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Published: 30 November 2006

New measures of productivity in national accounts

The Productivity Review 2006 introduces the new KLEMS calculation method based on gross output for measuring productivity. The method takes into account the contributions from capital, labour and intermediate inputs to gross productivity within a systematic framework. Besides on total productivity, the publication also presents data on labour productivity and its growth factors. The new method means that the growth factors of labour productivity can be broken down into a number of sub-factors, i.e. capital intensity, intensity of domestic and foreign intermediate inputs, change in the quality of work and total productivity. In future, the KLEMS method will be the official method Statistics Finland will use for measuring productivity.

Over the 2001-2003 period, the annual average growth in the labour productivity was 0.5 per cent in the whole national economy, whereas over the previous time periods it was 3.9 per cent in 1970-1989, 1.2 per cent in 1990-1995 and 5.8 per cent in 1996-2000.

The slowing down of the growth of labour productivity in 2001-2003 was caused by a 1.4 percentage point decrease in contribution from the growth of capital intensity and by a turn to a decline in the growth of total productivity. Over the 2001-2003 period the average impact from capital intensity on labour productivity was 1.4 per cent in the total economy, whereas over the previous time periods it was 1.0 per cent in 1970-1989, 0.1 per cent in 1990-1995 and 2.8 per cent in 1996-2000. Over the 2001-2003 period, the annual average growth in total productivity was -0.8 per cent in the whole national economy, whereas over the previous time periods it was 2.9 per cent in 1970-1989, 1.1 per cent in 1990-1995 and 3.0 per cent in 1996-2000.

Development of productivity in the whole national economy 1970-2003, %

Besides figures on productivity, the publication also contains a description of the EU KLEMS database, a methodological description of the KLEMS productivity calculation method and information about the revision of volume calculations in national accounts, as well as data on the productivity of the public sector.

Source: Productivity Review 2006. Statistics Finland

Inquiries: Mr Antti Pasanen +358 9 1734 2629, antti.pasanen@stat.fi

Director in charge: Mr Ari Tyrkkö

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Last updated 30.11.2006