Money
UK's new productivity method shifts blame for post-crisis slowdown to fewer hours worked
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The UK's statistics office says a new way of measuring productivity changes the story of the slowdown after the financial crisis. Falling average hours worked now play a bigger role, and slower output per hour a smaller one.
0.5%increase in the estimated level of UK nominal GDP in 2024 after better service-sector data
The facts
- 1Productivity means output per worker. The ONS says its new method combines several data sources and international best practice to explain a significant part of the long-running UK productivity puzzle.
- 2Data still show a slowdown in UK productivity after the financial crisis. What changes is the split of causes between fewer hours worked and slower growth in output per hour.
- 3Linked payroll records from HM Revenue & Customs showed a stronger post-pandemic jobs recovery and a smaller, shorter rise in economic inactivity than the Labour Force Survey alone suggested.
- 4Richer data from the Annual Survey of Goods and Services revealed a larger service sector, raising the estimated level of nominal GDP in 2024 by 0.5%.
- 5The new productivity method enters headline estimates in November, with regional and industry breakdowns due early next year, so current figures are not yet fully updated.
Why it matters
Diagnosing why output per worker slowed matters because fewer hours worked and slower output per hour point to different explanations. The new method gives a different picture to test.
