Total Economy Database™ - Key Findings
APRIL 2023
About The April 2023 Release
For an overview of charts and tables, please see the Total Economy Database Summary Tables and Charts, available here, and the Global Productivity Brief 2023.
This release includes updated and revised estimates of the labor productivity and growth accounting variables (including TFP). See our revision notes for the most important changes.
The data can be downloaded through The Conference Board Data Central. Please create an account with The Conference Board for complimentary access to all data files.
Global Labor Productivity Surged In 2020, But Disappointed In Subsequent Years
Global labor productivity surged in 2020, but disappointed in subsequent years. In 2020, as the global economy went into lockdown resulting in recession, global labor productivity surged as measures intended to halt the spread of the virus had a disproportionately negative impact on traditionally weak performing service sector activities. As economies reopened in 2021 and 2022, productivity growth slowed down, and even stagnated in 2022. In other words, most of the global economic expansion, if not all in 2021 and 2022, was driven by increased labor inputs (see chart below). There are several likely reasons for slow productivity growth in 2021 and 2022. A large part can be explained by a reversal of the effects that pushed up labor productivity in 2020, such as the reopening of relatively low-productive and labor intensive in-person service activities that were closed during the pandemic lockdowns. But apart from these ‘mechanical’ effects, several shocks including, but not limited to, supply chain disruptions, high inflation, the ongoing pandemic, and the war in Ukraine likely had a dampening effect on productivity as well.
After stagnating in 2022, modest global labor productivity growth is expected in 2023 but longer-term headwinds remain. High interest rates are leading to lower demand, and in some cases may even lead to (mild) recessions for example in the US. At the same time, job vacancies are elevated and labor shortages are intense in many economies, which means labor demand is likely to remain robust. However, growth in the labor supply due to aging demographics is limited as indicated by low unemployment rates and other measures of labor market slack. Therefore, weak labor productivity growth limits the global economic expansion with just 2.3 percent real GDP growth in 2023, a full percentage-point below the average that prevailed during 2011-2019.
Chart: The Global Economic Expansion Since 2021 Has been Largely Driven by Increased Labor Inputs
Contribution of Growth of Labor Productivity, Total Hours Worked to Global GDP growth, 2000-2023, log percentage points.
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