NZ outpoints Aus on productivity
This story in the Herald today doesn't quite demolish one of the New Zealand right's favourite memes, but it does put a bloody big hole in it.
According to Statictics NZ, New Zealand's labour productivity growth has increased 55.7 per cent since 1988. That's an average annual increase in productivity of 2.6 per cent compared to 2.3 per cent in Australia. The figures are higher than previously unpublished unofficial estimates.
The stats cover what is called the "measured sector" so government, where activity is largely measured by changes in input rather than real outputs, is not included.
But there is lots of good news in these new figures even beyond labour productivity. The report paints a picture of economic transformation, showing, for instance that capital and "multifactor" productivity have been the major drivers of real GDP growth rather than labour. Capital investment was also the major driver of labour productivity growth.
In short, we really are working smarter, in the private sector anyway.
According to Statictics NZ, New Zealand's labour productivity growth has increased 55.7 per cent since 1988. That's an average annual increase in productivity of 2.6 per cent compared to 2.3 per cent in Australia. The figures are higher than previously unpublished unofficial estimates.
The stats cover what is called the "measured sector" so government, where activity is largely measured by changes in input rather than real outputs, is not included.
But there is lots of good news in these new figures even beyond labour productivity. The report paints a picture of economic transformation, showing, for instance that capital and "multifactor" productivity have been the major drivers of real GDP growth rather than labour. Capital investment was also the major driver of labour productivity growth.
In short, we really are working smarter, in the private sector anyway.
posted by Rob O'Neill at 9:48 AM
13 Comments:
Growing up in Thatcherite Britain, I remember the expression:
"There are lies, damned lies and unemployment statistics."
I think we can say as much with these productivity figures. They too are open to debate.
I saw the NZ Herald story which noted our productivity growth being greater than Australia's.
However, Sage has a different take on the issue, breaking down the figures and showing how productiviuty growth has declined under Liar-bour.
http://sagenz.typepad.com/sagenz/
Some sceptism might be expected from Brian Easton's view of the matter.
In the past few days, while TVNZ reported trade figures at their 30 year worst, Easton took the positive view that the rate of worsening for the trade figures was decreasing!
I am sure more analysis is needed, perhaps from less partisan observers.
Understanding the numbers is important, but we have to be careful not to dismiss stats we don't agree with, and accept the ones we do... this stat rings true to me, having lived and worked in both countries (and Thatchers Britain for that matter :)
Great example today was the meaningless headline "NZ second in OECD serious crime stats". Second best or worst? They left it open so we'd all go and look, then didn't answer the question!
Cheers
Yes Darren, there are lies, damn lies and statistic you don't like. I've read Sage's post and you have to remember Labour under Douglas took the pain of restructuring and negative growth to change our economy. National inherited that.
Sage says "National achieved an exceptional 3.1% growth in Labour productivity and 2.7% in multifactor productivity."
This is a comparison of 2000 with 1993, yet Labour lost power in 1990. What happened to those other three years? (It's in the chart)
If you look at the spreadsheet there are two big spikes in productivity, one in 1994 and one in 2000.
I wonder if that's why that time period was chosen? If the first three years of a government don't count, for some reason, then that should be consistent for both parties, don't you think?
(I do wonder about these spikes. they seem to me to coincide with waves of new technology. The PC-ification of busioness and the proliferation of the internet and e-business respectively. But hey, that's just a wild theory.)
You'll also note the last three years of Labour are provisional figures only.
I was so intrigued by those two spikes I phoned Antony Ede at Statistics and asked what they are about.
He said there is no evidence they are tech related. His feeling is they were produced due to spikes in capacity utilisation within manufacturing and processing industries.
In other words, the economy picked up and we started pumping out the goods, working existing capacity harder to do so.
Thanks Rob
You investigated it more than I did and I am sure there is something both sides can take comfort from.
While it is not something that would spring to mind, on reflection you would think an IT boom around Y2K would have had some impact. Good thinking.
But I also recall a bit of a slowdown in 2000 because business was upset at the incoming Liar-bour government.
There was certainly a slump in confidence and perhaps some joblosses too. Helen had to undergo a "charm offensive" to help get business back onside.
I guess one issue is how far do these measures of productivity lag or lead other economic variables.
And that creates room for argument.
Either way, Liar-bour's post election 2005 record includes
Flat economic growth
stagnant real wages
a sinking dollar
and a trade deficit at a 30 year high
Now the economic golden weather has faded, something that was kept well hidden during the campaign, New Zealand looks set for an increasingly tough time and Liar-bour probably squandered the best economic conditions in a generation.
The sinking dollar is good Darren. It's a "correction" (and my dosh is still offshore!!!). The only thing I can see of serious concern is oil prices.
In short, there's more good squandering ahead.
Leaving aside the "two sides", and I acknowledge I didn't in my post ;-), it's good news for NZ when averaged over quite a long period - 17 years.
I'm glad your dosh is still offshore, Rob.
I wish I had transferred mine over before Xmas when NZ$1 was A94C.
Anyway, the figures are something New Zealand can take some comfort in, even though there are other economic yardsticks which don't seem as favourable.
I like your closing comment that "we are really working smarter, in the private sector anyway".
Certainly Liar-bour has pumped billions more into the government sector and there has been precious little benefit.
What is it? A third more for health and no extra operations?
But I guess that's another argument for another day.
BTW for shit stirring controversy, did you see the report that said the Krauts had the highest IQs in Europe, the British were midway, but above the Irish and the French were near the bottom?
Apparantly a cold climate has something to do with it.
the timing of those "spikes" is probably due to the fact you get a bounce back after a downturn. In 1994 we were coming out of the long 1988-92 recession: in 2000 there was a bounce back after the Asian Crisis. What happens is businesses defer investing during a downturn until they are sure it is going to pay off.
My pick about the current "flat" growth which we learned last week we have had since October last year is that it is going to be shorter than expected. Most economists are pickign flat growth until at least sometime next year.
I'm picking - and this is based on a little knowledge and a little hope - that it will come back quicker because the business investment figures over the past three years have been very high - almost as high as the bounce back in 1993-94.
That is, incidentally, one reason why our current account deficit has been grwoing: businesses have been importing capital goods. It's not all plasma screens and the like.
Now, IF that has been productive investment (and there's no way of determing that until afterwards) businesses will be able to "work smarter".
I'm ready to be worng on this - its based on hunch as much as anything else. (almost forgot: it also depends on Bollard not keeping interest rates too high for too long). But I hope I ain't wrong.
Rob: And that would mean another productivity spike, all things being equal.
Darren: Yes, I didn't realy want to get into the public sector stuff (nor did Statistics clearly). What I think is interesting is that the period is so long you could see productivity increases in the public sector as well if you could only measure them properly.
My reasoning is that the sector restructured greatly in the early 1990s as technology came onstream. I think about IRD with over 20 local offices each with 200-odd (and I mean odd! I was one of them!) staff. While I was there these all closed down to just shopfronts as the department's computer system, FIRST, kicked in. It's a story repeated all over the public sector around that time.
Sure, the sector has grown more recently (All sort of cost cutters being employed in management positions who forget to look in the mirror when looking for costs to cut).
The net effect is anyone's guess, unless there are some decent stats.
Lets get this straight RobO. I included both nationals full period and the 7 year trend that commenced as stats identified in 1993. But you leave out that bit. who is misleading who.
the data is march year ends. so National had power till dec 10 99 and the time period ends 3 months later. in terms of trend I think it was caused by a bounceback from 98-99 asian crisis.
any one years data is just not going to be relevant. A multi year trend is important.
The outcome at the end of that dataset is also important.
and the data clearly shows that under Labour the key measure of how our country is increasing wealth per capita has decreased significantly.
make whatever excuses you want and attribute it to anything other than Labour's failed policies, but you will not be able to hide that fact!
Hey SageNZ, yes, you chose to highlight the most favourable figures possible for National. And I did say in my post the answer to my question was in your chart, so no intention to mislead.
Stats thinks both peaks were caused by boucebacks and the sudden utilisation of unused capacity. These peaks make a huge difference to the equation (I for one am not arguing that the second should be included in Labour's term.) They are cyclical, occurring it seems once every five or six years. I predict Labour will see one of these in its stats over the next year to eighteen months.
Interesting. An Aussie blogger has an article up expressing the opposite point of view! (in the context of employment law, in his case).
http://www.roadtosurfdom.com/archives/2006/04/ir_not_believin.html
Interesting find Chris. All par tof the long-term discussion on both sides of the ditch.
The point of the new Stats here is that they are new and revised and, presumably, supecede previous figures, so NZ may not be tracking as badly as assumed in the Aussie discussions. However, the NZ stats are, like everything else here, extremely cyclical.
Post a Comment
Links to this post:
Create a Link
<< Home