Guide to

Measuring Productivity
What we produce and the wages it costs
Productivity and Unit Wage Costs are key economic indicators used to measure the efficiency and competitiveness of the economy. They are constructed as ratios of other indicators and are published as indices. Three measures of productivity are produced: output per worker, output per filled job and output per hour worked.

UK output per worker is calculated at the whole economy level only and is the ratio of Gross Value Added (GVA) at basic prices and Labour Force Survey (LFS) total employment.

Output per job is defined as GVA at basic prices divided by productivity jobs, and is used to provide productivity estimates by industry. Business surveys of jobs are used as the main data source for productivity jobs since they provide a more precise allocation of the share of jobs to surveyed industries. However, to enable coherence with the output per worker measure, the employees part of productivity jobs is constrained to equal the employees part of whole economy Labour Force Survey jobs.

UK output per hour worked is the ratio of GVA at basic prices and productivity hours worked. Productivity hours worked is derived by multiplying the productivity jobs series at industry level by the average actual hours worked for the industry, derived from the LFS. Results are scaled to ensure the whole economy productivity hours equal the appropriate LFS hours total.

Productivity data are published in the quarterly Productivity First Release and cover UK whole economy, production and manufacturing.

For the whole economy, unit wage costs are the ratio of average wages and salaries for employees divided by output per worker. To measure this for manufacturing, the Average Earnings Index (AEI) for manufacturing is divided by manufacturing output per job.

Other productivity data series include the annual whole economy productivity estimates (published by Government Office Region), and international productivity data. These use the same definitions given above but different data sources, in order to, for example, maintain comparability across countries.

Produced by the Office for National Statistics
For more information, email: productivity@ons.gov.uk

Published on 9 December 2004

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