Labour productivity and sectorial structures in European economies

This paper analyzes the contribution of manufacturing and services to
aggregate productivity growth in the European economies during the period
1994-2003. In a context of mediocre demand growth, productivity in services
is growing slowly, which in economies increasingly oriented towards services
is a strong restriction to the increase in aggregate productivity. On the other
hand, manufacturing contributes very significantly to that productivity growth.
This is because industry presents better conditions for achieving productivity
gains trough the expansion of demand. This is confirmed by the empirical
analysis whose statistical source is the Groningen Growth and Development
Centre, 60-Industry Database (GGDC). This empirical analysis shows a sharp
contrast between the style of growth in manufacturing, based on increased
productivity, and the services sector, based on increased employment.
Rafael Fernández Sánchez
Enrique Palazuelos Manso
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