16 Mar 2011

Productivity at 10-year high

12:09 pm on 16 March 2011

New figures show the recession increased productivity among workers to its highest level in a decade.

Labour productivity rose 3.7% in the year to March 2010.

Productivity measures how much a worker produces for a given hour of work, and is a critical determinant of how quickly an economy can grow and how fast wages can rise.

Statistics New Zealand says production fell 0.8% in the year to the end of March, but was less than the fall in hours worked.

Fewer hours worked increased the availability of equipment to workers, boosting productivity by 2.1%.

The improvement helped pull up New Zealand's recent productivity performance, which has lagged behind other OECD countries and has deteriorated in recent times.

Labour productivity rose 0.9% per year between 2006 and 2010, compared to a 2% annual increase between 1978 and 2010.