To a large extent, the slowdown in labour productivity growth can be attributed to a marked slowdown in total factor productivity (TFP) growth, which is generally taken as a measure of technological progress and improvements in the organisation and overall efficiency of production.
Between 1980 and 1995, TFP for the whole economy grew on average by 1.5%, before declining to 0.8% between 1995 and 2007. 5 And private sector services significantly contributed to this decline. Indeed, TFP growth in these services slowed down from 0.6% between 1980 and 1995 to -0.1% between 1995 and 2005.