Productivity Measurement Analysis series – insights from Q3, 2023
The Productivity Measurement Analysis series, authored by experts in the Institute’s Productivity Lab, reports on productivity trends in the UK, United States and the Euro Area, following the reporting of national statistical agencies. More so than with most other measures, the long-term trend in productivity growth is a critical element of economic growth.
Analysis of productivity for Quarter 3, 2023
Another poor quarterly performance for productivity for the UK by Professor Raquel Ortega-Argilés
Office for National Statistics flash estimates of productivity show a decline in productivity growth for Q3 2023 compared to the previous quarter (Q2) and the same period in 2022. In particular, UK productivity per hour worked appears to be below the same quarter a year ago (-0.3) and quarter-on-quarter (-0.2), as is the UK output per worker growth (-0.1 quarter-on-year and -0.2 quarter-on-quarter). The analysis also includes comments from the Institute’s managing director in The Guardian about the figures.
U.S. productivity increases at the fastest pace in three years by Martin Fleming
American nonfarm business sector labour productivity increased 5.2% in the third quarter of 2023. The increase in labour productivity is the highest rate since the third quarter of 2020, when productivity increased 5.7%. From the same quarter a year ago, nonfarm business sector labour productivity increased 2.4%. The substantial jump in third quarter productivity growth is largely a result of continued readjustment in the aftermath of the pandemic – supply chains are repairing, goods and services markets are normalising, and labour markets are stabilising.
Labour productivity in the Euro Area largely unchanged by Klaas de Vries
Labour productivity in the Euro Area, defined as real GDP per hour worked, was largely unchanged in the third quarter of 2023 compared to the previous quarter. The common currency bloc noted a slight increase when the Irish figures are excluded from the aggregate, as the Irish GDP data tend to be quite volatile due to profit-shifting behaviour by US multinationals. The Euro Area economy has weakened substantially over the past few quarters under the weight of tighter monetary policy, slowing export markets and low consumer confidence. The weak economic environment is likely also slowly starting to spill over into the labour market.
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Read the Q2, 2023 analysis for
The Productivity Lab is The Productivity Institute’s data science centre of excellence, the “engine room” for collecting, disseminating, and producing productivity data.