Last Year, Overall Industrial Labor Productivity Index Increased by 2.2% Compared to Previous Year

Korea Productivity Center Announces 2022 Labor Productivity Trend Results

Last year, the labor productivity index for all industries in South Korea (based on value added) increased by 2.2% compared to the previous year. The Korea Productivity Center (KPC, Chairman An Wanki) announced on the 29th the '2022 Labor Productivity Trends (2015=100)' report, which includes this information.

The labor productivity index for all industries rose to 110.2, up 2.2% from the previous year. Both value added (3.1%) and labor input (0.8%) increased, with the value added growth rate being higher, resulting in an increase in labor productivity compared to the previous year. Although the growth rate of private consumption expanded compared to 2021, value added increased by 3.1% due to a slowdown in government consumption and export growth rates, as well as decreases in construction investment and facility investment. Regarding labor input, working hours decreased, but the number of workers increased more significantly, leading to a 0.8% increase compared to the previous year.

The manufacturing labor productivity index rose 1.8% from the previous year to 123.5. Value added increased by 1.4%, while labor input decreased by 0.4% due to a reduction in working hours despite an increase in the number of workers. The impact of the Russia-Ukraine war, high inflation and high interest rates, and the spread of global economic slowdown led to a contraction in production and exports, causing the value added growth rate to slow. Although the number of workers increased, labor input decreased compared to 2021 as working hours declined more significantly.

The service industry labor productivity index increased by 2.6% from the previous year to 109.9. Both value added (4.2%) and labor input (1.6%) increased, with the value added growth rate being higher. The increase in value added was due to increased demand for non-face-to-face services and the recovery of domestic consumption following the normalization of face-to-face activities, which boosted consumer spending. Although working hours decreased, labor input increased as the number of workers rose with the improvement of face-to-face service industry conditions amid the recovery from the COVID-19 pandemic.