Productivity continues dip
Australia's productivity growth continues to slow.
Productivity lost pace in 2017/18, new figures show. It carries on a trend that started at the end of the mining boom five years ago.
Reduced investment in equipment is a major contributor to the phenomenon, the Productivity Commission says in its annual productivity update.
Economy-wide labour productivity is up by 0.2 per cent this year - well below the market sector's long-running trend rate of 1.7 per cent per year from 1974/75 to 2017/18.
Labour productivity in the market sector - which accounted for three-quarters of hours worked in 2017/18 - was 0.4 per cent, marking a further slowdown from the past two years.
The weakness is attributed in large part to a slowdown in spending on assets that improve performance.
“This is troubling because investment typically embodies new technologies, which complement people's skill development and innovation,” the commission's report states.
“This is especially so for investment in research and development, where capital stocks are now falling.”
Mining labour productivity fell by 0.4 per cent, while productivity growth was up by 8.2 per cent in the administrative services sector, 6.9 per cent in the finance and insurance industry and 4.1 per cent in the professional services sector.
Across the economy, productivity growth has not translated into real wage growth since 2011/12.
Hourly wages are still only just keeping up with inflation.
“The historical experience suggests that over the long run, an ever-widening gap between real consumer wages, real producer wages and labour productivity is improbable,” the report says.