Signal EU labour productivity has slipped from about 90 to about 75 percent of the US level

Summary

OECD data cited in the report show US hourly labour productivity rising 1.8 percent a year between 1995 and 2024, against 1.1 percent for the EU27. As a result EU productivity slipped from about 90 percent of the US level in 2000 to about 75 percent in 2024. The Draghi report attributes around 70 percent of the per-capita GDP gap in purchasing-power terms to this weaker productivity. More recent work finds euro-area hourly productivity grew only 0.9 percent from late 2019 to mid-2024, compared with 6.7 percent in the United States. The same study cautions that different employment adjustment and the post-2022 energy shock also shaped that short-run gap, so it should not be read purely as a technology deficit.