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Europe - UK had highest 'EU Big Four' productivity growth in September

07 October 2011

After nearly two-and-a-half years of productivity growth, the latest data indicated that output per worker in the European Union (EU27) declined in September 2011. The seasonally adjusted EU Productivity Purchasing Managers Index (PMI), published by research firm Markit, fell from 50.1 in August to 49.3. The fall in productivity was marginal, but nevertheless the first in 29 months.

Output per head contracted in both the manufacturing and service sectors during September. The decline in service sector productivity was the first since April 2009, following five successive months of slower growth.

Manufacturers registered another modest decline in output per head in the latest survey period, as the rate of contraction remained unchanged from August. The respective headline indices registered well below long-run averages in both sectors.

Overall gains in output per worker were recorded in three of the four largest economies in the EU, although the Eurozone as a whole registered a second successive decline. The strongest overall improvement was recorded in the UK, as the service sector posted modest gains during September. This was the first month since June 2009 that the UK was the leading EU 'big four' economy in terms of productivity growth.

Output per worker at Italian firms was the second-highest among the EU's largest economies. However, only a marginal overall rise in productivity was recorded, with the pace of expansion easing from August to its slowest rate since October 2009. Labour productivity gains in the manufacturing sector were modest, while the service sector posted only a marginal improvement.

Productivity growth in France was negligible during September, as the rate of expansion eased to its lowest in the current sequence of rises. Output per head in the manufacturing sector declined at the second-sharpest pace since February 2009.

German companies continued to post deteriorating productivity during September. Solid falls in output per head were recorded in both the manufacturing and service sectors.

Latest data highlighted productivity gains across 12 of the 23 monitored industries in September. This was the joint-lowest number of sectors registering an improvement in two-and-a-half years.

The telecommunications sector recorded the strongest overall rise in output per worker during September. The most severe worsening trends were recorded in the pharmaceuticals and healthcare sectors.

The EU27 includes Belgium (BE), Bulgaria (BG), the Czech Republic (CZ), Denmark (DK), Germany (DE), Estonia (EE), Ireland (IE), Greece (EL), Spain (ES), France (FR), Italy (IT), Cyprus (CY), Latvia (LV), Lithuania (LT), Luxembourg (LU), Hungary (HU), Malta (MT), the Netherlands (NL), Austria (AT), Poland (PL), Portugal (PT), Romania (RO), Slovenia (SI), Slovakia (SK), Finland (FI), Sweden (SE) and the United Kingdom (UK).

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