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In the United States, total hours worked increased 2 percent in 2012, doubling the previous year’s 1 percent growth, according to The Conference Board’s new report, 2013 productivity brief. The renewed traction in the labor market was offset, however, by GDP growth that only rose from 1.8 to 2.2 percent. As a result, labor productivity growth fell dramatically to 0.2 percent —one of the slowest growth rates observed in the post-World War II period.
U.S. labor productivity should rise slightly, from 0.2 to 0.6 percent, in 2013, according to the report.
Labor productivity growth — or additional output per unit of labor — relates output growth to changes in the employment market. In 2012, world GDP growth fell to 3.1 percent from 3.8 percent in 2011, while employment growth fell only slightly from 1.4 to 1.3 percent.
“What makes this year’s brief so unique is that poor productivity performance has been so widespread that there are very few countries or regions in 2012 that showed any productivity improvement at all,” said The Conference Board Chief Economist Bart van Ark. “Facing slow global demand, companies are using labor and capital less efficiently, in turn forcing further cutbacks.”
Productivity grew by 1.8 percent worldwide in 2012, down from 2.3 percent in 2011 and 3.6 percent in 2010. With the exception of the 2008–2009 recession, this represents the slowest productivity growth in a decade, according the report.