Productivity results are mixed across industries

The Productivity Commission has released the most recent analysis regarding the state of productivity in Australia.

The results, while positive overall, were not overwhelming as labour productivity saw a rise of 1.4 per cent in 2013-2014 from the previous period. Multifactor productivity, the measure that comes closest to the underlying concept of productivity, increased by 0.4 per cent. 

Some particularly strong-performing industries were arts and recreation services, and financial and insurance services, with rises of 5.4 per cent and 3.5 per cent respectively. Not far behind were the wholesale industry and the information, media and telecommunications industry, both showing increases of 3.3 per cent. 

On the downside, some industries saw major decreases in productivity. The most significant of these was a 5.4 per cent decrease in the electricity, gas, water and waste services industry. Another major loss was recorded by the transport, postal and warehouse industry, with a 3.1 drop in productivity. For these sectors, long-term productivity solutions should be put in place.

The report put a spotlight on the mining industry. The commission stated that the slightly negative growth figure of 0.1 was not representative of what was happening in specific sectors. Specifically, in coal mining and metal ore mining (excluding iron), there were positive gains on production. On the whole, the mining industry is going from a substantial investment period to a more production-focused phase, which may account for lower numbers elsewhere. 

On the whole, Chairman Peter Harris was satisfied with the figures, despite some industries showing negative results, although remained wary of external factors.

"The productivity growth witnessed in 2013-14 remained well below what is required to maintain our historical growth in living standards," he wrote.

"We have additional challenges to confront in Australia's ageing population, resource depletion, as well the changes in the structure of Australian industry, the terms of trade and other external events beyond our control."

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