Multi-factor productivity: Estimates for 1998 to 2007

Abstract

Multi-factor productivity (MFP), sometimes referred to as total-factor productivity or growth accounting, is a method of analysing productivity which allows for a more in-depth assessment of performance at a whole economy or sectoral level. It apportions growth in output to contributions from capital, from labour and a residual MFP which represents the productivity change not explained by the growth in either labour or capital inputs. This approach permits more detailed analysis of what is driving output growth compared with the traditional headline measures of productivity, which use only labour as their factor input. This article presents multi-factor productivity results for 1998 to 2007 using an experimental quality-adjusted labour input measure and experimental estimates of capital services growth as inputs. The analysis has been produced for the whole economy, the market sector and some broad industry groupings.