Productivity rose in final quarter of 2011

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Productivity rose in final quarter of 2011

Growth in Korea’s labor productivity accelerated in the fourth quarter of 2011 from three months earlier, helped by solid export gains, a government report showed yesterday.

According to the report by the Ministry of Knowledge Economy, the labor productivity index for all industries in the three-month period increased 3.3 percent on-year to 112.6, up from 109.0 tallied a year earlier.

The on-year growth rate of labor productivity sank to 1.1 percent in the third quarter of last year after reaching 3 percent in the second quarter and 4 percent in the first quarter, mainly due to sluggish economic growth brought on by euro zone woes and high commodities prices.

Korea’s economy grew 3.8 percent in 2011 down from 6.2 percent in the previous year.

Labor productivity is measured by dividing total industrial output with total labor input during a given period of time.

The latest report showed labor output rising 3.4 percent with input, which translates to both the number of workers and overall labor time edging up just 0.1 percent.

“Exports jumping 19.3 percent compared to the year before to reach a record high of $556.5 billion contributed to the improvements in the index numbers,” a ministry official said.

For the manufacturing sector, labor productivity rose 7.8 percent on-year to 124.3 in the fourth quarter, while service industries posted a gain of 2.2 percent to 108.6.

In addition, the report showed labor productivity for all industries moving up 2.8 percent on-year to 111.6 for the whole of last year, with manufacturing and services numbers also gaining 6.5 percent and 2.2 percent respectively.

The productivity reading of 111.6 is the highest reached so far.

Productivity for manufacturers reached 123.0 from 115.5 in 2010, with the service sector number hitting 108.5 vis-a-vis 106.2 tallied for the previous year.

The much-slower growth of labor productivity in the service sector was largely contributed by the sluggish domestic economy.

While labor productivity in the financial and insurance sector grew 9.9 percent higher than 2010’s 7 percent, labor productivity in arts and entertainment fell 11 percent.

The restaurant and lodging industry’s labor productivity dipped 0.5 percent from a year earlier.

The government has been stressing the need to vitalize the domestic market, as global demand is expected to continue in the immediate future.

Income per capita retreated 2.9 percent on-year, a sharp drop from the 3.8 percent on-year growth posted in 2010.

By Lee Ho-jeong, Yonhap []

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