Business

London workers most productive in UK, says ONS

London commuters Image copyright Getty Images

The productivity conundrum has been one of the big issues of the economic downturn and the recovery.

Normally as equipment, infrastructure, education and training improve so does labour productivity, the amount we each produce per hour at work.

This time that doesn't seem to be happening.

To help understand the issues better the Office for National Statistics (ONS) has produced a regional breakdown of productivity and it makes for interesting reading.

As you might expect with all those high paid bankers, accountants, lawyers and foreign companies' headquarters, inner London has the highest productivity level in the UK.

The lowest productivity is in the most rural areas, and Cornwall and the Isles of Scilly have the worst.

The gap is huge, in Central London the average worker is producing 42% more every hour than the national average.

In Cornwall they produce 28% less than the national average.

There are of course exceptions to the rule, the productivity of North East Scotland is very good and impressive for such a remote area, until you remember that the North Sea oil industry is based there, with thousands of high tech and cutting edge engineering and oil companies.

'Hot spot'

Also some regions are also not that remote and yet are near the bottom of the productivity table, Lancashire, Staffordshire, West Wales and the Welsh valleys.

Which raises the question as to what these figures really show?

Some areas are remote and dependent on agriculture and tourism to a large degree and are unlikely to improve efficiency, so much as an oil company worker with a new drilling rig or a banker with a new multi million pound computer system.

But many of the regions that are doing poorly are places where old industries have been in long term decline and it is well known that removing skilled productive jobs from a local economy will reduce overall productivity levels.

The other key point is that international businesses and foreign companies investing here bring higher productivity levels.

That probably helps to explain much of London and Aberdeen's performance as well as two less obvious hot spots of high productivity: Derby and Swindon.

Swindon is home of Honda's car plant in the UK and Derby home of Toyota and Rolls Royce.

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