Publication of the 2021-2022 annual report of the National Productivity Board

On 15 December 2022, the National Productivity Board (CNP) published its 2021–2022 annual report, highlighting three key messages:

·         Productivity is one of the essential determinants for sustaining the socio-economic model and increasing the long-term standard of living. Given the sluggish productivity trend in Luxembourg, the CNP recommends making productivity a priority on the political agenda and in academic research.

·         Productivity can also be understood as “decoupling,” meaning the dissociation between economic prosperity and the consumption of resources and energy. Increasing productivity means improving the efficiency with which human, energy, and capital production factors are transformed into goods and services, thereby saving resources and limiting CO₂ emissions.

·         The areas for action to revive productivity are numerous. Investments in digitalization, R&D and innovation, strengthening and reskilling the workforce, improving corporate governance and managerial skills, and continuously adapting the regulatory framework are priority areas according to the CNP.

The CNP’s 2021–2022 annual report, titled “Polycrise,” covers a wide range of topics. It first provides an overview of the international economic context and Luxembourg’s current economic situation. The CNP then details three key interconnected issues: long-term productivity trends, wage costs and purchasing power, and resource efficiency. Regarding its work, the CNP emphasizes the importance of focusing on the long term and highlighting structural elements that need to be addressed to revive productivity in Luxembourg’s economy.

The CNP describes the sluggish evolution of aggregate labor productivity. A detailed analysis of certain branches of the market economy shows that behind the near-stagnation lie significant sectoral disparities and, within sectors, differences between dynamic companies and lagging ones.

The report also includes three studies conducted by STATEC Research on behalf of the CNP. The first study describes the evolution of Luxembourg’s labor productivity in an international comparison, taking into account various productivity determinants. The second study analyzes the relationship between wages and labor productivity in Luxembourg, while the third classifies economic activities according to their environmental risk and then links economic performance to greenhouse gas emissions.

The CNP’s 2021–2022 annual report will be submitted to the Minister of the Economy, transmitted to the Economic and Social Council for its opinion, and notified to the European Commission.

The original press release issued by the Ministry of the Economy and the National Productivity Board has been translated with the help of an AI tool.