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News - 24 December 2005
More productive in America!

UK productivity slumps

Annual productivity growth fell to its lowest level in fifteen years in the third quarter of this year according to the Office for National Statistics (ONS) at a time when the government has made it clear that “productivity is the fundamental yardstick of our economic performance” (Gordon Brown).

In the three months to the end of September productivity per worker was less than half a percent better than in the same period in 2004. In some sectors e.g. electrical and optical equipment, productivity actually declined by 3%.

The Chancellor has pinned the UK’s ability to compete in the global marketplace on increased innovation and productivity but progress on closing our productivity gap with the rest of the world would appear to have stalled at least temporarily. British workers produce an average 10% less than the rest of the Group of Seven industrialised nations and 24% less than the USA.


While it is easy to see why we lag behind the USA (a country where the average worker gets two weeks holiday but often doesn’t take all of it!), it is difficult to explain the disparity between the UK and the rest of Europe.

We have had much more stability in our economy for a lot longer than most of the Eurozone and we have much freer labour market regulations but we still lag behind countries like France with their 35-hour week and almost national close down during August!

It is tempting to conclude that structural differences account for some if not all of the disparity e.g. transport problems and skills levels.

The regional development agency – SEEDA – are reviewing the regional economic strategy (RES) for the south east and promoting increased productivity and entrepreneurship will form an important part of it. The Brighton & Hove Economic Partnership (BHEP) will be consulting on the strategy and making a formal response.

For more details of the RES click on the link below. For more information about the local consultation process click on the consultation icon on the left hand side of the page or contact Tony Mernagh on 01273 735062.

Read related items on:
Regional Economic Strategy
Brighton & Hove Economic Partnership
Brown, Gordon

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