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2.3 The measured and market sectors

The Statistics NZ and ABS official productivity statistics are consistent with OECD guidelines and comprise index series for labour productivity, capital productivity, and MFP. These series identify productivity growth rates but not absolute levels.

The Statistics NZ productivity statistics cover the so-called measured sector, which excludes industries in which the growth of outputs is difficult to measure and is sometimes proxied simply by the growth of inputs. In 2007, the present measured sector covered 74 percent of the economy.[6] This measured sector is available on a consistent basis from 1996.

Statistics NZ also publishes a series covering a subset of the measured sector. This subset is the former Statistics NZ measured sector before it was expanded to include business services, and personal and other community services. The continued publication of this series provides a link to previously-released Statistics NZ statistics and enables comparisons with Australia (where the ABS use the term “market sector” rather than “measured sector”).

The use of the same industrial classification system (Australian and New Zealand Standard Industrial Classification or ANZSIC 1993/96) facilitates cross-Tasman comparisons. Under ANZSIC 1993/96, the ABS market sector has identical industry coverage to the former Statistics NZ measured sector. However, the ABS ANZSIC 1993/96 market sector was discontinued in 2008, so comparisons can only be made up to this year.

Table 1 sets out industry contributions to GDP in Australia and New Zealand. It includes the 12 industries in Statistics NZ's former measured sector and the ABS market sector (ie industries A to K and P).

Table 1 - Industry contributions to GDP in New Zealand and Australia
Industry Average contribution to nominal
GDP (%) 1990 to 2007*
  New Zealand Australia
A– Agriculture, forestry, and fishing 7.2 3.6
B– Mining 1.3 5.3
C - Manufacturing 17.2 13.5
D – Electricity, gas, and water supply 2.9 2.9
E - Construction 4.6 6.3
F - Wholesale trade 7.8 5.4
G - Retail trade 6.1 6.6
H - Accommodation, cafes, and restaurants 1.8 2.3
I - Transport and storage 4.7 5.2
J - Communication services 3.4 3.1
K - Finance and insurance 6.2 6.6
L - Property and business services** 13.8 11.7
     Ownership of occupied dwellings*** 8.7 8.9
M - Government administration and defence 5.1 4.3
N - Education 4.2 4.7
O - Health and community services 5.3 6.1
P - Cultural and recreational services 2.0 1.4
Q - Personal and other community services** 1.4 2.0
FISIM**** -3.7  
Measured/market sector total 65.2 62.2
Economy total 100.0 100.0

* 1990-2007 is the period for which current price GDP by industry are commonly available for both countries; industries outside the former measured sector/market sector are shaded.

** ‘Business services' and ‘Personal and other community services' are in the current Statistics NZ measured sector, both from 1996 onward.

*** Statistics NZ separates dwellings into owner-occupied dwellings (OOD) and rental dwellings whereas the ABS combines these into a single category – ownership of dwellings (also designated as OOD).

**** Financial intermediation services indirectly measured (FISIM).

The ABS is now publishing productivity statistics under ANZSIC 2006, with Statistics NZ not making this change until 2012. Therefore, when undertaking trans-Tasman comparisons, the ANZSIC 1993/96 series must be used at this stage.

The two measured sectors are identical except that Australia allocates FISIM in accordance with the use of it as an input by individual industries (see section 4). The reference year for the productivity statistics matches that for National Accounts - March years in New Zealand and June years in Australia. Two rows in table 1 have value added recorded in the National Accounts but do not have corresponding labour input (ie, Ownership of occupied-dwellings, and FISIM). The effects of the five non-measured sector industries (ie L, M, N, O, and Q) and the other GDP components, on productivity comparisons is the focus of section 4.

The key data sources and methods used in compiling the Statistics NZ official productivity statistics can be summarised as follows:

  • Output is measured using production-based real GDP for the measured sector.
  • Labour input is based on hours paid for all employed persons (paid employees and the self-employed) in the measured sector. It is derived at an industry level from various firm surveys and household surveys (eg Quarterly Employment Survey, Census of Population and Dwellings, Household Labour Force Survey, Linked Employer-Employee Data). Although hours of work is the preferred conceptual measure of labour input, Statistics NZ has opted for hours paid because of greater confidence in aligning labour inputs with corresponding industry outputs and the availability of longer historical time series.
  • Capital input is based on the flow of capital services generated by capital stocks, which are themselves developed using the Perpetual Inventory Method (PIM) for 24 of the 26 available produced-asset types by industry. Central government roading and local government roading are excluded as these two assets are ‘owned' by ANZSIC division M (Government administration and defence) which is outside the measured sector.[7] These are supplemented by estimates for other assets: livestock, exotic timber grown for felling, inventories, and six types of land (agriculture, forestry, commercial, industrial, mining, and other land).

An implication of these data sources and methods is that there can be a trade-off between what is judged best for official national productivity statistics and what is required for consistent cross-country comparisons. There is generally less of a trade-off in the case of output, but more of one with labour and capital inputs. As discussed in section 4, trade-offs also exist across time given the varying quality of data sources and/or specific judgments made about methodologies.

Notes

  • [6]. 2007 is the most recent year for which current price industry value added is available.
  • [7]. Statistics NZ notes that because roading assets are essentially public goods in the sense they are non-excludable and non-rival in consumption, they do not have an allocable user cost. Rather they enhance other transport assets and are reflected in the calculated MFP residual. However, in Australia, the capital stock for general government roads is allocated to the Transport and Storage industry.
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