OECD Compendium of Productivity Indicators 2025

Executive summary

Productivity growth remained subdued in 2023 and 2024 amid a shifting geopolitical and economic landscape

Following a 0.2% drop in 2022 compared to 2021, labour productivity across all OECD countries rebounded modestly to 0.6% in 2023. In the euro area, labour productivity fell sharply by 0.9% in 2023, marking the steepest decline since the 2008 financial crisis. Experimental estimates suggest that labour productivity growth is likely to have grown modestly at around 0.4% in 2024 on average across OECD countries, excluding Türkiye. While Artificial Intelligence (AI), particularly Generative AI, is expected to positively shape future productivity trends if the right policies are in place, its impact is not yet evident in the productivity statistics.

Evidence for 2023 shows that Multifactor Productivity (MFP) growth, which captures the joint efficiency of labour and capital inputs, either stagnated or declined in most countries, explaining most of the weak labour productivity performance. By contrast, the contribution of capital deepening, while still negative, showed a slight improvement in 2023.

Investment rates varied across OECD countries in 2023. Around half of OECD countries experienced an increase in investment, while the other half saw stagnation or even a decline. This variation likely reflects differences in how firms and households responded to heightened uncertainty, rising costs, and tighter credit conditions.

Productivity performance varied across countries, industries and firms

Aggregate figures mask considerable variation across countries. Around half of OECD countries saw productivity gains in 2023, whereas the other half experienced declines of varying magnitude. Robust labour productivity growth in several non-EU countries helped support the modest increase in the OECD average.

Evidence suggests that cross-country variation in productivity performance was primarily shaped by structural factors, including differences in the business environment and regulatory frameworks, rather than cyclical factors such as labour hoarding.

Labour productivity growth in 2023 was mostly driven by within-industry developments rather than shifts across industries. In about half of the countries with data available, the within-industry contribution was negative or near zero, pulling down overall productivity. Labour productivity growth in manufacturing was the key contributor to economy-wide productivity gains in several countries, including Slovak Republic and Denmark. Energy-related activities, on the contrary, exerted a significant drag on productivity growth in countries like Greece and Croatia. Technology-intensive activities saw a slowdown in productivity growth in many OECD countries.

Large firms also played an important role in shaping productivity developments. On average, they tend to achieve higher labour productivity levels than their smaller counterparts across OECD countries, although this pattern varies by industry. The gap was more pronounced in manufacturing than in business services, reflecting economies of scale and the capital-intensive nature of production.