Today's business executive is inundated with economic and financial data on a daily basis. Gross domestic product, employment figures, interest rates, productivity, national debt and other such statistics are broadcast on news and published in business publications. On-line services such as Yahoo! and America On-Line offer still additional information through which executives must sort. It is impossible for executives to track each of these statistics, and many of the bits of information available are not relevant to all executives. This research presents some of the microeconomic statistics, or indicators, which are appropriate to executives and considers the ways in which executives can use this information.
Productivity measures the amount of GDP per worker in a particular country, and is calculated by output per worker and output per man hour. Output per worker is calculated by dividing total output by total employment; output per man hour is calculated by dividing total output by total number of hours worked.
Productivity can be compared across nations, a feature which is important in today's increasingly global labor market, so that executives can make determinations about the best location for their facilities. Countries which have high levels of productivity might offer greater profit potential than countries which have lower levels of productivity. In addition, executives should monitor productivity trends both within their home country and abroad to identify potential sources of changes in profitability.
Because productivity is typically presented as an index figure rather than an absolute figure, executives are not likely to be able to compare their own company's performance with the economy as a whole. It is also important to note that productivity can be cyclical since labor levels shift more slowly than some factors such as demand and output. Keeping these limitations in mind, productivity indices can ...