How does New Zealand’s productivity performance compare with that of Australia?
Table 4 compares productivity growth in New Zealand’s current measured sector with Australia’s productivity series (known as MFP16). It does not compare the levels of productivity. In 2007, New Zealand’s measured sector covered approximately 80 percent of the economy while the Australian MFP16 series covered approximately 77 percent of the economy.
Table 4
Australia’s MFP16 and New Zealand’s current measured sector
Average annual growth rates: 1996–2011 |
| Variable |
Australia (%) |
New Zealand (%) |
| Output |
3.5 |
2.5 |
| Labour productivity |
2.0 |
1.4 |
| Capital productivity |
-1.6 |
-0.4 |
| Multifactor productivity |
0.4 |
0.6 |
| Labour input |
1.5 |
1.1 |
| Capital input |
5.3 |
2.9 |
| Total inputs |
3.1 |
1.9 |
| Capital-to-labour ratio |
3.7 |
1.8 |
In making this comparison, note that:
- the Australian data is based on a June year while the New Zealand data is based on a March year
- New Zealand’s measured sector is based on ANZSIC96 while the Australian MFP16 series is based on ANZSIC06
- the Australian Bureau of Statistics (ABS) exclude private landlords but they are included in the Statistics NZ series
- the ABS allocate financial intermediation services indirectly measured (FISIM) to industries while Statistics NZ do not.
What does the OECD have to say about New Zealand's productivity?
The OECD’s estimates cover the entire economy, not just the measured sector. Therefore, these estimates include industries for which the input and output measures are not independent. In addition, the OECD’s estimates are based on December rather than March years. The OECD’s labour productivity data is available from OECD.stats extracts.
For example, the OECD estimated that New Zealand’s labour productivity growth for the total economy for the year to December 2010 was 0.5 percent. The Statistics NZ estimate for the year to March 2011 is lower, at -0.1 percent. Between the 1977 and 2010 December years, average growth in total economy labour productivity was 1.4 percent according to the OECD. The equivalent Statistics NZ estimate for the measured sector is 1.9 percent.
The OECD estimates that multifactor productivity for the December 2010 year was 0.4 percent while Statistics NZ’s equivalent estimate for the March 2011 year is 0.0 percent. The OECD estimate for average multifactor growth between December 1984 and 2010 is 0.7 percent. The equivalent Statistics NZ figure for the March 1985 to 2011 years is 0.9 percent.
What are the differences between the OECD and Statistics NZ productivity series?
They differ in their coverage of industries. The OECD series is for the total economy, and therefore includes the non-measured sector. There are also important methodological differences. For example, the OECD’s labour hours series is based solely on data from the Household Labour Force Survey (HLFS) whereas the Statistics NZ series uses Linked Employer-Employee Data (LEED), the Business Demography Database (BDD), and the Quarterly Employment Survey (QES) as well as the HLFS.
Can I compare these numbers with those of other countries?
Yes, however, you will need to review the industries covered by the country you are looking at. Some countries measure the total economy, while others only measure certain parts of the economy. For example, the US’s productivity statistics cover the non-farm business sector while the UK’s figures reflect the whole economy. The most valid comparison is between the former measured sector and Australia’s MFP12 series due to the use of the same industrial classification.