Skip to content

Video Summary: Labour Productivity

Released: 24 December 2013

Also in this release

Transcript – Labour Productivity

This is a transcript of the video podcast which can be viewed at:

youtu.be/-0sbAf7xaMg

This is a short video looking at labour productivity in the third quarter of 2013.

What is Labour Productivity?

Labour Productivity measures the amount of economic output that is produced by a unit of labour input.

It is the main determinant of national living standards. An increase in labour productivity means that a greater output of goods and services can be produced from a given set of labour inputs.

It can be determined in terms of output per worker, output per hour worked, and output per job. Output per hour worked is the preferred measure of the ONS as it takes into account different hours worked by individuals in the economy.

Output per Hour after Recessions

We will now look at how output per hour has changed, per quarter, after the recessions of 1973, 1979, 1990 and 2008, using this chart.

Shortly after the end of the 1973, 1979 and 1990 recessions, output per hour began to grow strongly, however, since the 2008 recession, shown by the black line, output per hour has continued to fall.

For the 1990 recession, output per hour exceeded its pre recessionary level within three quarters. After the 1973 and 1979 recessions, output per hour exceeded its pre recessionary levels in 6 quarters. As we enter the 23rd quarter after the 2008 downturn, output per hour has not yet reached its pre recessionary level.

The Productivity Conundrum

Next we will use this chart to illustrate the productivity conundrum. It illustrates changes in output, shown in red, hours worked, shown in green, and productivity, shown in blue, which have been indexed to the first quarter of 2008. So above the 100 axis line, the level is above that of Q1 2008, and below the axis means that the level is still below its pre recessionary levels.

The chart shows that while hours worked recovered to its pre recessionary value in the third quarter of 2012, output, whilst growing, is still 1.9 percentage points below its pre recessionary value, and productivity is still 4.4 percentage points below its pre recessionary value.

Output per Hour Q3 2013

Now we will look at how output per hour has changed, per quarter, from the 2008 recession until the third quarter of 2013, shown by the blue bars. It also shows how it has changed compared to the same quarter a year ago, shown by the red line.

UK labour productivity decreased by 0.3% in the third quarter of 2013, shown by the black circle. The change on the quarter a year ago was an increase of 0.1%, shown by the black arrow.

Regional Productivity

We can also look at the relative productivity in terms of output per job and output per hour across UK regions. We can compare productivity across 12 regions; 9 in England, then Wales, Scotland and Northern Ireland. If we look at output per hour across these regions, where the UK average is indexed to 100, we can see that only South East England and London are above the UK average.

END

 

This is a short video looking at Labour Productivity.

Source: Office for National Statistics

Background notes

  1. Details of the policy governing the release of new data are available by visiting www.statisticsauthority.gov.uk/assessment/code-of-practice/index.html or from the Media Relations Office email: media.relations@ons.gsi.gov.uk

Content from the Office for National Statistics.
© Crown Copyright applies unless otherwise stated.