Productivity: Key Economic Indicators

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 Q1 2024, productivity was estimated to be 0.1% higher compared with a year ago (Q1 2023), according to the latest Office for National Statistics (ONS) flash estimate. Productivity was down by 0.3% compared with the previous quarter and was 1.0% higher compared to before the pandemic in Q4 2019.

Historically, UK labour productivity has grown by around 2% per year but since the 2008/2009 recession it has risen more slowly (see chart above). The effects of the pandemic presented significant challenges in the measurement of productivity, but it appears the pre-pandemic trend of sluggish productivity growth has continued.

International comparisons

In 2022, ranked on GDP per hour worked, the UK came fourth highest out of the G7 countries, with the US and Germany highest and Japan lowest. UK productivity was around 16% below the US and Germany.