The Australian Productivity Commission has released new research into labour productivity during and after the COVID-19 pandemic.
The paper examines the sharp rise and decline of productivity, and divides the ‘bubble’ into three phases for further examination: reallocation, productivity gain and productivity loss.
In the first phase, the research found that from December 2019 to December 2020, productivity rose as lockdowns shifted the workforce away from industries with lower labour productivity, such as accommodation and food services.
Following this, from December 2020 to March 2022, labour productivity continued its growth, thanks to “genuine improvements in output per worker”.
Lockdowns were easing during this time and the labour market slowly recovered.
Stage three saw productivity loss and returned to December 2019 levels.
However, the research also concluded that this bubble simply masked an ongoing productivity issue for Australia. It would hand five inquiries over to the government this year, with recommendations for sustainable growth.
“The COVID-19 pandemic was a rollercoaster for productivity, but we are now back to the stagnant status quo,” said Deputy Chair Dr Alex Robson.
“The big lesson of the COVID productivity bubble is that there are no shortcuts to sustainable productivity growth. Tackling our productivity problem will require dedicated effort and reform from business and government."
