For the past decade, average productivity growth has been negative. This is unusual, if not unique, historically. You would have to go right back to the th  18 century to see a similarly lengthy period of stagnant productivity. Global Productivity Trends  If UK productivity patterns are unusual relative to the past, how unusual are they relative to other countries? To assess that, I draw on a panel of around 116 countries, advanced and emerging, going back to 1950, using data from the Penn World Tables. 36  Chart 7 plots average TFP growth across the whole sample of  countries, while Chart 8 does so separately for advanced and emerging economies. Several interesting features emerge. First, the slowdown of productivity growth has clearly been a global phenomenon, not a UK-specific one. From 1950 to 1970, median global productivity growth averaged 1.9% per year. Since 1980, it has averaged 0.3% per year. Whatever is driving the productivity puzzle, it has global rather than local roots. 34 35 36  Helpman et al (1998). Comin and Mestieri (2014). Feenstra et al (2015). 8  All speeches are available online at www.bankofengland.co.uk/speeches  8  Second, this global productivity slowdown is clearly not a recent phenomenon. It appears to have started in many advanced countries in the 1970s. 37  Certainly, the productivity puzzle is not something which has  emerged since the global financial crisis, though it seems the crisis has amplified pre-existing trends.
25  All speeches are available online at www.bankofengland.co.uk/speeches  25  Chart 10: Distribution of productivity levels across 44 countries relative to the US  Source: Penn World Tables 9.0 and Bank calculations. Notes: Median TFP level at current PPPs; US TFL level = 1; sample of 44 countries. Chart 11: Productivity level relative to the US, by region  Source: Penn World Tables 9.0 and Bank calculations. Notes: Median TFP level at current PPPs; USA = 1. 26  All speeches are available online at www.bankofengland.co.uk/speeches  26  Chart 12 – Convergence coefficient  Source: Penn World Tables 9.0 and Bank calculations. Notes: The coefficient can be interpreted as follows: for every 10ppt TFP gap compared to the US, TFP growth is x percentage points faster than in the US. Chart 13: Productivity across sectors  Source: ONS and Bank calculations. 27  All speeches are available online at www.bankofengland.co.uk/speeches  27  Table 2: Contributions to annual labour productivity growth  Source: ONS and Bank calculations. Chart 14: The standard deviation of productivity across industries  Source: EUKlems productivity database, ONS and Bank calculations. Notes: The chart excludes the mining & extraction, energy and real estate industries. 28  All speeches are available online at www.bankofengland.co.uk/speeches  28  Chart 15: The variance of productivity within and across industries  Source: ONS Research Database and Bank calculations. Notes: This work contains statistical data from the ONS which is Crown Copyright.