Productivity woes continue as ONS shows UK 18 percentage points behind G7 average

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UK Productivity is lagging by an average of 18 percentage points behind other G7 nations, according to figures revealed by the Office of National Statistics (ONS).

The UK has also fallen 36 percentage points behind G7 leader Germany in the productivity stakes, according to the ONS International Comparison of Productivity. In both cases the productivity gap is wider than at any point since comparative records began in 1991.

The research measures productivity in 2014. Japan, itself in the midst of a long-term productivity crisis, is the only G7 member to fare worse than the UK in the report. The GDP per hour worked is 16 percentage points behind the UK.

However, the UK remains four percentage points behind the nearest country Canada and 30 behind the US.

For the first time there is data in the report on sub-sectors in the economy. UK manufacturers trail their German counterparts, with an output per hour deficit of 24 percentage points. Perhaps as a consequence, British workers in the industry work 20% more hours than those in Germany.

The report comes only weeks after a report by the Department for Business, Innovation and Skills (DBIS) questioned the government’s strategy to increase productivity, saying it “lacked focus“.

DBIS committee chair and MP Iain Wright called productivity "the pressing economic challenge of this parliament".

“The analysis in the government’s plan is good, but the milestones for implementing improvements are virtually non-existent,“ he warned.

“If the productivity plan is going to avoid collecting dust on Whitehall bookshelves and having a legacy of being seen as worthy but useless, then the government needs to back it up by setting out how these policies are going to be implemented and how their success will be measured."