Industry productivity comparisons

In this communication we discuss some of the recent work in the area of international comparisons of productivity by industry, and show a consistent set of results taken from a range of studies which have become available. In section 2 we present estimates on manufacturing productivity, which received most of the attention in this area of research. We focus on two major problems that are not, or less clearly, present at the aggregate level. The first issue concerns the conversion of the information on output from national currency units to a common currency. This is considerably more complicated at the industry level than at the aggregate level. The second problem relates to the international comparability of the statistical data sources on output, value added, labour and capital input at the industry level. This is followed by a discussion of results of manufacturing productivity for 29 countries. For most countries, we find a substantial stagnation in productivity growth relative to the productivity leader, i.e., the United States, during the 1990s. In section 3 we provide estimates of a more experimental nature on relative productivity levels in transport and communication for 18 countries, and in wholesale and retail trade for 15 countries. In contrast to common wisdom we find big productivity gaps across countries in these service industries, in many cases even bigger than for manufacturing.