For years, UK productivity has been one of the country's most persistent economic challenges. But now, there are signs that the picture may finally be changing.
New analysis from the Resolution Foundation suggests that UK output per hour grew by an average of 1.1% a year in the two years to June 2026, considerably stronger than previous estimates.
The latest official figures also show output per hour was 0.7% higher in the year to the second quarter of 2026. For business leaders, the question is not simply whether productivity is improving. It is how organisations can sustain it.
Productivity is more than working harder
Productivity is sometimes reduced to a simple equation: getting more done in less time. But sustainable productivity is about much more than increasing workloads. It involves having the right skills, effective processes, appropriate technology and strong leadership.
It also raises a fundamental question for organisations: are employees spending their time on the work that creates the greatest value? This is becoming particularly important as AI changes how routine tasks are performed.
AI could be part of the productivity story
Artificial intelligence is increasingly being used to automate repetitive activities, support decision-making and help employees work with information more efficiently. However, technology alone does not guarantee productivity gains.
Leaders need to understand how technology changes workflows and whether employees have the skills to use it effectively. This may mean redesigning jobs rather than simply adding another tool to an existing process.
What can leaders do?
As productivity improves, organisations should be asking:
- Where are our biggest productivity opportunities?
- Which processes create unnecessary work?
- Are managers equipped to lead more effectively?
- Do employees have the skills they need?
- Are we measuring outcomes rather than activity?
- How can technology support people rather than simply increase workload?
There is also a cultural dimension. If productivity improvements simply mean employees are expected to do more, organisations risk creating burnout rather than sustainable performance. The real opportunity is to create better ways of working.
A leadership opportunity
The UK's productivity picture may be becoming more encouraging, but maintaining that momentum will require organisations to continue investing in people, skills, technology and leadership. For business leaders, productivity should therefore be viewed not simply as an economic statistic, but as an organisational challenge.
The question is no longer just whether productivity is improving. It is whether your organisation is equipped to make the most of it.
