Albania’s productivity in decline by 3.2% compared to 2016, worst in the region and Europe

The Albanian economy has seen a further deterioration of the labor productivity indicators during 2016.

According to the Institute of Statistics, net sales per employee dropped to ALL 4 million, down by 3.2% compared to the previous year.

In the manufacturing sector, productivity fell by 6.3%, while in the section of services the decline was 1.5%.

These statistics show that Albania continues to deteriorate in one of the most important indicators of business competitiveness.

According to a study conducted last year by experts from the European Bank for Reconstruction and Development, Albania has the lowest labor productivity in the region and Europe.

Productivity in Albania is estimated to be one third of the regional average and one-fifth of the 11 most developed European Union countries.

Low productivity implies a weak efficiency and competitive disadvantage for an enterprise or an economy.

In the region, Bosnia and Serbia have the highest productivity, while Kosovo, which is the penultimate, has a labor productivity of about 50% higher than Albania.

The main factors that determine productivity in an economy are labor force abilities and use of technology in production processes.

Low labor costs and high informality seem to have turned into a boomerang type for the Albanian economy.

Because wages are low, many companies do not have the incentive to invest in technology, which would enable increased production and lower labor costs.

SCAN

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