UK productivity: below G7 average

<p>ONS says output per hour was 20 per cent below the G7 average.</p>

Official figures have shown that the UK's productivity was lower than the rest of the G7 countries in 2014.

According to the Office for National Statistics (ONS), the country's output per hour in 2014 was 20 per cent lower than the G7 average. This represents the biggest lag since 1991 when the ONS started making comparisons.

The figures put the UK significantly behind the US, Germany and France in terms of productivity. According to the report, workers in these countries were 32-33 per cent more productive than those in the UK. For example, it would take a UK worker four hours to produce the same work done by a German in three hours.

Italy was ten per cent more productive than the UK, while Canada was four per cent more productive. The only G7 country to score worse on productivity was Japan – it was 15 per cent behind the UK.

ONS chief economist Joe Grice said that the figures show how UK productivity "continues to lag behind other developed economies".

He added: "Since the economic downturn, productivity growth has slowed in most developed economies, but by more in the UK than the average."

Living standards

Many experts believe that improving productivity can help to increase living standards.

Economist Howard Archer told the BBC that British productivity had been down since the financial crisis due to the creation of many low-skilled and low-paid jobs where productivity is limited.

Others believe that the focus should be on agility, rather than productivity.

James Sproule, chief economist at the Institute of Directors explained: "The economy of the future looks set to be dominated not by big companies, but by fast, agile, quick-moving and reactive ones."

He added that when firms can respond to customer demands effectively and bring new products and services out quickly, the market will "reap the rewards".

BBC analyst Andrew Verity pointed that improving productivity shouldn't be about workers working harder. He says that investment – in plant, machinery, skills and public infrastructure - is much more decisive in improving how much each worker produces.

He also noted that data from the ONS in July indicated a sharp pick-up in the UK's productivity, which coincided with an increase in investment. "But if we're going to catch up with the rest of the G7, we'll have to sustain that for years," he added.

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