Theme: Prosperous
Dimension: Dynamic economy that shares prosperity
Metric
The current 20-year average labour productivity growth compared to the 20-year average growth 10 years earlier
Why does this matter
Labour productivity (GDP per hours worked) is the most used indicator for economic efficiency.
Labour productivity is a driver of economic growth, real wages, and overall living standards.
Short term movements in productivity are subject to volatility, so it is most appropriately examined by considering trends over time.
Has there been progress
Labour productivity growth has slowed in Australia since the mid‑2000s. In the decade to 2020, Australia’s productivity growth was the slowest in 60‑years. Average productivity growth over the past 20 years to 2021–22 is around 1.2 per cent.
The slowdown in Australia’s labour productivity growth is not unique and is broadly consistent with the experience of most other advanced economies. Revitalising productivity growth will require investing in Australians’ skills, improving business dynamism, boosting digital adoption, and realising the opportunities of the net zero transformation and growth of the care economy. Given the extended period of poor productivity performance, it will take some time for these policies to improve productivity.