PRODUCTIVITY performance in this country is increasingly disappointing. Last year, the Labor Department reports, it rose less than 1 percent in the private business sector and, in the last quarter of the year, was actually falling. Productivity means output in relation to labor input, and a country's standard of living depends on it. As long as productivity rises slowly, people's incomes cannot do otherwise.

While improvements in productivity have slowed throughout the industrial world since the early 1970s, most of the other rich democracies continue to make much better progress than the United States does. The United States is still well ahead -- if not in every industry, at least for the economy as a whole. But it's not as far ahead as it used to be.

Comparisons are tricky and never exact. They require the translation of figures in yen, marks and so forth into dollars. Market exchange rates, swinging wildly, are useless for these measurements. Statisticians prefer a more complex calculation that compares, item by item, the actual purchasing power of each currency in its own country. Using that technique, the Labor Department tracks the gains by all of this country's leading competitors. The following table estimates some of these countries' productivity as a percentage of the U.S. level, for the years -- to give a bit of historical perspective -- 1971 and 1986.

-------------------------- 1971 ----------1986

Canada...................... 85 ............95

Japan....................... 46 ............69

West Germany................ 62 ............81

France...................... 64 ............84

Italy....................... 66 ............83

Britain..................... 59 ............70

Some countries -- Japan is the extreme example -- have fiercely high productivity in manufacturing, offset by low efficiency in retailing and service industries. Some countries -- most of the western Europeans -- have achieved high gains in productivity by closing obsolete industries and allowing unemployment to remain extremely high. The virtue of the American economy is that over these 15 years it has reliably and steadily created jobs for a labor force that, unlike Europe's, has been growing rapidly. But to put it another way, this economy has expanded in recent years chiefly by putting more hands to work, rather than by working more efficiently.

If the past pattern continues, most of these economies will converge at the same level of productivity some time around the turn of the century.