Scottish Government

Productivity - GDP per hour worked. Purpose Target.

Associated Target

To rank in the top quartile for productivity amongst our key trading partners in the OECD by 2017.

Brief Description

Increased competitiveness will be at the heart of a faster growing Scotland. Labour productivity (as measured by GDP per hour worked) provides an effective, internationally recognised and comparable measure of competitiveness.

Progress against the target will be measured by ranking Scotland's level of labour productivity against the countries of the OECD. Scotland currently ranks at the top of the third quartile.

Strategic Objective(s) to Which Indicator Relates

This indicator informs progress in relation to all five Strategic Objectives:

Wealthier and Fairer;
Healthier;
Safer and Stronger;
Smarter; and
Greener.

More Detailed Definitions

Definitions of Keywords

Labour productivity - defined as Gross Domestic Product ( GDP) per hour worked - measures the amount of goods and services (output) produced from an hour of work. The most productive economies can produce higher levels of output from an hour of work. Gross Domestic Product ( GDP) is a measure of the value added to materials and other inputs in the production of goods and services by resident organisations; before allowing for depreciation or capital consumption. In accordance with UK National Accounting principles, GDP figures for Scotland exclude output from the North Sea oil and gas sector. Output from this sector - termed "extra-regio" activity - is not attributed to any one area of the UK. Net receipts from interest, profits and dividends abroad are also excluded.

There are two measures of GDP, market prices and basic prices. The estimates produced for Scotland are measured in basic prices, which excludes taxes less subsidies on products (taxes on products include VAT and excise duties). Gross Value Added ( GVA) is another term for GDP at basic prices.

The Organisation for Economic Cooperation and Development ( OECD) is an international organisation helping governments tackle the economic, social and governance challenges of a globalised economy. The OECD currently has 34 member countries.

Evidence Source

Data for OECD countries will be taken from the Productivity Statistics Portal section of the OECD web site ( http://stats.oecd.org/WBOS/index.aspx). GDP per hour worked, for the most recent year, is estimated using GDP at current prices ($ US) and Purchasing Power Parities ( PPP).

The OECD only provide a figure for the UK. In order to estimate labour productivity in Scotland, regional accounts data from the Office for National Statistics ( ONS) are used to identify Scotland's productivity performance relative to the UK.

Baseline and Past Trends

The baseline year for this target is 2006 (calendar year). Data on output per hour worked for OECD countries can be found at: http://stats.oecd.org/WBOS/index.aspx.

A figure for Scotland is calculated using ONS data on levels of labour productivity in Scotland relative to the UK. The latest data can be found at: http://www.statistics.gov.uk/STATBASE/tsdataset.asp?vlnk=4858&More=Y.

Details on the most recent performance can be found on Scotland Performs, http://www.scotland.gov.uk/About/scotPerforms/purposes/productivity.

Methodology for Data Source

The OECD only provides productivity figures for the UK. In order to estimate labour productivity in Scotland, regional productivity data from the Office for National Statistics ( ONS) is used to identify Scotland's productivity performance relative to the UK.

The role of purchasing power parity ( PPP) in calculating international comparisons of labour productivity is to convert countries' national currencies into a common currency (here, US$) in order to account for differences in price levels between countries. This results in comparable measures of real output that can be used for international comparisons.

Data Ownership and Quality Assurance

The labour productivity measures by region are a National Statistics publication.

ONS provide the OECD with relevant data for the UK.

Publication of Data

Labour productivity data are provided annually be the OECD. The OECD productivity database only provides productivity levels data for the most recent year. In order to estimate productivity levels for earlier years the OECD recommend that their productivity growth series for member countries is used. This OECD productivity database can be found at, http://stats.oecd.org/WBOS/index.aspx.

Regional labour productivity figures, produced by ONS, are normally available in February/March each year.

Methodology for Recent Change Arrow on Scotland