Australian Productivity Growth: Trends and Determinants

Australian productivity growth has slowed since the mid-2000s, particularly compared with the period of strong growth in the late 1990s. This has partly been a global phenomenon. In commodity-exporting economies, rapid capital stock growth has coincided with declining growth of multifactor productivity. While productivity growth in Australia has been particularly weak in the mining and utilities industries, productivity growth has slowed in other industries. A number of potential explanations for the slowdown is considered. The article concludes with a discussion of trends in the terms of trade and the exchange rate and the implications of these for productivity growth.