Economic Output and Productivity Performance of the Australian by rur27363

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									          Economic Output and Productivity
       Performance of the Australian States

                        Presentation to
           Productivity Perspectives Workshop „07


                           Presenter: Gudrun Meyer-Boehm




The research has been undertaken by Jim Hurley, Trinh Le, Sid Shanks, Mark Upcher of
the Office of Economic and Statistical Research, Qld Treasury and their assistance is
greatly appreciated. The content of this presentation should not be taken as necessarily
reflecting their views and opinions.
Overview

• GSP and GSI per head of population
   • Importance of the industry structure

• Decomposition of GSI per capita growth

   • Importance of labour productivity

• S/T Net Capital Stock and Capital Services estimates

• Decomposition of Labour Productivity

   • Capital Deepening and MFP
           Real GSP per head of population,
           States, 1984-85 to 2005-06
             $m '04-05            NSW          Vic    Qld      SA              WA        Tas        Aus

            60,000


            55,000


            50,000


            45,000


            40,000


            35,000


            30,000


            25,000


            20,000
                     1984-85   1987-88     1990-91   1993-94   1996-97         1999-00    2002-03     2005-06



Average Annual Growth Rates

    NSW                  Vic             Qld            SA           WA                  Tas              AUS
     1.9                 2.0             2.4            1.9              2.8              1.5             2.1
Real GSP per head of population relative to
the Rest of Australia, 1984-85 to 2005-06
                                    NSW       Vic      Qld      SA      WA        Tas

                    130



                    120



                    110
  Index (ROA=100)




                    100



                    90



                    80



                    70
                      1984-85   1987-88   1990-91   1993-94   1996-97   1999-00   2002-03   2005-06
           Real GSI per head of population relative to
           the Rest of Australia, 1991-92 to 2005-06

                                      NSW             Vic             Qld         SA         WA

                  130



                  120



                  110
Index (ROA=100)




                  100



                   90



                   80



                   70
                        1991-92   1993-94   1995-96         1997-98     1999-00    2001-02   2003-04   2005-06
  Average annual growth rates,
  per cent, 1993-94 to 2005-06

                          NSW    Vic    Qld    SA     WA     Aus



Labour productivity        1.7   1.9    2.0    1.9    2.0    1.8

Labour utilisation         0.5   0.7    0.6    0.4    1.1    0.6

  Employment               0.5   0.5    0.5    0.5    0.5    0.5

  Participation            0.4   0.4    0.4    0.2    0.6    0.4

  Intensity               -0.4   -0.2   -0.3   -0.3   -0.1   -0.3

Real GDP/GSP per capita    2.2   2.6    2.7    2.3    3.1    2.5

Terms of trade             0.6   0.3    0.5    0.6    1.3    0.6



Real GDI/GSI per capita    2.7   2.9    3.1    2.9    4.4    3.0
  Contribution to GDI/GSI growth per head,
  per cent, 1993-94 to 2005-06


                          NSW     Vic     Qld     SA      WA     Aus

Labour productivity       60.8    63.3    65.4    65.6    45.6   59.8

Labour utilisation        18.9    25.3    19.5    14.4    24.6   21.3

  Employment              16.6    17.7    14.6    18.3    11.3   15.6

  Participation           16.1    13.6    13.9     6.4    14.5   14.0

  Intensity               -13.8    -5.9    -9.0   -10.3   -1.3   -8.3

Real GDP/GSP per capita   79.7    88.6    84.9    80.0    70.2   81.1

Terms of trade            20.3    11.4    15.1    20.0    29.8   18.9


Real GDI/GSI per capita    100     100     100     100    100    100
         Labour Productivity
         1984-85 to 2005-06
                              NSW    Vic          Qld      SA       WA         Tas    Aus
       60


       55


       50


       45


       40


       35


       30
         1984-85   1987-88     1990-91         1993-94    1996-97        1999-00     2002-03   2005-06



Average Annual Growth Rates

            NSW         Vic          Qld                 SA          WA               Tas         Aus
            1.4         1.5              1.6             1.4             2.0          1.1         1.5
Labour Productivity, Capital Deepening and MFP

  Labour productivity growth
     • Capital deepening
     • Multifactor productivity
  S/T capital stock data
     • Net capital stock estimates
     • Capital services estimates

  S/T multifactor productivity data
 State and Territory net capital stock estimates


• Research extends previous work by (Mikhailitchenko,
   Nguyen and Smith, 2005)

• Perpetual Inventory Method accumulates State Gross Fixed
   Capital Formation (GFCF) by asset type

• Allocation of national net capital stock to the states
     “Capital services” for States and Territories

• Net capital stock
• Productive capital stock

“Capital services” constructed by scaling-up net capital stock
   growth rates to align with Australian market sector growth
   rates by asset type



Scaling Factors - ratio between the Australian capital service
  index and the Australian net capital stock index.
 Capital services and Net Capital stock,
 Australian market sector, 1974-75 to 2005-06

  Index
350


300
                           Capital Services

250


200


150                                           Net capital stock


100
 1974-75   1980-81   1986-87    1992-93       1998-99      2004-05
Capital Stock and Services Growth,
average annual growth, 1984-85 to 2005-06


State   Net Capital Stock   Capital Services

NSW            2.7                3.7

Vic            2.8                3.9

Qld            3.1                3.9

SA             1.9                2.9

WA             3.1                4.2

Tas            1.7                2.6

AUS            2.9                3.8
 State Multifactor Productivity,
 average annual growth


State   84-85 to 05-06   84-85 to 93-94   93-94 to 05-06
             (%)              (%)              (%)
NSW          0.8              0.6              1.0

Vic          0.7              0.2              1.1

Qld          1.3              0.8              1.6

SA           0.9              0.5              1.3

WA           1.3              1.2              1.3

Tas          0.5              -0.1             0.9
 Decomposition of Labour Productivity,
 average annual growth, 1984-85 to 2005-06

Percent
                      Capital Deepening   MFP
2.0



1.5
                                          1.3
                0.7
1.0       0.8                       0.9
                         1.3
                                                0.5

0.5
                0.7                       0.7
          0.6                       0.5         0.6
                         0.3
0.0
      NSW       Vic      Qld         SA   WA    Tas
     Conclusions

• Labour productivity key driver of output and income growth
• ToT effect beneficial for all States, although different
  magnitude
• Industry structure appears important
• Updated net capital stock estimates
• Capital service method looks promising for construction of
   improved state and territory productivity estimates
• Contribution of MFP to LP growth has been strong for most
   States, in particular since 1993-94.
• Magnitude of MFP and capital deepening contributions to LP
   growth varies across States.
    Further work


• Further testing of capital methods
• Treatment of land and inventories,
• Quality of labour adjustment
• Can GSP(P) data be exploited to improve estimates
• Better measurement of non-market sector

								
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