Week 13, 2012: UK Labour Productivity

Summary: UK labour productivity figures for the final quarter of 2011 were released this week, and although overall productivity dropped back slightly, manufacturing productivity is at a record high.

What does the chart show? This chart shows a seasonally adjusted index of labour productivity in terms of output per hour worked, with 2008 as the base year. The red line represents the figure for the whole economy, while the blue line is just for the manufacturing sector.

Why is the chart interesting? After a decade of labour productivity growth between 1997 and 2007, output per hour worked in the whole economy has now not changed very much for four years. There was a brief bump in the second and third quarters of 2011, but those gains have now been lost again. Contrast this with what is happening to productivity in the manufacturing sector. It had the same decade of growth and then the dip in 2008, but since then has improved steadily to reach record levels.

Note that because this is an index, the two lines are not directly comparable except for their shape; the data only tells you what current productivity is like within each sector compared to itself in 2008, and not to each other.