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Productivity: Key Economic Indicators

Published Wednesday, February 15, 2017

Latest statistics showing changes in UK productivity and comparisons of UK productivity with other G7 countries.

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One of the most important factors in determining living standards is productivity – how much output is produced for a given input (such as an hour of work).

The more efficient the economy is, the more that can be produced in a sustainable fashion. In other words, higher productivity growth leads to a higher long-term growth rate of the economy.

Economic theory states that labour productivity also determines wages: the more productive an employee is, the more they are likely to be paid.

UK productivity

The average increase historically in the UK has been about 2% but in the seven years since the recession began, productivity has stagnated. The Office for National Statistics in March 2015 said this is “unprecedented in the post-war period”.

UK productivity level

Productivity across the whole UK economy increased by 0.3% in Q4 2016 compared with the previous quarter, and by 1.6% compared with a year ago (data based on first ‘flash’ ONS estimates). In 2016 as whole, productivity was up by 0.6% compared with 0.9% the year before.

International comparisons

in 2015, ranked on GDP per hour, the UK came equal fifth highest (with Canada) out of the G7 countries, with Germany top and Japan bottom. UK productivity was 18 percentage points below the average of the rest of the G7 countries, the same productivity gap as in 2014 and the largest since at least 1991 (when the ONS data series began).


Commons Briefing papers SN02791

Author: Daniel Harari

Topics: Economic situation, Employment

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