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AfricaMoney | October 18, 2017

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Mauritius: Decadal growth in employee compensation outstrips labour productivity

Mauritius: Decadal growth in employee compensation outstrips labour productivity

Happy Labour Day? For the 10-year period from 2003 to 2013, Statistics Mauritius data showed that average annual compensation of employees increased by 7.3% whilst labour productivity grew by 2.9%. (Image: Mauritius Tourist Guide)

Mauritius celebrated Labour Day amid much fanfare yesterday, but labour woes look set to continue in the island economy. Data published today by the statistics office shows that employee compensation grew more than labour productivity in Mauritius over the last decade, demonstrating lower bargaining power for workers as they argue a case for increased wages to counter rising prices.

For the 10-year period from 2003 to 2013, Statistics Mauritius data showed that average annual compensation of employees increased by 7.3% whilst labour productivity grew by 2.9%.

During the same period, the unit labour cost (ULC), defined as the compensation of employees per unit of output, grew at an average rate of 4.2% per annum for the economy.

For 2013 in particular, ULC increased by a towering 7.6% compared to a 2.7% growth in 2012.

On the employment and labour productivity front, from 2007 to 2013 the labour input for the overall economy grew by an average of 1.5% per annum but declines of 0.8% and 3.5% were recorded in the manufacturing sector and export oriented enterprises (EOEs) respectively.

On the other hand, labour productivity witnessed an increase of 2.3% for the whole economy because of higher growth of 3.3% and 5.8% each seen in corresponding sectors of manufacturing and EOEs.

In 2013, labour inputs grew by 3.0% compared to an increase of 1.3% in 2012; while GDP growth in 2013 was 3.2%, lower than the growth of 3.4% registered in 2012.

Hence, labour productivity for the economy in 2013 grew by a mere 0.2%, much lower than the 2.1% growth registered in 2012.

Coming to the manufacturing sector and EOEs, an increase of 1.2% was seen in the labour productivity of workers in the manufacturing sector in 2013, lower than the growth of 2.2% in 2012, while EOEs saw labour productivity actually decline 1.4% in 2013 compared to a growth of 3.8% in 2012.

Between 2007 and 2013, capital input increased at an average annual rate of 4.8% for the wider economy whereas manufacturing and EOEs saw capital inputs decline by 1.7% and 5.7% respectively.

Capital productivity declined by 0.9% for the economy in this period due to lower growth in output compared to capital input, even as the capital productivity of both the manufacturing sector and EOEs increased by 4.2% and 8.3% respectively.

In 2013, due to higher growth of 3.7% in capital input compared to 3.2% growth in GDP, a 0.4% decline was registered in capital productivity.

Also, from 2003 to 2013, GDP at basic prices in real terms, increased at an average of 4.1% each year.

The fact that the population grew by 0.4% annually and the GDP at market prices by 3.9% meant that the GDP per capita at market prices – an indicator of the standard of living of the population- grew by a lower 3.5% yearly during the period 2003 to 2013.

Additionally, Statistics Mauritius drew the attention to the fact that the use of revised population figures according to the 2011 Population Census results has impacted the quantum of labour input and consequently, the productivity indices published in this issue.

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