Productivity levels in New Zealand’s manufacturing sector have improved in comparison to the rest of the kiwi economy since the global financial crisis.
Radio New Zealand reports that Reserve Bank analysis found that unlike most parts of their economy, manufacturing is yet to return to its pre GFC production levels.
Instead, the report showed manufacturing activity dropped during the GFC as companies reduced operation hours and employee numbers.
Today, production remains 9 per cent below the countries pre-recession peak and companies have not matched any incremental gains with higher employment or hours worked Radio NZ reported.
Increasing productivity without increasing number of hours or employees is the reason why manufacturing has seen productivity levels rise while other sectors remain unchanged.
New Zealand’s Reserve Bank said manufacturing output is also looking up, with 60 per cent of production sold locally and the majority in construction recent disasters in Christchurch are set to boost the industry as rebuilding continues.
In comparison to this, Australian productivity has slumped, Manufactures’ Monthly today reported for the period 1999-2008 manufacturing made up 45 per cent of the decline.
The Productivity Commission’s interim report found seven of the eight subsectors recorded a drop in productivity.
Productivity is understood basically to mean how efficiently equipment and labour are used.
The research suggests stagnation in technological knowledge and investment is part of the problem in Australia.