Productivity
Dynamic economy that shares prosperity
Released 15/09/2025
Metric
The current 20-year average labour productivity growth compared to the 20-year average growth 10 years earlier
Why this matters
Labour productivity (GDP per hours worked) indicates economic efficiency.
Labour productivity is a driver of economic growth, real wages, and overall living standards.
Short term movements in productivity are subject to volatility, so it is most appropriately examined by considering trends over time.
Progress
Long-term labour productivity growth (based on 20-year average annual growth rates) was steady between 2003-04 and 2015-16, but has slowed since then.
In 2023-24, the 20-year average annual growth rate was 0.8%. It has:
- slightly fallen from 0.9% in 2022-23
- fallen from 1.8% in 2003-04.
Average annual growth rate — specifically compound annual growth rate [CAGR] — is defined as:
\({\displaystyle \mathrm {CAGR} (t_{0},t_{n})=\left({\frac {V(t_{n})}{V(t_{0})}}\right)^{\frac {1}{t_{n}-t_{0}}}-1}\)
where \({\displaystyle V(t_{0})}\) is the initial value, \({\displaystyle V(t_{n})}\) is the end value, and \({\displaystyle t_{n}-t_{0}}\) is the number of years, in this case, 20.