Week 38, 2013: International Comparison of Productivity

Summary: The ONS published their annual international productivity comparison this morning, which showed that the UK remains in 6th place within the G7 and has fallen to the lowest point relative to the G7 average since 1994.

What does the chart show? The chart shows national output (measured by GDP) per hour worked, relative to the UK, for the G7 countries over three time periods (1992 in blue, 2002 in red, and 2012 - the latest data available - in green). In each time period, the UK's productivity is equal to 100, so any number less than 100 represents a lower productivity than the UK, and vice versa.

Why is the chart interesting? Since the ONS records began back in 1990, the UK's productivity has never been spectacular compared to the rest of the G7 (our highest position was 4th for a brief period during the mid-2000s), with Japan being the only other country to have a consistently lower productivity over that period.  However, it worsened considerably as a result of the recession, when companies made the decision to keep workers on and try to weather the storm rather than fire them; a phenomenon that doesn't appear to have been mirrored in any other country.  Relative to the G7 average (excluding the UK), UK productivity has continued to get worse since the peak in 2006, even up to last year, when it hit the lowest point since the mid-1990s.  As you can see from the graph above though, the UK remains in a considerably better position than it did in 1992 (and we would expect it to improve in 2013 as GDP has grown and unemployment has remained broadly static).