A recent survey conducted by the Financial Times indicates that a significant majority of economists anticipate the United States will sustain or enhance its productivity advantage over other global economies due to several key factors, including advancements in artificial intelligence, robust capital markets, and comparatively low energy costs. Of the 183 economists surveyed, 31% believed the US would maintain its productivity lead, while 48% expected an increase in this dominance. Economists from the US, UK, Eurozone, and China participated in the poll.
Between 2019 and 2024, US labor productivity reportedly surged by 10%, propelled by technological innovations and workforce adjustments during the COVID-19 pandemic. In contrast, productivity growth remained largely stagnant in the UK and Eurozone, as per data from the OECD.
Jumana Saleheen from Vanguard noted that the US’s dynamic capital markets and innovative environment are expected to help it distance itself further from other developed economies. She voiced concerns over Europe potentially falling behind, attributing this to structural issues such as rigid labor markets and an emphasis on traditional sectors in research and development.
The OECD projects the US economy will experience the strongest growth in the G7 this year, bolstered by a technology-driven investment boom. However, some economists warned of the risks associated with a possible “bubble” in AI investments, which could disproportionately affect US output and productivity if a correction occurs.
While there is wide consensus on the US’s potential for maintaining its productivity edge, economists also acknowledged rising competition from Asian countries, alongside risks from trade protectionism and restrictive policies that could undermine sustainable growth in the long term.
Why this story matters:
- Highlights the potential for sustained US economic advantage globally.
Key takeaway:
- Economists foresee a continued lead for US productivity driven by technology and investment.
Opposing viewpoint:
- Concerns exist about potential economic bubbles and rising competition from Asia that could erode US dominance.
