Release of the Latest Issue of the International Productivity Monitor
Ottawa, January 9, 2019
The Ottawa-based Centre for the Study of Living Standards (CSLS) today released the latest issue of its flagship publication, the International Productivity Monitor. The table of contents of the issue with links to the articles is below. The issue contains eight articles, including a symposium on explaining slower productivity growth in Canada. Highlights of the articles are found below.
- Richard Schmalense from MIT finds that output per hour in the US manufacturing sector actually fell in absolute terms after 2010, after experiencing very rapid growth in 1980-2010. He attributes nearly 40 per cent of this slowdown to the computer and semi-conductor industry, and in particular to the fall in the rate of decline for deflators for commuters and semi-conductors.
- Jaana Remes, Jan Mischke and Mekala Krishnan from the McKinsey Global Institute identify three waves, or drivers of productivity growth, the waning of the effects of the first ICT revolution, financial crisis aftereffects and digital disruption. They find that these first two waves explain 1.9 percentage points of slower labour productivity growth in seven advanced countries between 2000-2004 and 2010-2014.
- Andrew Sharpe and John Tsang from the CSLS point out that Canada has in fact experienced two slowdowns in long-term productivity, after 1973 when output per hour growth fell 1.6 percentage points, and after 2000 when it fell an additional 0.6 points to 0.9 per cent per year. In terms of the post-2000 slowdown they identify the goods sector, especially manufacturing, as largely responsible for the slowdown. Productivity growth in most service industries has in fact picked up after 2000.
- Wulong Gu and Michael Willox from Statistics Canada examine productivity performance in Canada and the United States, finding that much weaker growth in the computers and electronics sector in Canada accounted for one third of the slower multifactor productivity growth in this country over the 1987-2010 period. They also observe that since 2010 Canada’s productivity performance has been better than that of the United States due, in part, to the greater waning of the productivity gains from information and communications technologies (ICT) south of the border.
- Jeff Mollins and Pierre St-Amant from the Bank of Canada find that a weaker contribution from ICT to labour productivity growth accounted for 20-40 per cent of the slowdown in the 2000s, but that this impact was only felt since the Great Recession of 2008-2009.
- Michele Alexopoulos and Jon Cohen from the University of Toronto find that a fall-off in the commercialization of new technologies in this country after 2000, as evidenced by book-based indicators of technological change, contributed to slower productivity growth.
- John Fernand from INSEAD makes the case that weak productivity growth is the new normal in advanced countries and that this situation is largely due to the slower pace of technological progress rather than mismeasurement or regulatory issues.
- Kevin Fox from the University of New South Wales Sydney finds that all industries in Australia experienced slower productivity growth after 2003/2004. He suggests this pattern points to a common factor such as a slower pace of technological change as the explanation of slower productivity growth.
International Productivity Monitor
Number 35, Fall 2018
Sent on behalf of the Centre for the Study of Living Standards (CSLS).
The Centre for the Study of Living Standards (CSLS) is a national, independent, Ottawa-based not-for-profit research organization. Its primary objective is to contribute to a better understanding of trends and determinants of productivity, living standards, and economic well-being in Canada through research.