Fiji's productivity growth uneven, services sector leads as agriculture and manufacturing lag

Fiji's economic productivity has seen an uneven increase over the past eight years, with the services sector leading the growth while agriculture and manufacturing continue to underperform. Minister for Employment, Productivity and Workplace Relations Agni Deo Singh informed Parliament that overall productivity growth averaged between 2.5% and 3.0% from 2016 to 2019, before being disrupted by the COVID-19 pandemic in 2020.

“

Productivity growth averaged about 2.5 to 3.0 per cent between 2016 and 2019. He said this growth was disrupted in 2020 due to COVID-19, which hit economic activity, especially tourism.

Productivity stabilized in 2021 and then rebounded strongly in 2022 and 2023, largely due to the reopening of borders and the recovery of the services sector, particularly tourism, transport, and retail. Fiji's labor productivity currently stands at approximately $19 per hour worked in international terms, placing it in a mid-tier regional position but only at about 18-20% of U.S. levels. The data indicates that this growth has been more reliant on increased labor input rather than gains in efficiency, technology, or investment.

“

This places Fiji in a mid-tier regional position. However, it remains at only about 18 to 20 per cent of the United States levels.

Manufacturing has shown minimal growth over the eight-year period, attributed to high costs, small-scale production, and slow technology adoption. Agriculture, forestry, and fishing sectors consistently record the lowest productivity levels, with many workers engaged in subsistence farming and low-output activities. These sectors remain below 20% of the national average productivity, and the pandemic saw a further decline as labor shifted to lower-output rural work.

“

The Minister said the overall pattern reflects a structural imbalance in the economy. Services are growing faster than agriculture and manufacturing.

Minister Singh highlighted significant constraints hindering future productivity gains. These include low investment in capital, slow development of workforce skills, and the increasing risks posed by climate change. Rising temperatures could reduce labor productivity by 2.8% to 8.3% for every one-degree Celsius increase, with agriculture and construction being particularly vulnerable. Sustainable future growth, he emphasized, will depend on strategic investments in skills, technology, and efficiency, rather than solely relying on expanding the labor force.

“

Rising temperatures could reduce labour productivity by between 2.8 and 8.3 per cent for every one degree Celsius increase. This is especially true in agriculture and construction.