Norwegian Labour Market
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Productivity

Productivity is a key driver of economic growth and improvements in living standards. A commonly used measure of productivity is the value generated per hour worked, also known as labour productivity. The latest figures from the OECD’s Compendium of Productivity Indicators 2024, which includes comparable data for Norway and the OECD up to 2022, are presented below.

When comparing labour productivity across countries, focus is placed on two key metrics: a country’s value creation, Gross National Product (GNP), and the total number of work hours. To make these figures comparable across countries, purchasing power parity (PPP) adjusted figures for GNP are used, which account for price differences between countries.

High productivity in Norway

When measuring productivity in terms of GDP per hour worked, adjusted for purchasing power parity (PPP), the average in the OECD region was $67 per hour in 2022. Ireland and Norway stand out with the highest productivity levels among OECD countries, exceeding $160 per hour, more than double the OECD average.

When comparing productivity levels across countries, it’s important to approach the numbers with caution. In some cases, as the OECD points out, Gross National Income (GNI) per work hour can be a useful supplement to labour productivity measured as value creation (GDP) per work hour. GNI accounts for net income from abroad, offering a more comprehensive understanding of economic efficiency.

The OECD notes that in many countries, comparisons between GDP and GNI per work hour yield similar results, as the underlying income flows are either small or balance each other out. However, countries like Ireland, Luxembourg, and Norway display significant differences between these measures due to the large role of multinationals in output and income transfers.

Figures for GNI per work hour show a lower level for Ireland, Norway, and Luxembourg, thus narrowing the gap to the OECD average. Still, Norway and Ireland remain at the top among industrialised countries when measured by GNI per work hour.

Lower productivity growth in recent years

Recent years have seen a notable decline in productivity growth across most industrialized nations, including Norway. The productivity growth over the last decade has been significantly lower than in the early 2000s. A comparison of average annual productivity growth from 2000-2007 versus 2010-2022 reveals this trend. In the case of Norway, annual growth was at 1.7% at the beginning of the 2000s, compared to 0.5% over the last 12 years. This average growth is among the lowest of the industrialized countries. For comparison, Denmark has maintained approximately the same growth rate over the last 12 years as in the early 2000s, while Sweden’s growth declined from 2.7% to 1.3%.

For a different perspective on productivity growth over time, the figure from the National Budget, which shows the rolling 10-year average productivity growth, provides insight. In this instance, Norway’s data specifically concern the mainland economy, excluding sectors such as crude oil and natural gas extraction, which are included in the OECD’s broader calculations.

This view also reflects the decline in productivity growth. However, when focusing solely on Mainland Norway, its trajectory aligns more closely with other industrialised countries like Sweden, the USA, and Germany.

As previously mentioned, it is essential to approach comparisons of productivity with caution. However, a clear main theme emerges from the various sources referenced above: Norway possesses a high level of productivity compared to other industrialized countries. Similarly, in line with other industrialized nations, Norway has experienced a significant decline in productivity growth over the past 10-15 years.

Large differences in productivity between industries

The oil and gas industry is by far the most productive sector in the Norwegian economy, with a value-added of close to 6,000 NOK per hour worked. This is significantly higher than the industry average of 743 NOK per hour, and 628 NOK per hour for mainland Norway.

About the data

International data on productivity are from the OECD “Compendium of Productivity Indicators“.

Data on productivity levels in Norway is from Statistics Norway.

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