What is productivity, how is it measured and why is it important?
These questions are a useful starting point from which we can define and explain the range of productivity measures ONS produces.
Productivity represents the relationships between inputs and outputs in the production process. As a practical concept, productivity helps define both the scope for raising living standards and the competitiveness of an economy. Productivity has therefore, an increasing role in formulating and assessing government policy.
This introductory chapter provides a definition of productivity along with an explanation of how and why it is used. It also covers the importance of productivity as an economic measure. Giving broad definitions of output and input and the challenges in measuring productivity, it goes on to explain the difference between levels and growth rates of productivity. Finally, the chapter outlines different measures of productivity, their uses and the links between them.