On 28 June, the Office for National Statistics (ONS) released a publication revising productivity figures from 1997 to 2018.
Productivity growth was revised up in around a quarter of industries, predominantly manufacturing. On the other hand, growth was revised down in many services industries, with some notable exceptions such as the telecommunications industry.
Evidence for an overall slowdown in productivity growth persists but the size of the problem is smaller than previously estimated. Growth before the 2008 financial crisis has been revised down and growth after the financial crisis has been revised up.
Part of the reason for the change is a new method of measurement called “double deflation”. The ONS’s current estimates are calculated using single deflation which means a single price index (or deflator) is applied to each industry to correct for changing prices. It has now followed international best practice by implementing double deflation which uses different deflators for the inputs and outputs in each industry’s production process.
To read more, visit the ONS website.