Q1 Total Industry Labor Productivity Down 0.1% Year-on-Year

Korea Productivity Center Announces Labor Productivity Trends for Q1 2020

[Asia Economy Reporter Kim Cheol-hyun] The labor productivity index for all industries (based on value added) in the first quarter of this year decreased compared to the same period last year. The Korea Productivity Center (KPC, Chairman Noh Gyu-seong) announced the '2020 First Quarter Labor Productivity Trends' on the 3rd, revealing this result. The labor productivity index for all industries (based on value added) was 105.9, down 0.1% from the same period last year. Value added and labor input increased by 1.1% and 1.2%, respectively, resulting in a decrease in labor productivity compared to the first quarter of 2019. Value added growth slowed due to a decrease in private consumption despite increases in construction and facility investment, government consumption, and export growth rates. Labor input turned to an increase as the number of workers decreased but working hours rose.

The manufacturing labor productivity index rose 1.9% from the same period last year to 110.4. Value added increased by 3.5%, and labor input increased by 1.5% due to increased working hours despite a decrease in the number of workers. By sector, computer, electronics, and optical equipment showed a 9.7% increase in labor productivity compared to the same period last year. Value added increased by 13.4%, and although the number of workers decreased, labor input rose 3.4% due to a significant increase in working hours. In the case of machinery and equipment, value added and labor input turned to an increase, resulting in a 1.8% rise in labor productivity compared to the same period last year. Value added increased by 3.5%, and labor input rose 1.7% due to a decrease in the number of workers and an increase in working hours. Labor productivity in automobiles and trailers decreased by 4.1% compared to the same period last year. Labor input decreased by 2.0% as both the number of workers and working hours declined, and value added fell by 6.0%.

The service industry labor productivity index decreased by 1.4% from the same period last year to 106.7. Value added decreased by 0.4%, while labor input increased by 1.0% due to simultaneous increases in the number of workers and working hours. Real estate labor productivity increased by 0.8% compared to the same period last year. Value added rose by 1.5%, and labor input increased by 0.8% as the number of workers increased despite a decrease in working hours. Wholesale and retail trade labor productivity decreased by 0.6% compared to the same period last year. Value added decreased by 1.1%, and labor input fell by 0.5% as working hours increased but the number of workers declined. Professional, scientific, and technical labor productivity showed a 4.9% decrease compared to the same period last year. Value added increased by 3.2%, and labor input rose by 8.5% due to simultaneous increases in the number of workers and working hours.

A representative from the Productivity Center explained, "Active government policies such as expanding domestic demand to improve private consumption sentiment, which has been contracted due to the impact of the novel coronavirus infection, and preemptive employment measures are necessary."