Multifactor productivity has increased in South Africa. This emerged during the release of the 2023 National Productivity Statistics by the government agency tasking with productivity improvement and job creation, Productivity SA.
Productivity SA is an entity of the Department of Employment and Labour, established in terms of section 31 of the Employment Services Act, No. 4 of 2014, with the mandate to promote employment growth and productivity, thereby contributing to South Africa’s socio-economic development and competitiveness.
Speaking during the release of the 2023 Productivity Statistics, the Acting Chief Economist at Productivity SA, Ms Juliet Mashabela, said Multifactor productivity increased from 4.9% in 2021 to 5.8% in 2022 signalling economic stabilisation. Labour productivity decreased slightly from 3.1% in 2021 to 2.1% in 2022. Capital productivity declined significantly from 3.9% in 2021 to -3.5% in 2022.
Mashabela said “South Africa ‘s productivity statistics reflect the stabilisation of the economy in 2022 following the recovery in 2021 post the onset of Covid 19 pandemic in 2020”. The economic stabilisation was mainly underpinned by the recovery in Capital investment while the global Geopolitical risks remain high, electricity supply problems persist while Fiscal spending pressures undermine the efforts to provide basic goods and services in health, infrastructure and education as well as a conducive environment for business and citizens. Consequently, Labour productivity decreased slightly, Capital productivity declined significantly while Multifactor productivity increased somewhat in 2022 signalling economic stabilisation following the onset of Covid 19 and the economic recovery in 2020 and 2021, respectively.
Labour productivity decelerated slightly in 2022. The indicator previously recorded positive growth in 2021 following three years of negative growth between 2018 and 2020. Significant positive growth in the indicator was recorded in 2021.
Capital productivity declined in 2022. The indicator previously realised positive growth for four consecutive years between 2018 and 2021. Significant positive growth in the indicator was recorded in 2020 while the opposite is the case in 2022. Multifactor productivity accelerated insignificantly in 2022. The indicator recorded positive growth in 2018 and 2021 while it registered negative growth in 2019 and 2020. Significant positive growth in the indicator was registered in 2022 while the opposite is proper in 2020.
The Productivity Statistics Report is an annual report by Productivity SA which measures the levels of productivity, or the efficiency with which production inputs are used to produce goods and services, at the economy, the main sectors as well as the industry levels. The following are the productivity measures of interest, namely, labour productivity, capital productivity, multifactor productivity, capital labour ratio as well as unit labour cost.
Productivity measures the ability of the economy to produce output, i.e., goods and services, using inputs, i.e., Labour input and Capital input. An increase in productivity means that, ceteris paribus, more output is produced using similar amounts of inputs.
Productivity SA collects data from official sources, namely, Statistics South Africa and the South African Reserve Bank. The productivity indices are then calculated using this data. These indices comprise Capital labour ratio, Labour productivity, Capital productivity, Multifactor productivity, Compensation per employee as well as Unit labour cost.
The Chief Executive Officer (CEO) of Productivity SA, Mr Mothunye Mothiba says the release of the statistics is key in creating a platform for understanding how an improvement in productivity in the private and public sectors can succor spur economic growth in South Africa.
For more information, please contact the Productivity SA media liaison office, Maupi Monyemangene, on 0824473232 or send an e mail: maupim@productivitysa.co.za.
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