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 February 2011 special survey, for example, we asked for our panellists' projections between now and 2023. 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 February 2011 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 | |
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| UNITED STATES | |||||||
| - Annual Averages - | |||||||
| % change over previous year | 2009 | 2010 | 2011 | 2012 | 2013 | 2014-18 | 2019-2023 |
| Real GDP | -2.6 | 2.9 | 3.2 | 3.3 | 3.2 | 2.9 | 2.6 |
| Total Employment | -3.8 | -0.6 | 1.1 | 2.0 | 2.0 | 1.4 | 1.0 |
| Real Output (GDP) per Employee | 1.2 | 3.5 | 2.1 | 1.3 | 1.2 | 1.4 | 1.6 |
| Employment Costs | 1.7 | 1.9 | 1.8 | 2.0 | 2.3 | 2.5 | 2.4 |
| Unit Wage Costs | 0.5 | -1.5 | -0.3 | 0.7 | 1.1 | 1.0 | 0.8 |
| Nominal GDP | -1.7 | 3.8 | 4.6 | 4.9 | 5.2 | 4.8 | 4.4 |
| Nominal Output per Employee | 2.1 | 4.4 | 3.5 | 2.9 | 3.1 | 3.3 | 3.4 |
| JAPAN | |||||||
| - Annual Averages - | |||||||
| % change over previous year | 2009 | 2010 | 2011 | 2012 | 2013 | 2014-18 | 2019-23 |
| Real GDP | -6.3 | 3.9 | 1.5 | 2.0 | 1.8 | 1.3 | 1.2 |
| Total Employment | -1.7 | 0.0 | 0.2 | 0.3 | 0.3 | -0.4 | -0.4 |
| Real Output (GDP) per Employee | -4.6 | 3.9 | 1.3 | 1.7 | 1.5 | 1.7 | 1.6 |
| Total Cash Earnings | -3.9 | 0.6 | 0.8 | 0.9 | 1.0 | 1.5 | 1.5 |
| Unit Wage Costs | 0.8 | -3.2 | -0.5 | -0.8 | -0.6 | -0.1 | -0.1 |
| Nominal GDP | -6.6 | 1.8 | 0.5 | 1.7 | 1.9 | 1.7 | 1.7 |
| Nominal Output per Employee | -5.0 | 1.8 | 0.3 | 1.3 | 1.6 | 2.1 | 2.2 |
After coming out of recession at the end of 2009, the United States faced a shaky 2010, especially in terms of job fundamentals. Indeed, total employment continued declining last year (by 0.6%) following a 3.8% collapse in 2009. Not surprisingly, productivity growth – real output per employee as shown above – accelerated from 1.2% in 2009 to 3.5% on the back of that and a stronger GDP outturn. This year’s rebound in productivity growth is expected to tail off slightly (to 2.1%), despite a further pick-up in the economic recovery. Payrolls should regain some of their footing, although unit wage costs will continue dropping. Meanwhile, productivity as measured by the US Bureau of Labor Statistics – which reports nonfarm business output per hour of all workers (and not per employee) – soared by 2.6% (q-o-q annualized) in Q4 2010, up from 2.4% in Q3. However, in y-o-y terms, nonfarm productivity slowed from 2.6% in the September quarter to 1.7%, supported by declining unit labour costs and last year’s gains in output following the 2009 recession and resulting cost-cutting cycle.
A portion of text from Consensus Forecasts, February 14, 2011.