Gross value added labour productivity

Labour productivity measures how efficiently value is generated from the production of goods and services. It is calculated by dividing the output value by a measure of labour input. Gross value added (GVA) per hour worked is typically used to measure labour productivity. Increasing productivity is key to economic growth in the long term. Raising productivity can be achieved by increasing output relative to the labour needed to produce that output.

The GVA per hour figures (smoothed) are at current market prices, meaning that they are not adjusted for inflation. These figures are useful for in-year comparisons across areas. The real terms change in GVA per hour figures (unsmoothed) reflect the annual change in GVA per hour, adjusted to remove the effects of inflation. These figures are useful for cross-year comparisons within-areas. Smoothing is used to reduce the volatility in estimates, but it is not applied to inflation-adjusted figures. Some caution should be used when interpreting figures for smaller geographies (further information is provided in the 'Limitations' section below).

The latest labour productivity figures are for 2023 and are provisional.

Key Figures

• In Lancashire-14, the current price (smoothed) GVA per hour worked was £37.25. This was lower than the North West (£39.31) and the UK (£41.87).
• On average, each hour worked in Lancashire-14 was 11.0% less productive than the national average.
• Out of the 46 international territory level 2 areas in the UK, Lancashire-14 was ranked 28th for GVA per hour.
• Compared to 2022, there was a real terms (unsmoothed) decrease in GVA per hour of 2.7% in Lancashire-14 (UK = -0.2%).

Labour productivity by local authority district (LAD)

South Ribble had the highest labour productivity, at £54.11 GVA per hour worked, followed by Ribble Valley (£42.53), Fylde (£40.98) and West Lancashire (£39.58). Only South Ribble and Ribble Valley had higher labour productivity than the UK, and Fylde and West Lancashire had higher labour productivity than the North West.

All other local authorities had labour productivity figures that were below the North West and the UK. Productivity was lowest in Blackpool (£30.25) and Blackburn with Darwen (£33.27).

Labour productivity by International Territorial Level (ITL)

At international territory level 3 (ITL3) within Lancashire-14, Mid Lancashire had the highest GVA per hour (£40.54), followed by Chorley and West Lancashire (£36.82) and Lancaster and Wyre (£36.57). Blackpool (£29.89) had the lowest labour productivity figure.

Within the North West, at international territory level 2 (ITL2), the highest labour productivity was seen in Cheshire (£43.73), followed by Greater Manchester (£38.58). Lancashire-14 (£36.50) had the third highest GVA per head in the North West.

Of the five ITL2 areas within the North West, there were real terms decreases in labour productivity in Cheshire (3.5%) and Lancashire-14 (2.7%) compared to the previous year. Out of the 46 ITL2 areas in the UK (including Northern Ireland), Lancashire-14 ranked 28th for GVA per hour and ranked 37th in real terms change in GVA per hour.

Source: Subregional productivity: labour productivity indices for local authority districts (LAD) and international territorial levels (ITL) from the Office for National Statistics.

Things you need to know about the data

The Office for National Statistics (ONS) publishes annual estimates of labour productivity, based on balanced gross added value (GVA) and hours worked, for subnational areas of the United Kingdom, including estimates for the Lancashire-14 International Territorial Level (ITL) 2 sub-region, the six smaller Lancashire ITL3 areas and the 14 Lancashire local authority areas. Further information on Lancashire's geographies can be found on the geography article.

The labour productivity figures are workplace-based, meaning that they are allocated to the region in which the economic activity takes place. The UK figure excludes extra-regio (activity that cannot be assigned to a specific country or region).

The labour productivity figures are at current market prices and are smoothed. Smoothed data use a weighted moving average of up to five years. This includes the year in question, and the two previous and two subsequent years, where possible. This reduces volatility in the data that arises from smaller sample surveys.

The real terms change in labour productivity figures, or chained volume measures (CVM), are calculated using chain-linking methods to remove the impact of inflation. These figures are unsmoothed to avoid multiple averaging of data, since the figures are already chain-linked. These figures may be more volatile as a result – see limitations below.

Limitations

Not all changes in productivity estimates represent "true" changes - the figures can reflect volatility in sampling and non-sampling errors, particularly at smaller geographies.

The current price labour productivity figures are smoothed to reduce volatility. However, since these figures are not adjusted for inflation, they do not differentiate between the effects of price changes and quantity changes across time. The current price data are useful for in-year comparisons between different areas.

The real terms change figures are adjusted for inflation to estimate whether there has been any increase in volumes of goods and services with the effects of changes in prices removed. The real-terms change figures are useful for cross-year comparisons within an area. However, since these figures are unsmoothed, they may be more volatile, particularly at smaller geographies. Due to high volatility within the data, the local authority dataset only includes the smoothed figures.

Page updated 3 October 2025