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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).

UK labour productivity

In Q2 2021, productivity rose by 0.1% compared with the previous quarter. Productivity was 1.3% higher in Q2 2021 than before the pandemic (Q4 2019).

The effects of the pandemic present significant challenges in the measurement of productivity. This likely means underlying productivity trends will be difficult to discern for some time.

UK productivity level since 2000

Historically, UK labour productivity has grown by around 2% per year but since the 2008/2009 recession it has stagnated (see chart above).

International comparisons

In 2019, ranked on GDP per hour worked, the UK came fourth highest out of the G7 countries, with France and the US top and Japan bottom. UK productivity was around 17% below the US and France.

G7 comparisons of labour productivity in 2019

Evidence from the OECD (incorporated in the data above) show that the UK’s productivity gap with the G7 average is not as great as was previously thought, due to the different ways countries measure hours worked. The ONS is exploring this research and plans to recommence publishing its international comparisons of productivity bulletin later in 2021.

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