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Productivity grows in second quarter but UK still far behind other G7 economies

Published 06/10/2016

Output has slowed to just 0.1% per quarter since the start of the recovery
Output has slowed to just 0.1% per quarter since the start of the recovery

Productivity in the British workforce has returned to pre-financial crisis levels, but is still lagging behind other major economies, according to new data.

Estimates for the second quarter show that output per hour grew by 0.6%, up from 0.5% in the first quarter, the Office for National Statistics (ONS) said.

On average, output stood at 0.5% in the decade leading up to 2008, but this has slowed to just 0.1% per quarter since the start of the recovery.

Howard Archer, chief UK and European economist at IHS Global Insight, said: "Some very welcome, much-needed good news for the UK as productivity improved appreciably in the second quarter, after a pick-up in the first quarter. This followed a disappointing serious relapse in the fourth quarter of 2015."

However, the ONS statistics also show that productivity in the UK was 18% lower than the average for the rest of the G7 advanced economies in 2015.

The ONS said: "While the more recent productivity slowdown has been observed across the advanced economies, the UK's productivity gap to some of these countries has been highly persistent and has grown in recent years.

"UK productivity was around 27, 30 and 35 percentage points lower than in France, the USA and Germany respectively."

Mr Archer said the UK "has a lot of catching up to do".

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From Belfast Telegraph