Latest statistics showing changes in UK productivity and comparisons of UK productivity with other G7 countries.Jump to full report >>
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.
Historically, UK labour productivity has grown by around 2% per year but since the 2008/2009 recession it has stagnated. The level of labour productivity in Q3 2018 was 1.5% above what it was over 10 years earlier in Q4 2007 (the pre-recession peak level).
Productivity fell by 0.4% in Q3 2018 compared with the previous quarter, as hours worked increased faster than economic growth. This follows a rise of 0.5% in the previous quarter. Compared with a year ago, productivity was up by 0.1% in Q3 2018, down from 1.4% in Q2 2018.
In 2016, ranked on GDP per hour worked, the UK came fifth highest out of the G7 countries, with Germany top and Japan bottom. UK productivity was 16% below the average of the rest of the G7 countries, the largest since at least 1995 (when the ONS data series began).