constrained by higher prices of key inputs such as fertiliser, petrol and services to agriculture. As a result, intermediate inputs detracted 1.5 ppts from gross output growth.
Information, media and telecommunications
Information, media and telecommunications saw a strong KLEMS MFP result, rising 4.1% following a 1.0% fall in 2020-21. This was the strongest growth in this industry since 1995-96. Output grew at 7.4% which was faster than the increase in intermediate inputs. The strength in output was due to increased demand for software publishing, motion picture production and theatre services. Intermediate inputs grew at a slower pace reflecting partial cost offsets from the provision of telecommunication services through established infrastructure and an improved fibre optic network.
Transport, postal and warehousing
Transport, postal and warehousing showed significant improvement in KLEMS MFP, following a large fall in 2020-21 due to border closures and travel restrictions. KLEMS MFP rose by 3.0% due a strong recovery in gross output (11.0%) outweighing the rise in intermediate inputs (+6.6 ppts). The productivity recovery reflects an improvement in flight capacity utilisation after the gradual relaxation of COVID-19 related travel restrictions. Airlines serviced much larger passenger loads and increased flights towards longer, more expensive routes without incurring similar growth in associated costs, such as fuel, aircraft repair and maintenance, and airport operations.
Mining recorded the largest fall (2.2%) in KLEMS MFP due to disruptions to coal and iron ore production caused by flooding of mines, COVID-19 related absenteeism and labour shortages. Gross output recorded a small rise (0.2%), reversing the strong fall of 3.1% in 2020-21. The increase in output was driven by strength in oil and gas mining, offset by the weaker production in iron ore and coal mining which was impacted by wet weather and mine flooding. Among intermediate inputs, Services grew strongly reflecting additional cleanup, repairs and maintenance at flooded mine sites, as well the resumption of heavy maintenance and construction activities after COVID-19 lockdowns. Capital and labour services also recorded growth, contributing 0.8 ppts and 0.2 ppts to output growth, respectively.
|Industry||Gross Output Growth||Capital Services||Labour Services (b)||Energy||Materials||Services||KLEMS MFP (c)|
|Agriculture, forestry and fishing||4.7||-0.3||0.6||-0.1||0.6||-2.0||5.8|
|Electricity, gas, water and waste services||4.9||0.6||0.2||0.2||0.3||3.7||0.0|
|Accommodation and food services||3.1||0.1||-3.3||0.0||0.1||2.3||3.9|
|Transport, postal and warehousing||11.0||0.5||0.8||0.6||0.0||6.1||3.0|
|Information, media and telecommunications||7.4||0.7||-0.2||0.1||0.0||2.6||4.1|
|Financial and insurance services||4.5||0.1||0.6||0.0||0.0||2.2||1.6|
|Rental hiring and real estate services||6.4||0.9||1.2||0.2||0.0||3.4||0.7|
|Professional, scientific and technical services||6.7||0.6||-0.2||0.1||0.0||2.4||3.9|
|Administrative and support services||10.9||0.1||4.7||0.0||0.1||3.8||2.1|
|Arts and recreation services||10.5||0.4||0.4||0.1||0.8||5.2||3.7|
- The reported percentage changes are based on natural log growth x 100.
- Quality adjusted hours worked basis.
- Gross output-based MFP, quality adjusted hours worked basis.