Decline in Manufacturing Productivity
The manufacturing sector has witnessed a decline in productivity as indicated by the fall in Gross Value Added (GVA).
- GVA per establishment decreased by 6.7% in 2023-24 compared to 2022-23.
- GVA per worker fell by 4.2% over the same period.
This decline demonstrates reduced productivity at both organizational and individual levels, based on the Annual Survey of Unincorporated Sector (ASUSE).
Comparative Analysis with Previous Years
Despite the recent decline, a long-term comparison shows a significant rise in manufacturing productivity.
- Compared to 2015-16, GVA per establishment in manufacturing increased by 38.5%.
- GVA per worker rose by 51.7%, the highest among all sectors.
In the services sector, GVA per establishment increased by 24.4% and GVA per worker by 42%.
- In the trade sector, GVA per establishment grew by 40.5% and GVA per worker by 35.4% from 2015-16 to 2023-24.
However, in absolute terms, GVA per establishment and per worker in manufacturing are still lower than in trade and services.
Growth in Emoluments
Manufacturing recorded the highest growth in emoluments per hired worker between 2022-23 and 2023-24.
- There was a 16.1% increase in manufacturing.
- Other services and trade sectors experienced growth rates of 10.4% and 14%, respectively.
Factors Behind Productivity Decline
Pronab Sen, former chief statistician, has attributed the productivity decline in manufacturing to several factors:
- The emergence of new companies which typically have lower initial productivity.
- An increased share of own-account enterprises within the manufacturing sector, which grew to 88.3% in 2023-24 from 85.5% in 2015-16.
