In 2013-14, labour productivity growth in both the Australian economy and the 12-industry market sector (which accounts for 65 per cent of the economy) was close to the trend of the last two and half decades.

Preamble

This edition of the PC Productivity Update begins by providing a snapshot of key nation-wide and industry-specific trends from the most recent release of the ABS productivity statistics. In 2013-14, labour productivity growth in both the Australian economy and the 12-industry market sector (which accounts for 65 per cent of the economy) was close to the trend of the last two and half decades. But growth of multifactor productivity remains below the longer-term average. This snapshot is followed by a closer look at recent changes in measured productivity for four industries — Agriculture, forestry and fishing; Mining; Electricity, gas, water and waste services; and Information, media and telecommunications — to highlight some of the main contemporary factors influencing those changes.

Chapter 2 reports on per capita national income growth in Australia and the contribution of productivity growth to that income growth. It highlights that as the terms of trade effects associated with the mining boom taper off, it will be crucial to achieve higher productivity in order to maintain and increase per capita incomes.

Investment in new capital has consistently played a key role in lifting Australia's labour productivity and supporting the introduction of new technologies and ways of working. Chapter 3 outlines recent work by the Commission aimed at improving the efficiency of public infrastructure investment through more transparent and rigorous project selection processes.

Finally, chapter 4 outlines recent work undertaken by the Commission to unpack the specific productivity performance within both the Mining and Financial and insurance services industries. The Mining report traces the transition of Mining industries through the investment phase of the mining boom to the production phase and towards positive MFP growth. The Financial and insurance services report indicates that it is productivity growth in the Insurance, Superannuation and Auxiliary services industry that has driven recent changes in the multifactor productivity for the Financial and insurance services industry as a whole.