The ABS has releasedEstimates of Industry Multifactor Productivity for 2018-19, which reveals that multi-factor productivity (MFP) – the driver of living standards – declined by 0.4% in 2018-19:
On an hours worked basis, market sector multifactor productivity (MFP) fell 0.4% in 2018–19, the first decline since 2010–11. Market sector gross value added (GVA) grew 1.3%, the slowest output growth recorded for the market sector. By comparison, combined labour and capital inputs grew 1.6%, reflecting capital services growth of 1.8% and hours worked growth of 1.5%. Labour productivity fell 0.2% in 2018–19, the first recorded negative for the sixteen industry market sector aggregate (since the beginning of the time series in 1994–95).
On a quality adjusted hours worked basis, MFP fell 0.7% and labour productivity fell 0.8%. The weaker growth on this basis reflects a contribution from changes to labour composition, due to educational attainment and work experience…
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Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
