Growth and Productivity Statistics (WPS)
The growth and productivity statistics (WPS) is a set of indicators for statistical analysis in the fields of macroeconomics. Based on the reference framework of the National Accounts, these indicators contribute to various measures and analyses of the performance of the Swiss economy, its competitiveness and Switzerland's evolution towards an increasingly globalised and knowledge-based society.
One of the objectives of these analyses is to shed light on the role and impact of the factors of production (labour and capital) on the growth of Gross domestic product (GDP).
Surveys
The productivity FAQs
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1. How is labour productivity measured?
Labour productivity (LPt) is measured as the ratio of economic output Qt to the labour input Lt required for this production, in each respective year t:
LPt = (Qt / Lt)
2. What is the difference between labour productivity in the total economy and that in the business sector?
Labour productivity in the total economy includes productivity in the market-driven and non-market-driven parts of the economy. The term business sector refers to only the market-driven part of the economy, where economic players' actions are geared towards profit and their strategies aimed at increasing profits. Labour productivity in the total economy, therefore, takes into account activity in the total economy including that of general government and non-profit institutions serving households.
3. Which labour input is used to measure labour productivity?
International organisations, in particular the OECD as well as various National Accounts manuals, recommend actual hours worked to calculate labour productivity. Alternatively, the number of jobs in full-time equivalents can also be used. However, these organisations do not recommend using the number of jobs or employed persons for the calculation. Apart from the fact that these indicators have the disadvantage of not taking working hours into account (a part-time job has the same weight as a full-time one), the second approach has the additional drawback that it counts employed persons only once, even though they may carry out several jobs.
In Switzerland the two following statistics are used for labour input:
1) The Work Volume Statistics (see fact sheet WV), which counts actual hours worked
2) and the Structural Business Statistics (see fact sheet STATENT in French), which provides the number of jobs in full-time equivalents (FTE). As the WV is currently only available at total economy level, FTE can be used as an alternative for structural productivity analyses (economic sectors and activities).Structural Business Statistics (STATENT)
4. How is labour productivity in Switzerland measured?
In Switzerland there are two ways of measuring labour productivity:
1) Labour productivity in the total economy by total actual hours worked and
2) Labour productivity by jobs in full-time equivalents (FTE) for structural analyses (by economic sectors and activities).Labour productivity in the total economy by actual hours worked in the year t is defined as the ratio of: gross domestic product (GDP) t / number of actual hours worked t
Labour productivity by economic sectors and activities in the year t is measured as: gross value added (GVA) t / FTE t
Labour productivity by economic sectors and activities is measured for the business sector only, as it is extremely difficult to measure GVA for the non-market-driven part of the economy. The Swiss Federal Statistical Office follows OECD recommendations and shows here labour productivity only for the business sector. Consequently, the GVA and FTE of general government and non-profit institutions serving households are excluded from the start.
5. Are data available on real labour productivity (at previous year's prices) in absolute values?
It is relatively easy to calculate the absolute values of a data series on labour productivity at the previous year's prices. Usually, however, the use of such data series for labour productivity analyses is avoided. This is mainly due to the methods used in the production account to adjust for price variations. The choice of reference year, which is required with the current method for deflation adjustment (chain-linking method), has a considerable influence on the level of GDP and gross value added, making it impossible to interpret the absolute values of labour productivity. For this reason, for labour productivity at previous year's prices, only the rates of change are shown.
6. Do the support measures (short-time working compensation, loss of earnings) provided during the Covid-19 pandemic have an impact on the measurement of labour productivity?
In 2020 and 2021, as a result of the Covid-19 pandemic, companies received unprecedented support in the form of short-time working compensation and loss of earnings compensation. This support enabled companies to maintain employment relationships with people who were temporarily unable to perform productive work due to legally mandated business shutdowns or a drop in demand.
For the correct measurement of labour productivity, it is essential that labour input reflects the amount of labour actually provided. In many companies, this was significantly less than the contracted and paid work as a result of the support measures mentioned above.
The actual hours worked according to WV, which are used to calculate labour productivity in the total economy, correctly reflect the work actually provided and therefore no adjustment is necessary. This is not the case for FTE employment according to STATENT, which is used to calculate labour productivity by economic sector and industry, as it focuses on contracted and paid work. Therefore, an adjustment of FTE employment according to STATENT is necessary. This adjustment is made from the reference year 2020 onwards using company data on compensation for reduced working hours and loss of earnings. You will find more information on the correction method on the experimental statistics page.
The method used is permanent and makes it possible to incorporate any new event that may lead to a reduction in working hours.
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1. How is capital productivity measured?
Capital productivity (KPt) is defined as the ratio between economic output Qt and the capital input required for this production, Kt, in each year t:
KPt = (Qt / Kt)
2. How is capital input measured?
According to the National Accounts, the stock of non-financial capital cannot be used directly for estimates of capital productivity as it measures only the situation of fixed assets (capital stock value). To measure the contribution of the individual fixed assets to the production process, the value of the services provided by these assets (flow value) must be used, not the value of the fixed assets themselves. In other words, the capital services provided by capital as a factor of production must be determined. For this reason, capital services are used as capital input.
3. Are data on capital productivity available in absolute figures?
No. With the approach used, the method of aggregating capital services for the different fixed assets is based on the calculation of an index (Törnqvist index). For this reason, the values of capital productivity are only available as growth rates.
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1. How is multifactor productivity measured?
Multifactor productivity (MFP) growth is measured as a residual value. It is the difference between real economic growth (measured by GDP at previous year's prices) and the contributions of the production factors labour and capital (changes in labour and capital inputs, which are weighted in relation to their respective share in total production costs). In contrast to labour and capital productivity, MFP cannot be measured directly.
ΔMFPt = ΔQt - [αtΔLt + (1-αt)ΔKt]
Where Qt represents real GDP, Lt labour input, Kt capital input and αt and 1-αt the respective cost shares in the year t. The symbol Δ represents a variable's annual growth rate.
2. How is capital input measured?
According to the National Accounts, the stock of non-financial capital cannot be used directly for estimates of capital productivity as it measures only the situation of fixed assets (capital stock value). To measure the contribution of the individual fixed assets to the production process, the value of the services provided by these assets (flow value) must be used, not the value of the fixed assets themselves. In other words, the capital services provided by capital as a factor of production must be determined. For this reason, capital services are used as capital input.
3. For what level of detail are multifactor productivity data available?
Data on multifactor productivity (MFP) are available only at total economy level. Detailed MFP data at economic sector or activity level cannot be made available as the necessary basic data, in particular on capital services, are lacking.
4. Are data on multifactor productivity available in absolute figures?
No. With the approach used, the method of aggregating capital services for the different fixed assets is based on the calculation of an index (Törnqvist index). For this reason, multifactor productivity data are only available as growth rates.
5. Which analyses can multifactor productivity be used for?
Based on the definition of MFP, the following analyses can be carried out:
- Contribution of production factors and MFP to economic growth:
ΔQt = ΔMFPt + [αtΔLt + (1-αt)ΔKt]
Where Qt represents real GDP, Lt labour input, Kt capital input and αt and 1-αt the respective cost shares in the year t.
- Contribution of MFP as well as contribution of capital deepening to growth in labour productivity. Capital deepening measures the effect of the combination of the production factors capital and labour on growth in labour productivity.
For a better understanding of the relationship between MFP and labour productivity (LPt), the arithmetic expression for the growth rate in labour productivity can be rearranged as follows:
ΔLPt = ΔQt - ΔLt = ΔQt - [αtΔLt + (1 - αt)ΔKt] + [(1 - αt)ΔKt - (1 - αt)ΔLt]
= ΔMFPt + (1 - αt)(ΔKt - ΔLt)Contribution of capital deepening
The difference in the growth rates ΔKt and ΔLt is called capital deepening.
6. Why is there a difference between the OECD series calculated for Switzerland and that of the FSO?
The OECD data subdivide the fixed assets into only eight categories. The FSO, in contrast, bases its calculation on 22 fixed asset categories. This and other methodological differences explain why the OECD multifactor productivity series calculated for Switzerland varies slightly from that of the FSO. In particular, the OECD data used for average lifespan and price trends of fixed assets are internationally standardised in order to guarantee the greatest comparability between countries.
Further information
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This content is not available in English. The German version is provided instead.
This content is not available in English. The German version is provided instead.
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