Data Collection - productivity Stats 2022

Productivity measures statistics Notes about this release Data for 2021 and 2022 are provisional and subject to revision as new or updated data becomes available. Data sources We derived the data used in this release from the sources below. Data Publication Release date Output Gross domestic product: December 2022 quarter 16-Mar-23 Labour volume Business employment data: September 2022 quarter 10-Dec-22 Labour market statistics: September 2022 quarter 2-Nov-22 Linked employer-employee data: March 2021 year (annual tables) 29-Nov-22 Capital National accounts (industry production and investment): Year ended March 2021 18-Nov-21 Income shares National accounts (industry production and investment): Year ended March 2021 18-Nov-21 User costs National accounts (industry production and investment): Year ended March 2021 18-Nov-21 Changes made due to COVID-19 The emergence of COVID-19 in early 2020, and the Government’s response to it, will have affected these statistics. COVID-19 presented challenges for national account and productivity compilers around the globe. We used a range supplementary data to carefully evaluate our estimates and, where necessary, have used alternative data sources to produce more precise and accurate measurement. Output changes Output measures used in Productivity measures statistics are consistent with those published in Gross domestic product: December 2022 quarter released on 16 March 2023. Background information on methodology and data source changes introduced into our QGDP output measures can be found in September 2020 quarter gross domestic product and COVID-19 and Gross domestic product: September 2020 quarter – changes and revisions. We have also made changes to both capital and labour inputs across all industries in order that they capture the effects of COVID-19 and associated response measures. This is done to maintain consistency with the approach adopted for output measures, without which productivity statistics would not be meaningful. Failure to change methods for capital and labour inputs would have resulted in understated measures of labour, capital, and multifactor productivity for 2021, and a less accurate calculation of capital deepening. Labour input changes For labour input in the years ended March 2021 and the year ended March 2022, we have calculated growth rates for each series based on the movement in an alternative indicator. This alternative indicator is compiled by multiplying average jobs filled, mostly derived from Business Employment Data (BED), and average actual hours worked, from the Household Labour Force Survey (HLFS). Due to data availability, we have been able to apply this approach, which is more comprehensive that the approach used for the year ended March 2020. For that year we have retained the approach originally used, which was to adjust labour inputs by industry based on the fall in average actual hours worked, relative to usual hours worked. We have made two minor changes to the alternative labour inputs. We have corrected a coding error that was leading to some second jobs being wrongly assigned between employee and working proprietor categories. We have switched to using HLFS (instead of BED) to estimate working proprietor counts, whilst retaining BED as the source of employee counts. The alternative approaches mark a departure from our normal approach of using hours paid, or usual hours worked, towards using actual hours worked. Ideally, productivity statistics should be capturing actual hours worked and, whilst we have previously used hours paid or usual hours worked as proxy measures, this relied on the presumption of a strong link between these series. That link is believed to have been broken by the effects of COVID-19. Capital input changes For capital inputs in the year ended March 2021 and the year ended March 2022, we have applied adjustments to capital inputs based on estimates of the reduction in capacity utilisation of capital. This approach was implemented last year, however we have made technical improvements to the calculation of adjustments. Previously, when publishing provisional statistics for the year ended March 2021, we assumed a direct relationship with the change in utilisation of labour, as measured by the fall in actual hours worked, relative to usual hours worked. This assumption was based on the belief that changes in utilisation of both labour and capital were driven by similar factors, in particular the full or partial closure of workplaces under COVID-19 response measures. Subsequent analysis suggests that, especially for the year ended March 2022, there was a significant change in utilisation of labour that was not caused by workplace closures, and therefore cannot be assumed to be associated with reduced utilisation of capital. As a result we have changed our approach so that adjustments in capital inputs only reflect the reduction in labour inputs that can be attributed with high probability to COVID-19 related workplace closures, using supplementary data from the Household Labour Force Survey. This change of approach results in revisions to capital inputs, multifactor productivity and other related series for the year ended March 2021. We do not normally adjust for the under-utilisation of capital inputs. The COVID-19 pandemic and associated response measures have caused unusually abrupt changes to utilisation of labour and capital, with an associated impact upon output (GDP). In line with international advice, we are attempting to capture the reduced utilisation as well as possible, in order to maintain the integrity of our labour productivity and multifactor productivity measures. However it is worth noting that this approach may affect the quality of the capital deepening index, as discussed in the following section. Capital deepening Capital deepening represents the change in the ratio between capital inputs (the capital services index) and labour inputs (hours worked). In the year ended March 2021 and the year ended March 2022, reductions in capacity utilisation have lowered both capital and labour inputs; however the impact upon labour inputs has been greater, which is now reflected in our statistics following changes to how we calculate utilisation adjustments for capital. The greater impact upon labour inputs effectively raises capital deepening as measured by the ratio between capital inputs and labour inputs. However, this may be undesirable for users who wish capital deepening to reflect the changes in capital inputs and labour inputs independent of utilisation, i.e. the ratio between productive capital stock and full-time equivalent workers. Analysis suggests that if the effects of diverging utilisation were removed, capital deepening for the measured sector would have fallen by approximately 0.1 percent in the year ended March 2021, and fallen by approximately 3.8 percent in the year ended March 2022. Revisions We incorporated several revisions in this release. The revisions are usually driven by new or improved data that affect historical results, or changes to the underlying measures. The key revisions are discussed below. Every year, before the release of September quarter GDP statistics, Stats NZ updates its quarterly GDP series following the inclusion of new annual benchmarks in calculations. We now have a comprehensive view of the economy and goods and services flows up to the March 2021 year. This sees our national accounts statistics reflect a more up-to-date structure of the economy. The new annual data comes from National accounts (industry production and investment): Year ended March 2021 and National accounts (income and expenditure): Year ended March 2022, both released on 18 November 2022. Updates in data sources have also led to revisions to the previously published productivity series. These included: revised constant-price GDP data feeding into the output series. revised current-price national accounts data feeding into the industry income-based weights. revised current and constant price productive capital stock data, feeding into the capital input series. Revisions to the productive capital stock arose from revisions to gross fixed capital formation by industry introduced in the latest annual national accounts releases. revised and updated labour data feeding into the labour volume series. en-NZ