Bermuda is leading the way in labour productivity — despite slipping to the slowest rate of growth in five years. That is according to the latest statistics released by Government, which reveal that the Island's labour productivity is $56 compared to its competitors the US ($48), the UK ($40) and Canada ($39).

It was also higher than the G7 countries ($43), North American countries ($40) and the Organisation for Economic Co-operation and Development countries ($36).

But levels of labour productivity fell considerably to 0.6 percent in 2006 from 1.7 percent in 2005, the slowest rate since 2001, stated the Department of Statistics report entitled 'Labour Productivity in Bermuda'.

As productivity growth contracted, labour costs went up, with employers' unit labour costs increasing seven percent and 5.3 percent in 2005 and 2006 respectively, marking the largest rise in labour costs since 2001.

International business activity, real estate and renting services, and financial intermediation, were the main driving forces behind Bermuda's productivity growth, while the hotel and restaurant trade contributed the least. Labour productivity is the amount of output an employee generates per hour and measures how efficient inputs are being used to generate or produce output.

It is also the most important way of determining economic growth, competitiveness and living standards and evaluates the relationship between wage increases and productivity, with the more hours worked and the higher the level of productivity meaning the higher per capita income.

The report focused on labour productivity shifts across 15 major industries, each which contributes to the country's GDP, including retail, construction, hotels, restaurants, real estate and international business, between 1996 and 2006.

The Island's labour productivity level was up 25 percent or $11 worth of output in goods and services per hour over the 11-year period from $45 in 1996 to $56 in 2006.

Labour productivity grew the fastest in 2001 at a rate of 9.5 percent when output per hour worked shifted from $47 to $51, resulting in a seven percent drop in hours worked combined with growth in real output of close to two percent.

In terms of annual value of output produced for each job filled, the labour productivity level increased from $78,369 in 1996 to $83,553 in 1998, as a result of large rises in output produced, but as the number of filled jobs exceeded the increase in output, labour productivity declined to $80,614 in 1999.

However in 2005 and 2006 real output rose at rates of five percent, outpacing growth in jobs at two percent, with a high productivity level sustained in 2006 where it peaked at $100,060.

On average each employer paid 88 cents for $1 worth of output in 2006, while in 2001, which recorded the highest annualised efficiency gain, also registered the largest rise in labour costs of 11 percent or seven cents in the compensation per dollar of real output.

Broken down into sectors, unit labour costs were $1.39 for public administration, $1.26 for international business, $1.19 for eduction, health and social work, 54 cents for electricity, gas and water supply and 35 cents for real estate and renting services.

At an industry level, real estate and renting services, electricity, gas and water supply, and international business activity were the most productive, but hotels and restaurants posted one of the lowest levels of output per hour, with labour productivity at $23.94 in 2006. In contrast, labour productivity for real estate and renting services hit $545.46.

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