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Northamptonshire Analysis
The authority on Northamptonshire statistics

Labour Productivity Update

20 February 2018

The latest local statistics covering labour productivity for Northamptonshire and our basked of Economic Comparators can now be found in spreadsheet format on Northamptonshire Analysis by clicking here.

Labour productivity is a key driver of long term economic growth and higher living standards.

The ONS indicators look at Gross Value Added (GVA) Per Hour Worked and GVA Per Job Filled both in terms of monetary value and as a comparative index based on UK productivity.   According to the ONS, Gross Value Added is a productivity metric which measures the value of output less the value of intermediate consumption (input in the production process). They recommend concentrating on GVA Per Hour Worked as it is not affected by local working patterns as is the case for GVA Per Job Filled (so I am sticking with that recommendation!).

In this dataset the Northamptonshire data is split between the two NUTS3 EU economic geographies of West Northamptonshire (covering the boroughs/districts of Daventry, Northampton and South Northamptonshire) and North Northamptonshire (covering the boroughs/districts of Corby, East Northamptonshire, Kettering and Wellingborough).

In 2016 West Northamptonshire showed a GVA per hour worked (smoothed) value of £27.7 while the area of North Northamptonshire logged £26.5. This ranked the two areas of the county in 13th and 15th places (of 16) amongst our basked of economic comparators. Across England as a whole these levels of productivity ranked the two parts of Northamptonshire in 99th place (8th decile) and 120th place (10th, worst decile) amongst the 132 NUTS.3 geographies. Not the best of news.

Looking at the long term growth over 12 years from 2004 to 2016, it is clear that West Northamptonshire started at a low point but over this period has registered growth in productivity of a similar rate to surrounding areas. On the other hand North Northamptonshire started the timeseries in 2004 with better productivity than West Northamptonshire but, like Luton and Bedford, stalled heavily during the 'credit crunch', then fell behind West Northamptonshire in 2011 and has not really recovered any significant growth in productivity since. It is for this reason that North Northamptonshire performs in the bottom 10 NUTS.3 geographies when considering growth over the last six years but in the 8th decile for growth over the full twelve years.

A recent ONS Research Article explains that some industries naturally produce higher levels of productivity than others, but across the UK since the 'credit crunch' there has been a shift in employment to the less productive sectors. Additionally, some industries have decreased in productivity more than others, manufacturing being a case in point. It may be this double wammy in Northamptonshire's low wage, low skills economy which is impacting upon the productivity slowdown in the NUTS.3 North Northamptonshire area.

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