In addition to their regular forecasts for the major economic variables, twice a year (in February and August) we ask our Consensus Forecasts panellists' for their projections for total employment growth and wage or employment costs for the next twelve years, along with forecasts for real and nominal GDP growth over the same period. Using indices derived from these projections, we have calculated forecasts for changes to broad measures of productivity growth (real and nominal GDP per employee) and an indicator of unit wage costs (calculated by dividing the employment cost indices by the indices of real GDP per employee). Although some of the wage definitions used are imperfect measures for total compensation per employee, our calculated indices do provide an indication of future trends in unit wage costs.

Our surveys for Trends in Productivity and Wages cover each of the countries listed below. For illustrative purposes we have included forecast tables for the United States and Japan, along with a text commentary taken from our February 2017 survey below. To view a sample issue of Consensus Forecasts please click the "Download Sample Issues" button below

Consensus Forecasts
United States Euro zone
Japan Netherlands
Germany Norway
France Spain
United Kingdom Sweden
Italy Switzerland

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  - Annual Averages -
% change over previous year 2015 2016 2017 2018 2019 2020-24 2025-29
Real GDP 2.6 1.6 2.3 2.4 2.2 2.1 2.1
Total Employment 1.7 1.7 1.4 1.3 1.0 0.9 0.9
Real Output (GDP) per Employee 0.9 -0.1 0.9 1.1 1.2 1.2 1.2
Employment Costs 2.1 2.2 2.5 3.0 2.9 2.9 3.0
Unit Wage Costs 1.3 2.3 1.6


1.7 1.7 1.8
Nominal GDP 3.7 2.9 4.3 4.6 4.4 4.2 4.2
Nominal Output per Employee 1.9 1.2 2.9 3.3 3.3 3.3 3.3

  - Annual Averages -
% change over previous year 2015 2016 2017 2018 2019 2020-24 2025-29
Real GDP 1.3 1.0 1.2 1.0 0.9 0.9 0.8
Total Employment 0.4 1.0 0.6 0.4 0.0 -0.2 -0.3
Real Output (GDP) per Employee 0.9 0.0 0.5 0.7 0.9 1.1 1.1
Total Cash Earnings 0.1 0.5 0.7 0.9 1.0 1.3 1.3
Unit Wage Costs -0.7 0.5 0.1 0.3 0.0 0.2 0.2
Nominal GDP 3.3 0.9 1.6 1.8 2.1 1.9 2.0
Nominal Output per Employee 2.9 -0.1 1.0 1.5 2.1 2.1 2.3

After a poor 2016 outturn, productivity growth [measured as Real Output (GDP) per Employee] in the United States, Japan and Germany is projected to pick up over the next three years. That may be positive news in of itself, but the rates of growth shown here are lacklustre at best. None of these countries are expected to see productivity increases above 1.2%. This productivity problem is not just evident in the G-3 but plagues the G-7 and Western Europe as a whole. Our Productivity and Wages survey shows that the United Kingdom, Sweden and Norway lead the pack with estimated rates of Real Output (GDP) per Employee of 1.5% or below over the next dozen years. The US is in 4th place. The secular decline in productivity rates across the board has been caused by stagnating actual and potential GDP growth, especially since the onset of the financial crisis in 2008. Moreover, employment growth has been just as uninspired. Since the crisis, job insecurity has been a mainstay, exacerbated by a lack of capital investment (representative of firms’ own uncertainty over the outlook). Despite some employment gains, wage growth remains modest in most of the G-7 and Western Europe. This means that consumption is also likely to stay cautious and that growth, therefore, cannot meaningfully take off. Moreover, with unit wage costs in the US, Germany, UK, Canada, the Euro zone, Norway and Spain comparatively stronger, output is likely to be further squeezed going forward. This also raises the prospect of more widespread automation, not just in various goods-producing sectors (where automation is the norm when jobs have not already been exported to cheaper hubs abroad), but also in people-reliant service industries. And this is worrying from a social perspective, with recent votes (Brexit, Trump) showcasing anger amongst those having long faced or are anticipating joblessness in these traditional sectors.

A portion of text from Consensus Forecasts, February 13, 2017.