Thursday, July 15, 2010
Productivity growth resumes
Posted by David Smith at 09:45 AM
Category: Thoughts and responses

The counterpart to the smaller than expected drop in employment during the recession was a sharp drop in productivity growth. As economic growth returns, that is now starting to correct itself and productivity growth is resuming. Whole economy productivity growth was 0.6% in the first quarter, after 0.7% in the final quarter of 2009. Significantly, annual productivity growth turned positive, by 1.3%, after a 0.9% annual fall in the previous quarter.

There was a particular impressive set of productivity numbers for manufacturing, with productivity growth up 3.7% in the first quarter for an annual increase of 7.5%. More here.

The news on corporate profitability was less good, down to 11.1% in the first quarter from 11.3% in the final quarter of 2009. The average rate of return in 2009 was 11.6%, down from 14.3% in 2008. Not bad perhaps for the worst recessionary year in the post-war period. More here.