Productivity in the UK is falling as the US workers continue to outstrip the output of their Europe peers, according to new figures. Annual research by global business organisation Conference Board, found that UK productivity growth rates fell from 2.3% in 2004 to 0.9% in 2005. This leaves the UK as far behind France and Germany as it has been since 1997, despite Gordon Brown’s explicit recognition that higher productivity is key to keeping Britain’s economy healthy. The 15 long-standing members of the European Union saw an average growth of 0.5% compared to 1.8% in the US. The real growth came from the emerging markets of Central and Eastern Europe and Asia. Figures showed big growth in: Bart van Ark, director of Conference Board’s international economic research programme and co-author of the report, said the significant acceleration in productivity growth was striking as average productivity growth in China had been just 3.1% between 1995 and 2000. “This suggests that the dramatic changes in reform policies and the increase in openness before China’s accesion to the World Trade Organization showed their major impact during the most recent years,” he said. Van Ark said that the future of European economies would depend more on the structural characteristics of countries” economies. “These include the flexibility of labour and product markets, which foster the reallocation of labour and capital from less to more productive economic activities,” he said.
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