The Australian Bureau of Statistics (ABS) on Friday released data on muti-factor productivity (MFP) growth across Australia, which is used to measure “the efficiency with which combined labour and capital inputs are transformed into outputs”, and is commonly regarded as the most effective measure of productivity in an economy.
According to the ABS, Australia’s MFP “fell 0.1% in 2013-14 as total inputs of 2.5% outpaced gross value added of 2.3%”. However, “on a quality adjusted hours worked basis, labour productivity (LP) grew 1.3% in 2013-14” reflecting “a positive contribution from changes to labour composition, due to educational attainment and work experience” (see next chart).
