TRENDS IN PRODUCTIVITY AND WAGES
In addition to their regular forecasts for the major economic variables, twice a year (in February and August) we survey our Consensus Forecasts panellists for their projections for growth in numbers of employees and wage or employment costs for the next 12 years, along with forecasts for real and nominal GDP over the same period. In our August 2009 special survey, for example, we asked for our panellists' projections between now and 2021. Using indices derived from these projections, we have calculated forecasts for broad measures of productivity growth (real and nominal GDP per employee) and an indicator of unit wage costs (calculated by dividing the employment cost indices by the indices of real GDP per employee). Although some of the wage definitions used are imperfect measures for total compensation per employee, our calculated indices do provide us with a general indication of future trends in unit wage costs.
Our surveys for Trends in Productivity and Wages cover each of the countries listed below. For illustrative purposes we have included forecast tables for the United States and Japan, along with a text commentary taken from our August 2009 survey below. To view a sample issue of Consensus Forecasts please click the "Download Sample Issues" button below
| Consensus Forecasts | |
|---|---|
| United States | Euro zone |
| Japan | Netherlands |
| Germany | Norway |
| France | Spain |
| United Kingdom | Sweden |
| Italy | Switzerland |
| Canada | |
Download Sample Issues
| UNITED STATES | |||||||
|---|---|---|---|---|---|---|---|
| - Annual Averages - | |||||||
| % change over previous year | 2007 | 2008 | 2009 | 2010 | 2011 | 2012-16 | 2017-2021 |
| Real GDP | 2.1 | 0.4 | 2.1 | -2.6 | 2.3 | 3.0 | 2.6 |
| Total Employment | 1.1 | -0.5 | -3.4 | -0.3 | 1.6 | 1.3 | 1.1 |
| Real Output (GDP) per Employee | 1.0 | 0.9 | 0.8 | 2.6 | 1.4 | 1.6 | 1.5 |
| Employment Costs | 3.4 | 3.0 | 1.6 | 1.7 | 2.1 | 2.7 | 2.8 |
| Unit Wage Costs | 2.4 | 2.0 | 0.8 | -0.8 | 0.6 | 1.0 | 1.3 |
| Nominal GDP | 5.1 | 2.6 | -1.3 | 3.5 | 4.5 | 5.1 | 4.9 |
| Nominal Output per Employee | 3.9 | 3.1 | 2.2 | 3.8 | 2.8 | 3.7 | 3.7 |
| JAPAN | |||||||
| - Annual Averages - | |||||||
| % change over previous year | 2007 | 2008 | 2009 | 2010 | 2011 | 2012-16 | 2017-2021 |
| Real GDP | 2.3 | -0.7 | -6.1 | 1.3 | 1.5 | 1.6 | 1.0 |
| Total Employment | 0.5 | -0.4 | -1.6 | -0.8 | 0.1 | -0.1 | -0.5 |
| Real Output (GDP) per Employee | 1.8 | -0.3 | -4.6 | 2.1 | 1.5 | 1.7 | 1.5 |
| Total Cash Earnings | -1.0 | -0.3 | -3.3 | -1.3 | 0.8 | 1.7 | 1.6 |
| Unit Wage Costs | -2.8 | 0.0 | 1.4 | -3.4 | -0.7 | 0.0 | 0.1 |
| Nominal GDP | 1.6 | -1.6 | -5.0 | 0.3 | 1.5 | 2.0 | 1.5 |
| Nominal Output per Employee | 1.1 | -1.2 | -3.4 | 1.2 | 1.4 | 2.1 | 1.9 |
Our Trends in Productivity and Wages survey contrasts the rather lacklustre pace of G-7 productivity in recent years with the likelihood that recession could help to reverse some of that down-trend, over the short-term at least. In the US, for example, massive reductions in payrolls (averaging around 500,000 a month during much of H1 2009) have provided a temporary boost to productivity, according to the US Bureau of Labor Statistics. Preliminary Q2 nonfarm business output per hour of all workers rose by 1.8% (y-o-y) following the previous quarter's 1.0% increase. The data (released just after our survey deadline) also point to a 0.6% decline in unit labor costs, down from a 0.5% rise in Q1. Meanwhile, Consensus Forecasts' own broad measures of US productivity - defined as real output per employee - show a muted 0.8% gain for 2009 as a whole, due to an expected 2.6% contraction in real GDP. Moreover, a 3.4% decline envisaged for employment helped to keep output per employee in positive territory. A 2.6% surge in productivity is earmarked for next year, although the trend will decelerate quickly thereafter. Swedish productivity in 2010 is expected to outpace US expectations while Germany comes a close third, on the back of the current cycle of cost-cutting. The moderation in US labour productivity over the longer-term could also be due in part to the fading impact of the IT revolution which helped to buoy activity in the 1990s and part of this decade. Productivity in the rest of the G-7 is likely to remain relatively muted, though, as demographic challenges, particularly in Japan and Western Europe, weigh on employment and growth fundamentals.
A portion of text from Consensus Forecasts, August 10, 2009
.