July 20, 2021


A Persistent Productivity Pickup (Goldman Sachs,12 July 2021)

Stronger productivity growth has been one of the silver linings of the pandemic, with 3.1% annualized growth in output per hour since the start of the crisis (vs. +1.4% in the previous business cycle). Higher-frequency measures indicate further gains in the middle of the year. In this Analyst, we explore the composition of the productivity acceleration to better understand its drivers and sustainability.

We find that productivity gains since 4Q19 are most pronounced in industries where virtual meetings are feasible and in-person expenses like travel & entertainment have scope to decline, for example information technology services, professional services, and product development/wholesale trade. These efficiency improvements from digitization continued in Q1 despite the reopening of the in-person economy and the partial return to corporate office buildings.

The retail sector ranks fourth across industries in terms of pandemic productivity performance, consistent with a boost from ecommerce and from evolving brick-and-mortar business models (expanding curb-side pickup, "Buy Online Pickup In Store"). Timely data indicate these gains persisted in Q2 even as malls reopened and the stimulus boost faded. The composition of retail employment is also consistent with efficiency gains from digitization, with four fewer cashiers and salespeople for every hundred workers (June 2021 vs. 2019).

The end of work is the rise or productivity. 

Posted by at July 20, 2021 12:00 AM