Productivity
Overview
Productivity is a key measure of an area's economic effectiveness and over the last decade Kirklees has seen a significant improvement. ONS estimate that the Kirklees economy generated Gross Value Added of some £8.5bn in 2022 - representing a 31% increase over 2015 levels and in line with GVA growth for England as a whole over the same period.
Whilst individual measures of productivity have seen significant improvement in recent years - GVA per hour worked in Kirklees has risen from £22.20 in 2012 to £30.70 in 2022, or 77% of the UK average - a significant gap remains. Factors affecting productivity include workforce skills, workforce participation, access to capital, diffusion and adoption of innovation and 'market dynamism' - the gradual movement of capital and labour from less productive to more productive firms.
There is also a strong correlation between productivity improvements and increased wage levels and household income. Gross weekly pay for full-time workers in Kirklees (based on place of residence) was just 89% of the England average in 2023 - representing a gap of more than £70 per week for the average full-time worker.
West Yorkshire has seen lower investment as a share of GVA than the already low national average. Performance has particularly diverged since 2013 at which point the region's productivity also diverges from the national average. Closing the investment gap would have required an additional £2.5bn of investment in West Yorkshire in 2019 alone.
Our economy has seen significant transformation over the last twenty years through automation, and this will continue to be a factor in driving up productivity. This takes different forms across sectors through robotics in manufacturing to self-checkouts in retail. This progress is set to continue, as is the uptake of artificial intelligence. Whilst this undoubtedly means that some jobs roles will be at greater risk of redundancy moving forward, there is also an opportunity to create new, skilled roles to support greater use of automation, digitisation and AI.
