Productivity in most UK regions lags behind European levels, according to new research.
According to a survey of 170 regions by UK consultancy Business Strategies, London is the 16th most productive region, but other UK regions languish in positions form 103rd to 140th.
Business Strategies says the UK’s flexible labour markets offer employment opportunities to more marginal, less productive workers and that this is dragging the productivity average down.
Regions with less flexible labour markets tend to have more part-time jobs which also tends to depress the productivity ranking.
Dr Neil Blake, research director said, “The challenge which now faces policy makers is to ensure that moves towards higher productivity do not adversely affect employment rates.
“Raising productivity through a shift to higher value-added industries, including hi-tech manufacturing, software engineering and professional services must be a priority for many UK regions. This is especially true in the eastern region and the East and West Midlands where the mis-match between productivity and employment performance is most glaring.”