Here is a summary chart of the real GDP outcomes for the June quarter (expenditure and production), the hours outcomes (QES and HLFS), and the implied change in labour productivity (real GDP per hour worked), taking the average change in hours worked from the average growth in real GDP.
There was quite a bit more activity all round, but it took a larger percentage increase in labour inputs (hours) to get the published percentage increase in output (GDP). In other words, labour productivity fell: not just the growth rate, but the level.
Here is the same chart for the previous quarter.
It was worse: less GDP growth, but also an even larger fall in GDP per hour worked. Productivity growth for the first half of the year was -0.65 per cent. That isn’t an annualised number, but an absolute change; a significant fall.
Perhaps you think this just shows how dreadful the new government is. Here is the same chart showing the cumulative growth rates for the last six months of last year (in blue) and the first half of this year (in orange).
To me, the similarities are (much) more striking than the differences. Importantly, the level of labour productivity fell in both halves.
Looked at from a productivity perspective – and that really is where one should focus, especially when the unemployment rate is not too far from the NAIRU – it is a pretty dreadful performance. Of course, simply looking at two six month periods on their own doesn’t tell one much, but nothing in these data is inconsistent with the poor productivity record for some years now.
And neither the last government nor this one appears to have any serious ideas for, or any serious interest in, fixing this failure.