The Office for National Statistics (ONS) has revised its measurement of economic output per hour worked, indicating that the UK's productivity growth in the decade after the global financial crisis was higher than previously understood. The ONS now estimates an average annual growth rate of 1.3% for the period between 2009 and 2019, an increase from the earlier figure of 0.7%.
This adjustment does not mean the UK's economic output was higher, but rather reflects a change in how statisticians estimate total hours worked. The ONS's new 'component method' draws on various sources, including the Annual Survey of Hours and Earnings, and accounts for annual leave, other absences, and overtime. This contrasts with the previous reliance on the Labour Force Survey, which reportedly became less reliable due to falling response rates and potential biases in reporting actual hours.
The revised figures suggest that people are more productive when working, even though average weekly hours are lower. For the period from 2008 to 2024, total output grew by 15.8% under the new method, compared to 8.7% with the existing approach. While this places the UK in the top half of G7 countries for productivity, the revised annualised figure of 1.3% remains below the pre-crisis average of 2%. Richard Heys, ONS deputy chief economist, noted that the new methodology does not alter the fundamental story of a productivity slowdown following the global financial crisis.
Separately, analysis from the Resolution Foundation, based on RTI payroll data and self-employment tax returns, suggests productivity has grown by an average of 1.1% since the third quarter of 2024. This follows an average fall of 0.7% in the two years prior and is described as a broad-based recovery across various sectors.