Q1 All-Industry Labor Productivity Index Increases by 4.1%

Korea Productivity Center Announces Labor Productivity Trends for Q1 2024

In the first quarter of this year, labor productivity across all industries increased by 4.1% compared to the previous year. This was the result of a decrease in labor input alongside an increase in added value. The Korea Productivity Center (KPC, Chairman An Wanki) announced on the 26th the '2024 First Quarter Labor Productivity Trends,' which included this information.

The labor productivity index for all industries (based on added value) was 105.9, showing a 4.1% increase compared to the same period last year. Although private consumption slowed and government consumption and facility investment decreased compared to the same period last year, added value increased by 3.7%, supported by an increase in exports. The number of workers increased, but labor input decreased by 0.4% year-on-year due to a larger reduction in working hours.

The manufacturing labor productivity index rose by 7.2% year-on-year to 106.2. This was due to a decrease in labor input alongside an increase in added value (6.5%). Despite worsening external conditions such as the global high-interest rate trend and US-China competition, added value increased thanks to the recovery of exports in key industries. Regarding labor input, although the number of workers increased, working hours decreased even more significantly.

The service sector labor productivity index increased by 3.8% year-on-year to 109.5. Labor input decreased due to reduced working hours, but added value increased by 2.0%. However, the growth rate of added value slowed due to persistent high inflation and high interest rates, as well as a contraction in household consumption caused by a decrease in real income.