JAMAICA’S labour productivity measured by output per worker increased for the 10th straight quarter during the last three months of 2011.

By the same measure productivity — GDP per worker — surpassed pre-recession levels going back to 2005, according to a Bank of Jamaica (BOJ) report.

Early in the recession, which began in 2007, Jamaica’s productivity plunged, but it started to pick up during the June to September 2009 period as firms retooled and implemented efficiency measures in an attempt to remain viable.

Many industries reduced their staff complement by either termination and/or laying off staff. Between 2007 and 2010, the employed labour force contracted by approximately five per cent, against a marginally smaller decline in real GDP.

In other words, the measure showed that employers were able to cut jobs faster than the fallout in GDP, while the rate at which jobs were added was slower than the growth in 2011, when the economy returned to growth.

In the special report in the BOJ’s quarterly monetary policy report, the central bank said that the “country’s growth potential is a function of the quality of its factors of production, namely labour and capital, and the efficiency with which they are combined”.

“Sustaining the growth momentum from 2011 will depend critically on improvements in total factor productivity into the medium term,” it said. “In addition, the maintenance of low inflation is important. It is therefore necessary that wage increases be kept below the growth in productivity.”

The BOJ went on to say that continued improvement in productivity would have to be enhanced by increased training and staff development.

“Further, a consultative approach has to be taken with all economic partners to undertake much-needed reforms to strengthen the productive process,” it added.

“It is imperative that price increases be kept, at most, in line with productivity gains so as to facilitate improvement in the country’s competitiveness. In that regard, the central bank is committed to the attainment and maintenance of low and stable inflation.”