There are many reasons for this including: distance from markets; size of the domestic market; small size of most New Zealand firms; limited participation in global value chains; and lower volumes of capital per worker. But, as with most of the advanced economies, labour productivity growth has been below its historical trend in the current expansion.
In the advanced economies, the decline in labour productivity growth is due to a slowdown in the growth of investment per hour worked (reduced capital deepening) and lower total factor productivity growth (TFP).