Korea Productivity Center Announces
Labor Productivity Trends for the First Quarter of 2025
In the first quarter of this year, labor productivity across all industries increased by 3.2% compared to the previous year. This was due to a decrease in labor input while value added remained at last year’s level. The Korea Productivity Center (KPC) announced these findings on June 26 in its report, "Labor Productivity Trends for the First Quarter of 2025."
The all-industry labor productivity index (based on value added) stood at 107.6, up 3.2% from the same period last year. While government consumption and facility investment rebounded compared to the first quarter of last year, the growth rates of private consumption and exports slowed, and construction investment turned to a decline, resulting in value added remaining at the previous year's level. In contrast, labor input decreased by 3.1% from the previous year due to a significant reduction in working hours.
The manufacturing labor productivity index reached 114.1, a 5.1% increase compared to the same period last year. This was due to an increase in value added despite a decrease in labor input. Value added saw a slight increase as exports slowed amid sluggish domestic demand and worsening external conditions, including continued high interest rates in the United States, strengthened protectionism, and delayed economic recovery in China. In terms of labor input, the number of employees increased, but working hours decreased by an even greater margin.
The service industry labor productivity index was 112.3, up 3.8% from the same period last year. As economic uncertainty grew and high inflation persisted, consumer sentiment weakened, leading to sluggish household consumption. This resulted in a slowdown in the growth rate of value added due to domestic market stagnation. In the service sector as well, the number of employees increased, but working hours decreased by a larger amount.
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