HOUSTON, Dec. 16, 2015 /PRNewswire/ -- Information technology is predicted to boost the U.S. productivity growth rate, but digitization efforts may subdue compensation growth, BBVA Compass economists say in their latest research.
The productivity growth rate has significantly slowed to 0.5 percent over the last five years. Economists across the U.S. are divided in their views on the impact of new technologies, big data processing and apps on productivity and growth. Some economists predict a steep uptick despite the current stagnation; others say that even with new innovations, economic growth will continue to slow due to existing structural headwinds, such as demographics, education, debt and income inequality.
BBVA Compass economist Shushanik Papanyan says the recent slowdown in U.S. productivity growth rates has been structural in nature, and she sees the rate staying low beyond the current cyclical decline and slow post-Great Recession recovery.
"Additional economic efficiencies in production and resource allocation are likely to improve from digitization, the use of digital information, and from big data processing, but the question that remains unresolved is whether digital innovations will boost the future path of productivity growth," she said, summarizing the report, "Digitization and Productivity: Where is the Growth?"
Papanyan notes that even so, the economy benefits from the significant increase in the quality of products and services as a result of the digital era. However, the growing economic importance of automation, coupled with increased resource mobility, rapid globalization and technological advancements, may subdue worker compensation growth and keep inflation low.
"Technology today has a more comprehensive role in production than merely integrating resources in the factory," Papanyan says. "Technology creates new resources with the cost of ownership of many very low and new levels of efficiency that can result in both lower wages and lower prices."
To learn more about digitization and productivity growth, please join the bank's economists for a web conference and conference call at 10 a.m. CT Thursday, Dec. 17. To access the online meeting, click here. If asked, enter the meeting number 716 550 107 and password bbva1234. For the conference call, dial 1-877-768-4036 or 1-972-932-2100 and enter access code 716 550 107. A question-and-answer session will follow the presentation.
Led by BBVA Compass Chief Economist Nathaniel Karp, the bank's research team analyzes the U.S. economy and Federal Reserve monetary policy. For its analyses, the economists create models and forecasts for growth, inflation, monetary policy and industries. The economic research team also follows a variety of issues that affect the Sunbelt states where BBVA Compass operates. Follow their work on Twitter @BBVAResearchUSA and @BBVACompassNews. Any statement or opinion of a BBVA Compass economist is that economist's own statement or opinion and does not represent a statement or prediction by BBVA Compass, its parent companies or management.
About BBVA Group
BBVA Compass is a subsidiary of BBVA Compass Bancshares Inc., a wholly owned subsidiary of BBVA (NYSE: BBVA) (MAD: BBVA). BBVA is a customer-centric global financial services group founded in 1857. The Group has a solid position in Spain, is the largest financial institution in Mexico and has leading franchises in South America and the Sunbelt region of the United States. Its diversified business is geared toward high-growth markets and relies on technology as a key sustainable competitive advantage. Corporate responsibility is at the core of its business model. BBVA fosters financial education and inclusion, and supports scientific research and culture. It operates with the highest integrity, a long-term vision and applies the best practices. The Group is present in the main sustainability indexes. More information about the BBVA Group can be found at bbva.com.
About BBVA Compass
BBVA Compass is a Sunbelt-based financial institution that operates 672 branches, including 341 in Texas, 89 in Alabama, 77 in Arizona, 62 in California, 45 in Florida, 38 in Colorado and 20 in New Mexico, and commercial and private client offices throughout the U.S. BBVA Compass ranks among the top 25 largest U.S. commercial banks based on deposit market share and ranks among the largest banks in Alabama (2nd), Texas (4th) and Arizona (4th). BBVA Compass has been recognized as one of the leading small business lenders by the Small Business Administration, and its mobile app recently earned the Mobile Banking Leader in Functionality Award for the second consecutive year from Javelin Strategy & Research. Additional information about BBVA Compass can be found at bbvacompass.com, by following @BBVACompassNews on Twitter or visiting newsroom.bbvacompass.com.
Editor's Note: BBVA Compass is a trade name of Compass Bank.
SOURCE BBVA Compass