The Netherlands needs more and more hands to grow the economy. That is a problem now that it is becoming increasingly difficult to find new employees. Countries such as Germany and Belgium, on the other hand, do succeed in producing more per employee. This is apparent from the latest analysis by Statistics Netherlands (CBS).
Productivity per hour worked has been declining in our country for years. And that trend is continuing, according to the latest figures from Statistics Netherlands. In the period between the second quarter of 2019, before corona, and the second quarter of 2022, gross domestic product (GDP) increased, but because the number of hours worked increased more, labor productivity decreased.
Other countries do manage to grow labor productivity, according to the CBS analysis. In Belgium and Germany it was respectively 2.3 and 1.6 percent higher than in the second quarter of 2019. In France it fell 2.6 percent in the same period. The Netherlands also lags behind the eurozone average. There, labor productivity increased by 0.9 percent between the second quarter of 2019 and 2022.
Nevertheless, the Netherlands is not doing badly: the economy here is growing faster than the EU average. We owe this to the fact that the working population has grown in recent years. That is why more people were able to work.
The fact that labor productivity is falling in the Netherlands is partly due to the sectors where many Dutch people work: care, education, government and services. These are sectors where it is difficult to increase productivity. For example, it is difficult to double the number of students per class.
Impact
The government, education and healthcare industry is a large industry. As a result, the impact of the decline in labor productivity in this industry on total labor productivity is relatively large. The decline in labor productivity is mainly caused by an increase in the number of hours worked by 12.9 percent, while the value added of the industry has increased by 6.7 percent.
A notable exception is agriculture. There the farmers managed to produce more in fewer hours. This resulted in a 14.6 percent increase in labor productivity.
As it becomes more difficult to recruit enough new employees, employers need to look for other ways to grow. This can be done, for example, by having existing employees work more hours. But practice shows that few people are willing to do so.
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