From MoneyWeek · · 1m 30s
UK Productivity Puzzle Resolved
ONS revises productivity measure, showing UK growth at 1.3% annually.
In brief
ONS revises productivity measure, showing UK growth at 1.3% annually. UK productivity growth revised to 1.3% annually from 2009-2019, higher than previously thought but still below pre-crisis levels. Originally reported by MoneyWeek.
ONS updates productivity measurement
The Office for National Statistics changed how it measures productivity, economic output per hour worked.
Revised growth rate 1.3% annually
The government's official statisticians now estimate the rate of growth in the decade following the global financial crisis, from 2009-2019, was 1.3% each year, on average.
Previous method flawed
The ONS previously calculated total hours worked from the Labour Force Survey, which became unreliable with low response rates.
New component method used
The ONS now uses a component method drawing on Annual Survey of Hours and Earnings and other business surveys.
Productivity growth improved
Revised figures show output grew by 15.8% from 2008 to 2024 versus 8.7% under old methods.
Productivity still below pre-crisis
The revised annualised figure of 1.3% remains well below the pre-crisis average of 2%.
Resolution Foundation analysis
The Resolution Foundation found productivity grew 1.1% since Q3 2024 using RTI payroll data and self-employment tax returns.
Broad-based productivity recovery
12 of 19 sectors saw improved productivity growth in the past two years, including information and communications, retail, science, transport and health.
Productivity challenges remain
The UK still faces slow productivity growth, with output per hour 40.7% higher on new estimates versus 34% on old ones.
What it means
UK productivity growth revised to 1.3% annually from 2009-2019, higher than previously thought but still below pre-crisis levels.
