Data released by the ONS earlier in February — the first ‘stand-alone commentary’ containing estimates of regional labour productivity and industry by region productivity — show that output per hour varied significantly across the UK’s regions and countries in 2018, with London being 31.6% above the UK average and Wales 17.2% below; all other regions were between these figures, and the distribution of output per job followed a similar pattern.
The ONS (
www.ons.gov.uk) says productivity grew in half of the 12 regions and countries of the UK, with output per hour increasing in both Scotland and the East Midlands by more than 2%; in contrast, output per hour fell in Yorkshire and The Humber and in Northern Ireland by at least 2%.
Taking into account the share of hours worked across regions, the South East and Scotland each contributed 0.2% to overall growth in output per hour in the UK; this contrasts with Yorkshire and the Humber, where a contraction in output per hour reduced overall UK productivity by 0.2%.
Responding to the latest ONS figures, Tej Parikh — chief economist at the Institute of Directors (
www.iod.com) — said: “The chasm in productivity across the UK’s regions is holding back our economy.
“Without significant investment out-side London and the South East, the rest of the country will continue to lag behind, eating into the UK’s overall potential.
“More funding should go towards developing our regional skills systems, and enhancing the role our world-class universities play in local economies can be the starting point.
"Upgrading existing local road and rail links and our digital infrastructure must be a priority, alongside enhancing connections between our towns and cities.
“The benefits of ‘big-ticket’ infrastructure improvements — though crucial — won’t be felt immediately.
"We need greater regional investment incentives for new and growing firms to help catalyse innovation and jobs growth.
"The Government’s emphasis on ‘levelling up’ regional growth has hit the right note, but the action needed to achieve this can not come soon enough.”
Other proposals to ‘level up’ the regions can be found in a recent IoD report on ‘Connected Economies, People, and Places’.