Whole Economy and Multi-Factor
The headline ONS measures of labour productivity are for the whole economy and manufacturing labour. These were established as the main measures in 2004 following a review of productivity methodology. Starting in 2007, ONS also began publishing experimental multi-factor productivity estimates.
The quality of productivity estimates depends on a number of factors. These include definitions, coverage and coherence of the input and output, as well as consistent measurement. Once these potential sources of error are accounted for, users are left with 'genuine' estimates of productivity differences over time, or between economic units, which can be related to economic effects. These are what policy makers aim to influence.
The discussion in the first part of this chapter presents historic UK productivity trends on a whole economy basis. It focuses on the ONS labour productivity series and relates the trends seen to the shift from manufacturing to services, the major structural shift in the composition of the economy over the period.
This chapter goes on to define the multi-factor productivity (MFP) concept. It describes the methodology and data required to produce MFP estimates, and ends by presenting and discussing recent results.
