In this article, we will be taking a look at the least productive country in the world. If you wish to learn about more, head straight to 20 Least Productive Countries in the World.
US Labor Productivity Growth Stagnates Amid Declining Labor Participation
The increase in worker productivity has been the main driver of the US economy and has raised real wages. A McKinsey analysis released on February 16 stated that since 2005, the US has had below-average productivity growth, with an average of just 1.4%. This is due to a decreased labor participation rate.
In the first quarter of 2024, US nonfarm business sector labor productivity increased by 0.3%, a significant slowdown compared to the previous quarter’s growth of 3.5%. This marks a lower-than-average performance, as the long-term average for US labor productivity growth stands at 2.17%. The annual average labor productivity growth in the US nonfarm business sector was 1.2% in 2023 which is a modest improvement from -1.9% in 2022 but still below the historical average.
Manufacturing sector productivity in the US has been sluggish, with an annual average decline of 0.8% in 2023. However, there are variations within the sector, with durable manufacturing experiencing a 2.0% productivity drop, while nondurable manufacturing saw a 2.6% increase. Since the pandemic, US labor productivity has grown at a robust annual pace of 1.5%, outperforming other advanced economies where productivity growth has been scant or negative.
Biggest and Most Productive Companies in the World
When it comes to the most productive companies in the world, Amazon, PayPal Holdings (NASDAQ:PYPL), and Apple Inc. (NASDAQ:AAPL), among many others, can’t be left behind. Amazon’s e-commerce platform and vast product offerings have made it a dominant force in online retail, capturing a staggering 37.8% of all online retail sales in the U.S. One of Amazon’s most significant contributions to the global economy is its role as a job creator. As of mid-2023, Amazon employed over 1.6 million people worldwide, making it the fourth-largest U.S. company by market capitalization. Additionally, Amazon’s investments have supported nearly 1.6 million indirect jobs in fields like construction and hospitality. In Q1 2024, their net sales increased 13% year-over-year to $143.3 billion, exceeding expectations and net income more than tripled to $10.43 billion or $0.98 per share, surpassing analyst estimates of $0.84.
Similarly, PayPal Holdings, Inc. (NASDAQ:PYPL) is a leading technology platform. PayPal (NASDAQ:PYPL) operates a vast global network connecting 426 million active accounts across approximately 200 markets as of December 31, 2023. Since 2013, PayPal has facilitated $24.2 billion in access to small business capital through over 1.2 million loans and cash advances, including $3.6 billion in 2021 alone. In 2021, PayPal completed the allocation of its $535 million commitment to racial equity and social justice and pledged $108 million towards investments supporting the economic empowerment of women and girls. Their revenue reached $7.7 billion in Q1 2024, up 9% year-over-year and the operating income surged by 17% to $1.168 billion.
Lastly, Apple (NASDAQ:AAPL) is also one of the most innovative and productive companies. The company has committed to investing $430 billion in the US over five years, creating 20,000 new jobs across the country. In Q1 2024 Apple reported total revenues of $119.6 billion, up 2% year-over-year and their active installed device base surpassed 2.2 billion, an all-time high.
Our Methodology
For our methodology, we have ranked the least productive countries in the world based on estimated GDP per capita in 2023. For the accuracy of data, we relied on Ilostat.
The Least Productive Country in the World
1. Burundi
GDP per Hour Worked: $1
Burundi tops the list for being the least productive country in the world. Burundi’s labor productivity is forecasted to be only US$0.29 in 2024. Burundi is a low-income economy, with 80% of the population employed in the agricultural sector. In 2023, the economic growth accelerated to 2.7%, compared with 1.8% in 2022. The economic growth is projected at 3.8% in 2024. Inflation in the country averaged 27.1% in 2023, compared with 18.8% a year earlier. Burundi is also one of the least developed and poorest countries in the world.
If you want to learn about other least productive countries in the world, please check out our full list on 20 Least Productive Countries in the World.
Also, don’t forget to see our study on The Cheapest AI Stock if you’re searching for an AI stock that is just as promising as Microsoft but is trading for less than five times its earnings.
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Disclosure. None: The 20 Least Productive Countries in the World is originally published on Insider Monkey.