PRODUCTIVITY

During the decade 1997-98 to 2007-08, Australia experienced improved productivity growth, and multifactor productivity rose by 0.8% per year on average (Endnote 2).

ABOUT THIS INDICATOR

A nation's productivity is the volume of goods and services it produces (its output) for a given volume of inputs (such as labour and capital). A nation that achieves productivity growth produces more goods and services from its labour, capital, land, energy and other resources. Much, but not all, of Australia's output growth can be accounted for by increases in the inputs to production. The amount by which output growth exceeds input growth is the productivity improvement. Productivity growth can generate higher income and benefits might also accrue in the form of lower consumer prices.

Productivity can be measured in a variety of ways. The most comprehensive Australian measure available at present is multifactor productivity for the market sector. Multifactor productivity represents that part of the growth in output that cannot be explained by growth in labour and capital inputs. Examples of multifactor productivity growth include improved production techniques, better management practices, and organisational change. Technological change, such as increased computing power, is embodied in the asset, and as such is captured in the capital inputs.

SEE ALSO

Productivity - Measures of Australia's Progress, 2006
Themes - National Accounts

ENDNOTES

1. Reference year for multifactor productivity index is 2006-07.

2. Australian Bureau of Statistics 2007, Australian System of National Accounts, 2007-08 (cat. no. 5204.0), ABS, Canberra.

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