2nd Quarter Total Industry Labor Productivity Up 3.1% Year-on-Year

Korea Productivity Center Announces Labor Productivity Trends for Q2 2020

[Asia Economy Reporter Kim Cheol-hyun] The labor productivity index for all industries (based on value added) in the second quarter of this year increased compared to the same period last year. The Korea Productivity Center (KPC, Chairman Noh Gyu-seong) announced this on the 4th when releasing the "2020 Second Quarter Labor Productivity Trends."

The labor productivity index for all industries (based on value added) was 109.2, up 3.1% from the same period last year. Value added and labor input both decreased by 3.3% and 6.2%, respectively, resulting in an increase in labor productivity compared to the second quarter of 2019. Although government consumption and facility investment increased, value added declined due to the continued decrease in private consumption and exports. Labor input decreased compared to last year as both the number of workers and working hours declined.

The manufacturing labor productivity index rose 2.7% year-on-year to 112.5. Value added decreased by 6.6%, and labor input fell by 9.0% due to simultaneous decreases in the number of workers and working hours. By major industry, the computer, electronics, and optical equipment sector saw labor productivity increase by 3.4% compared to the same period last year. Value added decreased by 1.1%, and labor input declined by 4.4% due to reductions in both the number of workers and working hours. The machinery and equipment sector also experienced a 5.9% increase in labor productivity year-on-year. Value added decreased by 1.8%, and labor input dropped by 7.3% as the number of workers and working hours declined. The labor productivity of chemicals and chemical products decreased by 2.4% year-on-year. Value added fell by 5.4%, with a larger decline, and labor input decreased by 3.1% due to a significant reduction in working hours.

The service industry labor productivity index increased by 3.8% year-on-year to 109.0. Value added decreased by 2.2%, and labor input fell by 5.8% as both the number of workers and working hours declined. By major industry, real estate labor productivity rose 6.3% compared to the same period last year. Value added increased by 1.9%, and labor input decreased by 4.1% due to reduced working hours. Retail and wholesale labor productivity increased by 3.8% year-on-year. Value added decreased by 3.3%, and labor input declined by 6.9% as both the number of workers and working hours fell. Professional, scientific, and technical services labor productivity decreased by 0.2% year-on-year. While value added increased by 0.9%, labor input rose by 1.1% as the number of workers increased despite a reduction in working hours.

A representative from the Productivity Center explained, "Due to the prolonged impact of the novel coronavirus infection, active government stimulus measures are necessary to break the vicious cycle where contracted private consumption spreads to employment market stagnation."