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Frequently asked questions about productivity – Industry

Can you break these numbers down to industry level?

Comprehensive data on productivity growth rates for the 25 industries within the current measured sector is available. Data can be accessed from Infoshare and NZ.Stat, and information releases are available from the Productivity page. 

Why are some industries productivity series only available from 1996 onwards?

This is due to the nature of the output indicator before 1996. The GDP data for the rental, hiring, and real estate, business services, and other services industries before 1996 is based on a labour input measure, implying that labour productivity growth is (theoretically) zero. Because of this, data for this period has not been included. If data before 1996 were included for these industries, labour productivity would be biased towards no movement.

Why are the industry-level series not composition-adjusted?

This possibility was considered but limited observations in the HLFS and NZIS series means that reliable estimates cannot be obtained.

Why do you not have separate growth cycles for each industry?

Industries may follow measured sector growth in their own way; some industries are pro-cyclical (eg retail trade), while others may be less susceptible to recessionary periods (eg business services). The movements in the wider economy, however, provide a useful benchmark for assessing the growth between industries.

A single cycle was chosen because the purpose of the growth cycle analysis was to make interpretation of the series easier. Having different cycles for each industry would make comparisons across industries harder.

How do you calculate industry contributions to measured sector growth?

Labour productivity growth of each industry contributes to the growth for the whole of the measured sector through either strong productivity growth or its relative size in the measured sector.

The contributions to growth approach takes each industry’s labour productivity growth and multiplies it by its weight (which reflects its size in relation to the measured sector) to determine the size of the contribution of an industry to measured sector labour productivity growth.

It is important to note that strong labour productivity growth within an industry may not necessarily result in a high contribution to measured sector labour productivity growth due to the relatively low weight of that industry. For example, information media and telecommunications has shown the highest labour productivity growth but has not provided the greatest contribution to growth. Similarly, industries with low labour productivity may make a strong contribution to total productivity growth if they have a high weight (eg the manufacturing industry).

Which industries are included in the primary, goods-producing, and service sectors?

To maintain consistency and comparability with the measured sector productivity estimates, only industries that form part of the measured sector are included in the sector aggregations.  Table 5 shows which industries are included in the three sectors.

Table 5

 Sector composition(1) 
 Primary  Goods-producing   Service 
 Agriculture  Manufacturing  Wholesale trade
 Forestry and fishing, and services to agriculture, forestry, and fishing  Electricity, gas, water, and waste services  Retail trade
 Mining  Construction  Accommodation and food services
   
 
 Transport, postal and warehousing
 Information media and telecommunications
 Financial and insurance services
 Rental, hiring, and real estate services(2)
 Professional, scientific, and technical services(2)
 Administrative and support services(2)
 Arts and recreation services
 Other services(2)

1. Based on the Australian and New Zealand Standard Industrial Classification 2006 (ANZSIC06).

2. Included from March 1996 onwards in the productivity services series.

Not all service industries in the economy (as defined under ANZSIC06) are included in the measured sector. Health, education, and government administration and defence are service industries outside the measured sector. The national accounts services series also brings in some industries in different years to the productivity measured sector. Therefore, movements in the productivity service sector output index differ from those in the national accounts service sector series.

The output series for the primary and goods-producing industries are consistent with those published by national accounts.

How can I interpret the sector aggregations?

As the output measure used is value added, the sector aggregations are best understood as contributions to final demand. Ideally, aggregations should use gross output measures to account for the inter-linkages between industries.

How have you defined information and communication technology (ICT) intensive industries?

An ICT-intensive industry is defined by the use of information and communications technology assets in relation to total capital stock. Industries that had significantly higher proportions of ICT assets for the majority of the series were deemed to be ICT-intensive.

Defining ICT-intensive industries involved an examination of IT and software assets in the current and constant price proportions of productive capital stock. The proportions of electrical and electronic equipment assets were also examined, but not focused on as they contain assets that are not related to ICT. Data were assessed at the published aggregate level across the 26 asset types used in the perpetual inventory method. Assessing the data at these levels retains consistency with the level of data feeding into the productivity system.

Significance, for any given year, was defined where an industry had a proportion of ICT assets greater than the upper bound of the 95 percent confidence interval. Lowering the limit to 90 percent did not result in any additional industries being defined as ICT-intensive. This was tested across industries for each year as the assumption of a constant mean would result in most industries becoming significant by the end of the series.

Industries which had a significant proportion of ICT assets across the series were:

  • information media and telecommunications
  • financial and insurance services 
  • professional, scientific, and technical services.

Printing and transport equipment, machinery and equipment manufacturing have become ICT-intensive towards the end of the series. Statistics New Zealand will continue to assess ICT intensity to determine whether the composition of ICT-intensive industries needs to be redefined.

How does this definition of ICT-intensity compare to others?

Similar analyses have examined current price proportions of the productive capital stock.

This definition is based on use of ICT while other studies define the ICT-intensive sector according to whether an industry produces ICT-related products.

This definition uses a confidence interval approach whereas others compare industries to above and below the mean, which is often assumed to be constant. We allow the mean rate of intensity to change over time.

The industries included in this definition have also been defined as ICT-intensive elsewhere. However, due to the use of the confidence interval approach, not all ICT-intensive industries as defined elsewhere are included in this series.

OECD definitions refer to much lower level asset and industry data, which is not available.

The industry coverage was defined by exploring New Zealand data rather applying international guidelines that do not take account of country specific usage.

Why do you not have a productivity series for non-ICT intensive industries?

Given the definition of ICT intensity, no measured sector industry had ICT assets significantly below the mean consistently across the series. In other words, the remaining industries all have a statistically similar proportion of ICT assets in their productive capital stocks. This implies that the ICT-intensive series are best compared against the measured sector series.

 

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