UK productivity levels higher than feared after measurement change

The UK’s much maligned productivity levels are much better than previously
thought after authorities changed the way international figures are measured.

Revisions to the ‘International price comparison data’, which is used to
calculate output, shows that rather than being in the doldrums, UK productivity
has steadily improved over the past decade.

According to the revised figures, the UK has now caught up with Germany
although it is still 13 per cent behind the G7 nations as a block.

New figures published by the Office for National Statistics found that
relative to other G7 countries, GDP per worker in 2002 was 112.8, compared with
116.5 under the old system.

Chief economist John Philpott of the Chartered Institute of Personnel and
Development said the figures were good news, but shouldn’t mask the gap that
still remains.

"As a country we’ve been beating ourselves up about productivity, but
it seems we’ve been doing better than we had thought," he said.

"There’s still a big gap with the G7 and we’re around 20 per cent
behind the Americans, so there’s no room for complacency."

He said that a long period of economic stability had helped the UK catch up
with Germany, which has long been seen as a byword for efficiency.

"It seems that business has got the message about training and more
effective people management," he added.

The DTI has made improving productivity one of its major priorities and last
year recruited US economic guru Michael Porter to investigate the problems
specific to British business.

By Ross Wigham

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