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UK workers' output 'lagging further behind rival economies'

Published 18/09/2015

It would take a UK worker four hours to produce the same work done by a German in three hours, ONS figures show
It would take a UK worker four hours to produce the same work done by a German in three hours, ONS figures show
It would take a UK worker four hours to produce the same work done by a German in three hours, ONS figures show

The productivity of UK workers lagged behind that of rival advanced economies last year by the biggest gap since records began in 1991, official figures showed today.

A report from the Office for National Statistics (ONS) showed that by output per hour worked, the average performance of the G7 group of advanced economies was 20% ahead of that of the UK.

The figures showed that France, Germany and the US were 32-33% more productive than the UK. It means that it would take a UK worker four hours to produce the same work done by a German worker in three hours.

Italy was 10% more productive than the UK and Canada was ahead by 4% while Japan was 15% behind.

ONS chief economist Joe Grice said: "These figures show UK productivity continues to lag behind other developed economies.

"Since the economic downturn productivity growth has slowed in most developed countries, but by more in the UK than the average."

Productivity is a key measure because improving it is seen as the only way in a modern economy of creating a sustained rise in living standards.

Bank of England governor Mark Carney, who has expressed his frustration at the failure of productivity to improve, said earlier this year: "Productivity growth - doing more with less - is the key determinant of income growth."

Ministers have recognised that Britain lags behind in this area and launched a plan to try to improve productivity in the summer.

The ONS said output per hour grew modestly across the G7 as a whole in 2014 but a little more slowly in the UK.

It was lower in all the countries than would have been the case had pre-downturn trends continued since 2007, with this "productivity gap" at 18% for the UK compared with about 7% for the rest of the G7.

TUC General Secretary Frances O'Grady said: "Without a step change in productivity growth, the UK economy will struggle to deliver secure jobs and higher living standards.

"We need a better economic plan focused on higher public investment in modern infrastructure and workforce skills. A new round of severe public service cuts and pay freezes will keep the UK in the slow lane."

Howard Archer, chief UK and European economist at IHS Global Insight, said: "On the positive side, UK productivity does appear to be now seeing some much-needed improvement.

"A recent loss of momentum in the labour market may well be a sign that UK productivity is now seeing genuine improvement.

"With earnings growth stronger and recruitment difficulties building in some sectors, UK companies may well now be really stepping up their efforts to lift productivity by getting more out of their existing workers and also stepping up investment."

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