Labour productivity fell by 0.9% during the March 2023 year – the largest fall since 2009. This is one of the most disgusting economic statistics that I have seen in a long time, and it’s disappointing.
This basically means that our economy made worse use of its people resources than it had the previous year – more workers each did less stuff! Productivity matters, as if we work smarter, rather than harder then not only are we using our precious resources efficiently, but there are more hours left in the day to enjoy the fruits of our labour.
From the pieces of the puzzle I have seen for the 12 months since this data point, I don’t think things have gotten any better. Everything that I see is pointing towards going backwards in terms of our output per worker through to early 2024.
We need this ship to change course, and to reemphasize a point I have been consistently making over recent weeks – KEEP INVESTING!
Just because your margins are squeezed at present, don’t cut corners. Instead, think long-term and invest in your systems, processes, technology, and your staff, so that your business can become a lean, mean, efficient machine. Productive businesses are more profitable, and are more resilient.
If you don’t believe me, just have a look at research on frontier firms (our top 10% of high performing businesses) from the former Productivity Commission.
