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The Conference Board finds global labor productivity flat in 2014

May 26, 2015

As the global economy continued its tepid performance in 2014, so too has world productivity growth, according to a report released by The Conference Board. Global labor productivity growth, measured as the average change in output (GDP) per person employed, remained at 2.1% in 2014 and showed no sign of strengthening to its pre-crisis average of 2.6% (1999-2006).

The report attributed the lack of improvement in global productivity growth in 2014 to several factors, including a dramatic weakening of productivity growth in the US and Japan, a longer-term productivity slowdown in China, an almost total collapse in productivity in Latin America, and substantive weakening in Russia. Notable productivity improvements in India and Sub-Saharan Africa were insufficient to compensate for the weakening performance elsewhere.

Labor productivity in mature economies grew by 0.6% in 2014, down slightly from 0.8% in 2013. Labor productivity growth in the US declined to 0.7% in 2014 from 1.2% in 2013.

Japan saw a more dramatic decline from 1.0% to -0.6%. The Euro Area saw a very small improvement in productivity to 0.3% in 2014 from 0.2% in 2013. Emerging and developing economies saw a very small improvement in labor productivity growth to 3.4% in 2014 from 3.3% in 2013.

For 2015, a further weakening in labor productivity is projected, down to 2%, continuing a longer-term downward trend which started around 2005. Despite a small improvement in the productivity growth performance in mature economies — up to 0.8% in 2015 from 0.6% in 2014 — emerging and developing economies are expected to see a fairly large slowdown in labor productivity growth from 3.4% in 2014 to 2.9% in 2015. The decline is primarily a reflection of the continuing fall in growth and productivity in China, but also includes the negative growth rate of Brazilian and Russian productivity.