Productivity in Sheffield city region close to national average

Productivity in the Sheffield city region could be closer to the national average than previously thought, according to a new study.

The study by academics at Sheffield Hallam University found that while output per head and output per job in the region are both well below the UK average, the efficiency of production in the local economy is much closer to the national average.

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

But if the GVA per job figure is adjusted for industry, occupational mix and hours worked, the city region moves substantially closer to the national average at 92%, which is similar to other urban areas outside London.

The study also concluded that in terms of efficiency, the Sheffield city region is not out-of-line with England’s other main urban areas outside London, although there is no evidence it is catching up with the UK average.

It also found that Sheffield manufacturing sector has relatively low levels of productivity, which is concerning and relative to the national average, productivity across the region as a whole has been broadly stable over the last decade and a half.

‘For the moment, of course, concerns about productivity have been submerged by the coronavirus crisis and its damage to the economy,’ said report co-author, Professor Steve Fothergill.

‘But as the UK emerges from the crisis there is no reason to suppose that the big local and regional differences in productivity will have gone away. The post-crisis world will inherit much the same capital stock, workforce and infrastructure that was previously in place across the country – and with it, no doubt, much the same gaps in productivity.’

The chair of the Sheffield City Region Local Enterprise Partnership, James Muir, said the report ‘underlines the fact’ that ‘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.

‘With coal mining, steel production and rail engineering, our region powered the first Industrial Revolution. Now we’re embracing the Fourth Industrial Revolution, creating the industries and materials of the future. Our SEP sets out how will invest in innovation, in culture, in green transport solutions and in a vocational education system that will rival any in the world; putting people at the heart of what we do,’ added Mr Muir.

‘Our ambition is great – but so is the size of the prize. If we get this right, we will retain our talent, attract new people to our vibrant city and town centres, and lead the world in key sectors such as healthcare technology, education technology and advanced manufacturing.’

Photo Credit – Hillside 1958 (Pixabay)