How Sheffield City Region could be closer to national average on productivity than previously thought

Productivity in the Sheffield City Region could be closer to the national average than previously thought, according to a new report by Sheffield Hallam University.

James Muir, chairman of the Sheffield City Region Local Enterprise Partnership,

The report, Productivity in the Sheffield City Region, found that although output per head and output per job in Sheffield City Region are both well below the UK average, the efficiency of production in the local economy is far closer to the average.

Professors Christina Beatty and Steve Fothergill from the University’s Centre for Regional, Economic and Social Research used innovative estimates of the efficiency of production in the local economy which adjust for the mix of industries, occupations and hours worked to measure productivity.

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Productivity has become central to debates about regional and local differences in prosperity. The UK government’s aspiration to ‘level up’ the regions has become less about creating more jobs in the poorer parts of the country and more about raising productivity, by narrowing the gap with London and South East England.

On conventional measures of productivity, the city region achieves only 69 per cent of the national average Gross Value Added (GVA) per head and only 80 per cent of the national average GVA per job.

The new report found when GVA per job is adjusted for industry, occupational mix and hours worked, the city region moves substantially closer to the national average at 92 per cent and is not out of line with other urban areas outside London.

James Muir, chairman of the Sheffield City Region Local Enterprise Partnership, said: “This new research is welcome. It underlines the fact that, collectively, we need to take a new approach to tackling and ultimately overcoming the fundamental challenges we face in our economy here in the Sheffield City Region.”