Tortoise UK gains on the Euro-hares
Productivity is growing faster than in France or Germany but Britain is still lagging behind. By Roland Gribben
Productivity in Britain is growing at a faster rate than in Germany and France, according to new data analysed by the National Institute of Economic and Social Research (NIESR).
Both European rivals still achieve higher productivity levels, but Britain is at last narrowing the gap with the help of the booming financial and market services sectors and a more buoyant economy. The UK, however, has yet to complete the transition from "tortoise to hare".
The long awaited improvement will be welcomed by the Chancellor who has made productivity a key priority, but the pick-up owes as much to new analytical techniques in measuring changes as a better performance and investment in factories, shops and offices.
Fresh data processed by a new EU system has provided a more detailed insight into productivity changes and the contribution from sectors that traditionally have been difficult to analyse such as IT and communications and financial services. The rapid switch to a service-based economy with the rapid decline of manufacturing has added to the difficulties of gauging productivity changes and trends, but the database provided by the EU KLEMS project is helping economists to make more accurate measurements.
The results show that while the productivity gap with the US remains considerable, Britain is now performing better in terms of employment and productivity growth than either Germany or France.
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