Labour productivity

By Economist.com

GLOBAL labour productivity growth is sluggish. The latest data from the Conference Board, a business-research firm, show productivity growth (measured by GDP per employed person) fell to 1.8% in 2012 from 2.3% in 2011. The global financial crisis had a big impact. In China average productivity growth fell from 12% a year between 2003 and 2007, to less than 9% between 2008 and 2012. Although growth is still strong, China's GDP per worker is only 17% of America's.

Some countries however, saw improvements in productivity last year. Such gains, though, can be a reflection of a faltering economy, in which fewer people are doing the work. In Spain, for instance, productivity has improved since 2007 but both GDP and employment have fallen (by 4.2% and 13.7%, respectively). Moreover, countries like Germany, which successfully limited job losses during the recession, report stagnant productivity. Output per person is also subject to the business cycle: when an economy starts to recover, firms often work their employees harder rather than hire new workers. This initially boosts productivity, but as firms take on more workers, productivity growth will fall.