Labour productivity in Fiji has improved over the past eight years after a sharp COVID‑19 setback, but the country still faces sizable gaps compared with advanced economies, the Minister for Employment, Productivity and Workplace Relations told Parliament in response to a written question. The Minister said the pattern shows a temporary collapse in 2020 followed by a strong rebound from 2022 to 2023, largely reflecting the reopening of the tourism sector.
The Minister outlined that before the pandemic Fiji’s productivity growth averaged about 2.5 to 3 per cent a year, but economic activity contracted sharply in 2020. Since the recovery gained momentum in 2022, labour productivity has risen to an estimated US$19 per hour worked — putting Fiji in a mid‑tier position regionally, but still only around 18 to 20 per cent of productivity levels in the United States. “Fiji’s productivity challenge is not just about working harder, but about working smarter,” the Minister said.
Sectoral performance was uneven. Services — notably tourism, transport and communications — were identified as the main drivers of recent productivity gains as international travel resumed and related services scaled up. By contrast, manufacturing has largely stagnated, the Minister said, citing high input and operating costs and limited economies of scale that have constrained competitiveness and investment. Agriculture remains the weakest sector for measured productivity, with a large share of the workforce engaged in subsistence or smallholder activity.
The Minister flagged a set of persistent constraints that could slow future gains: low levels of capital investment, the growing effects of climate change, and a widening skills gap that leaves many firms unable to adopt productivity‑enhancing technologies. He warned that rising temperatures are expected to further reduce labour productivity in outdoor industries such as agriculture and construction, compounding long‑term vulnerabilities for the rural workforce and infrastructure projects.
Looking ahead, the Minister said sustaining and accelerating productivity growth will hinge on policy choices and targeted investment. He called for greater investment in technology and automation where feasible, stronger skills development and training to close capability gaps, and enhanced climate resilience measures to protect workers and productive assets from heat and extreme weather. He added that maintaining the upward trend will require continued reforms and “smarter investments” across the economy.
This update matters because it quantifies the initial success of the post‑pandemic rebound while underscoring structural challenges that could blunt future improvements. With services-led gains already evident, policymakers face the dual task of consolidating those wins and addressing manufacturing, agricultural productivity and climate risks if Fiji is to narrow the sizeable productivity gap with advanced economies.