Productivity Statistics: 1978-2023

Productivity is a measure of how efficiently capital and labour are used within the economy to produce outputs of goods and services. A higher productivity rate means a nation can either produce a higher level of goods and services with the same level of inputs or produce the same level of goods and services with a lower level of inputs. Labour productivity primarily takes the hours people work into account, whereas capital productivity only takes capital inputs, such as land, machinery, and equipment, into account.

Key facts

In the year ended March 2023:

  • labour productivity fell 0.9 percent
  • multifactor productivity fell 2.2 percent
  • capital productivity fell 3.8 percent.

These movements reflect levels of productivity relative to the year ended March 2022, which was impacted by the COVID-19 pandemic and associated response measures.

Impact of COVID-19 on productivity statistics provides more information.

Key aggregates for the measured sector

The measured sector represents those industries for which we are able to measure output independently from input, thereby allowing measurement of productivity. It includes most of the economy, but excludes some industries, mainly non-market industries.

For the measured sector, inputs rose at a higher rate compared with outputs in the year ended March 2023, resulting in decreases in both labour and multifactor productivity.

Labour productivity fell 0.9 percent. Labour productivity captures how output relates to changes in labour inputs. A 3.4 percent increase in labour inputs over the year contributed to a 2.5 percent rise in output.

Multifactor productivity fell 2.2 percent over the year ended March 2023. This measure takes both labour and capital inputs into consideration. This can be seen as productivity from a business point of view, as businesses combine both labour and capital inputs to produce outputs. The effects of unobserved inputs such as technological advances, efficiency gains, and economies of scale are captured by multifactor productivity.

Capital productivity fell 3.8 percent, reflecting higher rises in capital inputs compared with output. Capital productivity captures how output growth relates to capital input growth. Capital inputs include land, machinery, and equipment.

For the March years 2020, 2021, and 2022 we adjusted capital inputs due to presumed declines in capacity utilisation as a result of COVID-19 and associated response measures. These adjustments have lowered capital input indexes and increased multifactor and capital productivity during that period. Please note that there is a degree of uncertainty in estimating the decline in capacity utilisation of capital which should be considered when using these indexes.

Although no capital input adjustments were made in the year ended March 2023, the adjustments made in year ended March 2022 have the effect of increasing estimated growth in capital inputs in the year ended March 2023. This has a corresponding effect of decreasing growth in multifactor productivity and capital productivity.

Productivity growth cycles

Productivity statistics are also analysed across growth cycles. A growth cycle is the span of years between adjacent peaks in economic growth, as determined by statistical techniques.

Productivity is best analysed over these growth cycles, as annual movements can be volatile and do not always represent true changes to the underlying production function. The benefit of showing productivity data in cycles is to better account for factors that can vary within a cycle but for which we lack explicit measures, such as capacity utilisation.

Capacity utilisation is the difference between the potential and actual use of an input and is high during times of strong economic growth. In times of economic decline, or due to economic shocks, resources may become underutilised.

This approach also limits the impact of annual volatility by calculating average annual movements over a longer period, rather than for single years in isolation.

New Zealand's most recent productivity growth cycle began in 2008. This cycle was abruptly disrupted by the impacts of COVID-19 in the year ended March 2020. This release presents results for the 2008-2019 (pre COVID-19) cycle, as well as the short 2019-2023 period. As more data becomes available in future years, we will continue to review the most suitable way to present long-term productivity growth through the COVID-affected period.

The table below shows average annual growth rates across different growth cycles and the latest financial year.

Key aggregates for the measured sector(1)(2)

Variable

Growth cycle

Latest
annual

Full measured
sector time series

Time period

1997-
2000(2)

2000-
2008(2)

2008
-2019(2)

2019
-2023(2)(3)

2023(4)

1996-2023(2)

Percent

Output

Value added

2.9

3.5

2.1

1.9

2.5

2.7

Labour

Labour input

0.1

2.1

1.2

1.7

3.4

1.5

Labour productivity

2.8

1.3

0.9

0.2

-0.9

1.2

Capital

Capital input

2.4

3.9

2.3

3.2

6.6

3.0

Capital productivity

0.4

-0.4

-0.1

-1.2

-3.8

-0.3

Multifactor

Total inputs

1.1

2.9

1.7

2.4

4.9

2.1

Multifactor productivity

1.8

0.6

0.5

-0.4

-2.2

0.5

1. The measured sector series begins in 1996.

2. Average annual growth rates, year ended March.

3. Represents COVID-19-affected period.

4. Annual growth rate, year ended March.

Source: Stats NZ

Size of the measured sector

In theory, productivity measures should cover all industries in the economy. The industry coverage of these statistics includes only the 'measured sector' - mainly market industries rather than non-market industries like education and healthcare. The measured sector covers approximately three-quarters of the total industry contribution to New Zealand's gross domestic product (GDP).

  • Primary industries accounted for 9.4 percent of measured sector output and 7.0 percent of total industry contribution to GDP in 2022.
  • Goods-producing industries made up 26.5 percent of measured sector output and 19.9 percent of industry contribution to GDP in 2022.
  • Measured-sector service industries comprised 64.2 percent of measured sector output and 48.3 percent of industry contribution to GDP in 2022.

Labour productivity by industry

In the year ended March 2023, New Zealand workers in the measured sector produced the equivalent of 137.3 goods and services per hour, compared with 100 in 1996, when the measured sector series began.

Compared with 100 in 1996, in 2023:

  • primary industries workers produced 161.1 goods and services per hour
  • measured-sector service industries workers produced 147.1 goods and services per hour
  • goods-producing industries workers produced 113.6 goods and services per hour.
YearMeasured sectorPrimary industriesGoods-producing industriesService industries
19961000100010001000
1997101811531015998
19981040120110611005
19991054116510701029
20001108113811151099
20011123113211171124
20021137109811101161
20031155111911531168
20041172122511601177
20051191124211611207
20061209134011571228
20071216131411591242
20081230135911691255
20091213145711191233
20101259151911891263
20111262138812041281
20121284149412041299
20131297154012151309
20141306150412031334
20151322157412031351
20161341161712261367
20171347162612291376
20181358156812391396
20191361163012291400
20201375160712341425
20211372159012301422
20221385152312041466
20231373161111361471

Over the year ended March 2023, labour productivity in both measured-sector service and primary industries rose, up 0.4 percent and 5.8 percent respectively. Labour productivity in goods-producing industries declined 5.6 percent over the same period.

The graph below shows the changes in labour productivity and multifactor productivity growth rates across the different measured sector industries.

IndustryMultifactor productivity (%)Labour productivity (%)
"Agriculture4.87.8
forestry and fishing"-7.8-11.9
Mining-8.1-9.4
Manufacturing-4.5-6.4
"Electricity-3.7-1.7
gas-2.85.4
water and waste services"-7.2-6
Construction22.4
Wholesale trade1.7-0.6
Retail trade-0.3-2.2
Accommodation and food services-0.51.4
"Transport-7.30.7
postal and warehousing"0.51.7
"Information9.29.9
media and telecommunications"7.78.1
Financial and insurance services-1.5-1.1
"Rental-2.2-0.9
hiring and real estate servies"
"Professional
scientific and technical services"
Administrative and support services
Arts and recreation services
Other services
Market sector

Productivity growth between industries varied significantly for the year ended March 2023, with falls in some industries offset by rises in others. This reflects the different industry-level impacts of COVID-19 on both inputs and output over this period, as well as underlying differences between industries and changes in unobserved factors between years. Some industries experienced larger variation in their inputs and output in the years ended March 2022 and March 2023 compared with previous years. A few such industries are highlighted below.

Select industry summaries for the year ended March 2023

Manufacturing:

  • labour productivity fell 9.4 percent
  • output fell 6.8 percent
  • labour inputs rose 2.8 percent.

The fall in labour productivity was driven by a fall in output. The closure of the Marsden Point oil refinery has resulted in falls in output of the petroleum, chemical, polymer, and rubber product manufacturing subindustry.

YearValue added (output) (%)Labour input (%)
19960.63.6
19971.6-0.2
19980.2-4.3
1999-2.7-4.5
20004.40
20012.61.5
20021.31.4
20038.73.8
20042.61
20053.21.7
20060.9-1.5
2007-3-1
20081.1-0.5
2009-8.5-3.9
2010-4.2-7.8
20111.9-0.3
2012-0.3-1.2
20131.30.3
201411.2
20152.23.1
20162.30.8
20172.41.3
20182.10.8
20192.42.3
2020-0.8-0.1
2021-2.5-4
20222.6-0.3
2023-6.82.8
YearLabour productivity (%)
1996-2.9
19971.8
19984.8
19991.8
20004.4
20011.1
2002-0.1
20034.8
20041.5
20051.5
20062.4
2007-2
20081.6
2009-4.8
20103.9
20112.2
20120.9
20131
2014-0.2
2015-0.9
20161.5
20171.2
20181.2
20190.1
2020-0.7
20211.5
20222.9
2023-9.4

Retail trade:

  • labour productivity fell 6.0 percent
  • output fell 3.0 percent
  • labour inputs rose 3.2 percent.

The fall in labour productivity was driven by a fall in output and a rise in labour inputs.

YearValue added (output) (%)Labour input (%)
19963.32.2
19972.9-0.5
19982.52.1
19990.72.6
20006.6-3
20011.81.4
20023.82.2
20034.94.3
20046.22.8
200572.4
20065.21.3
20075.21.4
20082.41.2
2009-4.6-1.4
2010-0.2-2.6
201120.6
20124.20.5
201340.2
20144.41.7
20155-0.5
20165.51.5
20175.43.2
20184.61.1
20195.12.2
20204.3-0.3
20214.4-1.8
20227.6-0.3
2023-33.2
YearLabour productivity (%)
19961
19973.5
19980.4
1999-1.8
20009.9
20010.4
20021.6
20030.6
20043.3
20054.5
20063.9
20073.7
20081.2
2009-3.3
20102.5
20111.4
20123.6
20133.7
20142.7
20155.6
20164
20172.1
20183.5
20192.9
20204.7
20216.2
20227.9
2023-6

Accommodation and food services:

  • labour productivity rose 2.4 percent
  • output rose 11.1 percent
  • labour inputs rose 8.5 percent.

The rise in labour productivity was driven by a rise in output.

YearValue added (output) (%)Labour input (%)
19964.68
1997-0.34.6
199801.8
1999-12.6
200052.5
20011.12.1
20023.46.7
20034.43.6
200422
20054.7-1.2
20063.62.8
20074.22.7
20080.62.8
2009-3-3.7
20100.61
20111.81.4
20123.32.9
20130.7-0.4
20143.95.4
201583.7
20165.14.8
20176.24.1
201865
20191.63.8
2020-2-1.7
2021-7.3-17
20226.3-1.4
202311.18.5
YearLabour productivity (%)
1996-3.2
1997-4.6
1998-1.7
1999-3.5
20002.5
2001-1
2002-3.2
20030.8
20040
20056
20060.8
20071.5
2008-2.1
20090.7
2010-0.4
20110.4
20120.4
20131.1
2014-1.4
20154.2
20160.4
20172
20180.9
2019-2.1
2020-0.2
202111.7
20227.8
20232.4

Transport, postal, and warehousing:

  • labour productivity fell 0.6 percent
  • output rose 10.3 percent
  • labour inputs rose 11.0 percent.

The fall in labour productivity was driven by a rise in labour inputs.

YearValue added (output) (%)Labour input (%)
1996113
199723
19980.30.4
19990.7-4.9
20005.22.6
20012.91.9
20024.61.5
20033.63.6
20043.12.5
20057.33.9
20062.50.5
2007-2.61.5
20083.7-1.9
2009-0.61.4
2010-2.9-4
201191.9
20121.70.8
20130.7-0.1
20142.1-0.6
20157.15.2
20165.12.5
20173.33.4
20183.65.8
20192.31.7
20200.10.7
2021-18.5-9.7
20226.4-0.1
202310.311
YearLabour productivity (%)
19967.8
1997-1
19980
19995.8
20002.6
20011
20023.1
20030
20040.6
20053.3
20062
2007-4
20085.7
2009-1.9
20101.2
20116.9
20120.9
20130.8
20142.7
20151.8
20162.5
2017-0.1
2018-2.1
20190.6
2020-0.6
2021-9.7
20226.4
2023-0.6

Arts and recreation services:

  • labour productivity rose 8.1 percent
  • output rose 14.8 percent
  • labour inputs rose 6.2 percent.

The rise in labour productivity was driven by growth in output.

Mining:

  • labour productivity fell 11.9 percent
  • output fell 7.1 percent
  • labour inputs rose 5.5 percent.

The fall in labour productivity was driven by a fall in output and a rise in labour inputs.

Construction:

  • labour productivity fell 1.7 percent
  • output rose 2.1 percent
  • labour inputs rose 3.9 percent.

The fall in labour productivity was driven by a rise in labour inputs.

Rental, hiring, and real estate services:

  • labour productivity rose 0.7 percent
  • output fell 1.0 percent
  • labour inputs fell 1.6 percent.

The rise in labour productivity was driven by a fall in labour inputs.

2023 results provisional

The results for the March 2023 year are available for the first time in this release and are subject to revision, as updated data sources are incorporated.

Updates to 2022 data

We have incorporated several updates to 2022 data into this release. Before each productivity statistics publication, updated historical data for both input and output indicators are incorporated, leading to updated productivity estimates for previous years.

See 2023 preview of national accounts improvements for more information about the annual output and capital data updates.

For the year ended March 2022, we have updated:

  • labour productivity for the measured sector, from 2.2 percent to 1.0 percent
  • multifactor productivity for the measured sector, from 1.2 percent to -0.1 percent
  • labour productivity in primary industries was unchanged
  • labour productivity in goods-producing industries, from 1.1 percent to -2.1 percent
  • labour productivity in measured-sector service industries, from 3.6 percent to 3.1 percent.

How we compare with Australia

The data used in this comparison starts in 1996, when the industry coverage of both New Zealand's and Australia's productivity series are comparable. They represent average annual growth rates from 1996 to 2023.

The latest figures show that on average, New Zealand's output growth is lower than that of Australia. From 1996 to 2023, the average annual growth in labour productivity in New Zealand was 1.2 percent, compared with 1.8 percent in Australia. Labour inputs in New Zealand grew at a higher rate compared with Australia (1.5 percent in New Zealand and 1.3 percent in Australia). Australia's annual output growth is higher than New Zealand's, 3.1 percent compared with 2.7 percent. This leads to Australia's labour productivity growth being higher than New Zealand's on average.

Part of this difference could be explained by Australia's higher levels of capital investment. Growth in Australia's capital inputs has averaged 3.8 percent per year compared with New Zealand's 3.0 percent.

Australia's higher levels of capital investment has meant that their annual capital productivity growth is lower than New Zealand's. Australia's average annual capital productivity growth is -0.7 percent, compared with -0.3 percent for New Zealand.

Compared with Australia, New Zealand has a slightly lower average growth rate of multifactor productivity between 1996 and 2023. New Zealand's growth in multifactor productivity was 0.5 percent, and Australia's was 0.7 percent.

The table below shows comparative productivity data between New Zealand and Australia from 1996 to 2023.

Australia and New Zealand productivity(1)

Average annual growth rates

1996-2023

Variable

Australia

New Zealand

Percent

Output

Value added

3.1

2.7

Labour

Labour input

1.3

1.5

Labour productivity

1.8

1.2

Capital

Capital input

3.8

3.0

Capital productivity

-0.7

-0.3

Multifactor

Total inputs

2.4

2.1

Multifactor productivity

0.7

0.5

Capital to labour ratio

Ratio

2.5

1.5

1. Australia's market-sector industries aggregate, compared with New Zealand's measured sector series.

Australian data is calculated from Australia's market sector industries, while New Zealand data comes from the measured sector. This is simply a terminology difference, as the industry coverage of both statistics is the same. There are also major structural differences between the Australian and New Zealand economies, which will affect the relative contribution of each industry to their respective totals.

Annual data for New Zealand is calculated on a March year basis, while Australian data is calculated on a June year basis. Ordinarily, these differences are not expected to materially affect calculations or trend comparisons. The emergence of COVID-19 in early 2020, and the differing lockdown measures implemented by Australia's and New Zealand's respective governments, will have resulted in timing impacts for the 2020, 2021, 2022, and 2023 years. To a lesser extent, this will also have affected the annual average growth rates from 1996 to 2023.

Impact of COVID-19 on productivity statistics

COVID-19 had relatively little impact on economic activity in the year ended March 2023. As such, we have decided not to continue with adjustments made to capital inputs during the COVID-19-affected period. However, for the year ended March 2023 we have retained the alternative approach to estimating labour inputs that was used during the COVID period.

Methodological changes during the COVID-19 period reflect the reality that many of the usual data and methods used to measure economic activity in New Zealand were unable to effectively capture the changes in activity related to COVID-19. As such, we confronted and - where necessary - used alternative data sources to reflect economic activity more accurately. See Definitions and metadata for more information.

Changes in measurement of labour inputs

We have continued the approach used during COVID-19-affected years of using data on actual hours worked from the Household Labour Force Survey (HLFS), combined with data on jobs filled from business employment data (BED), to derive a measure of labour inputs that captured the effect of COVID-19 on the volume of labour.

Changes in measurement of capital inputs

During COVID-19-affected periods we made adjustments to capital inputs to account for reduced utilisation of capital stock. No such adjustments have been made to capital inputs in the year ended March 2023. However, adjustments made in the year ended March 2022 will affect growth rates of capital inputs and dependent series in the year ended March 2023.

More data

Use Infoshare to access annual productivity data:

Subject category: Economic indicators
Group: Productivity statistics - PRD

Use NZ.Stat to view and download data for productivity statistics.

Theme: Productivity
Category: Productivity tables

Definitions and metadata

Productivity measures statistics - DataInfo+ provides general methodology used to produce these statistics.

Productivity measures statistics - concepts - DataInfo+ provides the definitions of terms used in this release.

Productivity measures statistics 1978-2023 - DataInfo+ provided full details of changes made to methods for measuring productivity.

Technical enquiries

Will Critchlow
04 931 4600
[email protected]

ISSN 1178-0630

Next release

Productivity statistics: 1978-2024 will be released in April 2025.

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