Britain is the sick man of the G7 on productivity

Productivity growth is what makes nations and workers rich – productivity rises when the same people working the same hours create more output, and it is a crucial indicator of progress.

 

But since the financial crisis Britain’s performance has been appalling.

 

In the five years from 2007 to 2013, output per hour worked stayed flat, a terrible flop after years of growing at around two per cent per year.

 

Even worse than that, Britain has been slipping behind its rivals.

 

This ONS chart shows Britain’s terrible performance against the other G7 nations, our key competitors.

 

Break it down further and the picture is even worse.

 

Britain’s productivity is weaker than every other G7 nation's except for Japan, with even long-struggling economies like Italy maintaining a lead of almost 20 per cent above the UK.

 

There is one spot of light at the end of this tunnel.

 

These numbers only go up to 2012, and since then the recovery has kicked in, output is rising and firms seem to be investing once more, replacing old machines and boosting productivity at long last.