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UK struggles to keep pace with G7 as productivity gap widens

The productivity gap between the UK and other western economies has widened to its worst level since records began, figures from the Office of National Statistics have shown.

Output per hour worked in the UK in 2014 was 18% lower than the average for the rest of the G7 group of advanced economies, which is the worst since the government started collating comparable figures in 1991.

Against individual countries the figures make even worse reading, with a 36% productivity gap with Germany, a 30% gap with the US and a 31% gap with France.

Only Japan, whose productivity was 16% lower, fared worse than the UK.

UK productivity has shown a marked decline since the onset of the financial crisis and recession and, with traditional manufacturing industries like steel becoming increasingly troubled, the outlook could get even worse.

Commenting on the figures, TUC General Secretary Frances O’Grady, believes the poor productivity showing highlights the lack of quality job creation.

He said: “For all the good news on rising employment, the UK is still not creating enough quality jobs. The yawning productivity gap between us and other countries shows how much room there is for us to do better.

“The loss of middle-income jobs, in vital industries like steel, is holding the economy back and dragging down pay.”

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