Output and labour input both rise but productivity declines slightly

Labour productivity decreased 0.1 percent in the March 2011 year, Statistics New Zealand said today. This results from labour input growth of 0.9 percent and output growth of 0.8 percent. The expansion in labour input was due to an increase in the number of hours worked.

"The stronger growth in labour input compared with output led to a small decrease in labour productivity growth", productivity statistics manager Peter Gardiner said. Growth in labour input was positive for the first time since 2008, and follows a decline of 4.8 percent in the March 2010 year.

In the March 2011 year, the growth in multifactor productivity (MFP) was flat. This was due to growth in output matching growth in capital and labour combined inputs. MFP is a measure of the efficiency of producing goods and services in the economy.

Productivity is regarded as key to increasing New Zealand's standard of living. Productivity statistics cover approximately 80 percent of the total economy and exclude government administration and defence, health, and education.