The world economy returned to solid productivity growth in 2010, as GDP in most countries recovered strongly from the 2008-2009 financial and economic crisis, while employment lagged behind, The Conference Board reported on January 17.
While advanced regions left recession firmly in the rearview mirror, emerging economies continue to drive both global growth and global productivity growth. The U.S. economy remained on a higher productivity growth path than Europe in 2010, but their productivity growth rates may converge, at least temporarily, in 2011 as U.S. employment picks up momentum. Global productivity growth may moderate slightly in 2011 as cyclical effects abate.
"Global productivity growth has recovered remarkably well following the economic and financial crisis," said Bart van Ark, senior vice president and chief economist of The Conference Board. "It remains to be seen whether global productivity growth will return to its pre-recession trend as employment picks up momentum in 2011."
"U.S. productivity growth will be tempered briefly in 2011 as employment recovers from its major recession cutbacks but that's temporary – the underlying productivity growth trend in the United States remains stronger than it is in Europe."
The data reported January 17 is drawn from The Conference Board Total Economy Database. Widely watched and utilized by analysts around the world, the database is available free of charge for public use. It is updated in January in The Conference Board Productivity Brief and in more in-depth reports later in the year.
Among the key points:
- As cyclical effects abate, advanced economies' productivity gains from 2010 will moderate slightly in 2011. Advanced economies saw an above-trend recovery in labor-productivity growth in 2010 but this is projected to decelerate in 2011.
- Among emerging countries, China and India remain the largest and most dynamic economies in productivity terms, with respective productivity growth of 8.7 percent and 5.4 percent in 2010.
- In 2010, Turkey's productivity growth jumped, Brazil outperformed the Latin American region as a whole, and Russia's productivity growth recovered remarkably.
- The long-term trends in world labor productivity and Total Factor Productivity are still weak.
- U.S. productivity growth will slow substantially in 2011 and could even fall below the rate in the Euro Area.
Further findings and the full data set can be found at www.conference-board.org/data/economydatabase/.
