A snapshot survey suggests that the UK's productivity levels are falling behind Europe and the US, largely due to lower skills levels.

The Sector Skills Almanac for the UK (2007) found that while the UK's employment rate is the fourth highest in Europe and that some sectors are more productive than their EU and US equivalents, the UK's overall productivity levels are 21% behind the USA and 8% lower than Europe.

The Almanac's, from the Sector Skills Development Agency (SSDA) takes a sectoral approach to the skills and productivity challenge, mapping out and comparing the different skills needs and approaches across 27 economic sectors.

It found that 25% of all vacancies in England existed due to a lack of candidates with the required skills, qualifications or experience. Employers in England reported 6% of all staff to be less than fully proficient to do the job required of them.

Professor Mike Campbell, director of development at the SSDA said: "There is a shortage of basic and employability skills, vocational and technical skills, and intermediate and higher level skills are more plentiful in the workforces of other countries. Similarly the UK's productivity level relative to its competitor countries is weak. The difference is stark when per hour or per worker measures of productivity are considered."

Professor Campbell, who was adviser to the recently published Leitch Review, said that skills were key to closing the productivity gap with competitor countries.

"The UK is starting from a position of disadvantage and significant progress is required if we are to ensure a strong economy for the future."