A survey by the Financial Times found that more than three-quarters of economists expect the US to maintain or increase its productivity lead over the rest of the world because of artificial intelligence, deep capital markets and relatively low energy costs.
In the global survey, 31 percent of 183 respondents thought the US would maintain its advantage in productivity, while another 48 percent expect the country to increase its dominance.
Economists were based in China, the Eurozone, the UK and the US.
Productivity growth – which measures progress in converting inputs such as hours worked into goods and services – ultimately allows companies to raise wages and profits, improving standards of living.
Due to rapid technological advances and reallocation of workers during the COVID-19 pandemic, U.S. labor productivity is projected to grow 10 percent between 2019 and 2024. In contrast, it remained largely stable in the UK and the eurozone, according to OECD data.
Jumana Salehen, head of Vanguard’s investment strategy group in Europe, said U.S. productivity is poised to “overtake other developed market economies” because of the country’s dynamic capital markets, flexible labor force and leadership in emerging technologies.
He said Europe risks “falling further behind”, because research and development is still too focused on traditional sectors such as automotive and pharmaceuticals.
Salehen also noted structural challenges for the EU, including fragmented infrastructure, more rigid labor markets and less supportive capital markets.
The US economy is set for the strongest growth in the G7 this year, according to the OECD – boosted by a boom in tech-led investment and stock market gains that are boosting wealth and spending among affluent households.
The gains have helped offset some of the economic damage caused by U.S. President Donald Trump’s trade wars, but also raised fears of an unsustainable AI-related bubble.
The FT survey, which was conducted in December, suggests economists do not expect the trends that have fueled America’s outperformance to reverse anytime soon.
Nina Scarrow, chief executive of the Center for Economics and Business Research, said AI and related digital technologies were the new productivity frontier, and the US’s “leading position in investment and development of these technologies will extend America’s productivity leadership”.
This trend is supported by the divergence in business investment. In the US, investment in the second quarter of 2025 jumped 24 percent compared to the same period in 2019, before the pandemic. In the eurozone it fell by 7 percent over that time, according to Oxford Economics.
Some economists surveyed by the FT warned that the increase in AI investment could reflect a “bubble” – the term was mentioned 25 times in the responses – and cautioned that a sharp recovery could hit US output and productivity.
Some economists said a reversal of US technology’s stock market gains could have spillover effects internationally, such as tighter financial conditions, softer external demand and rising risk aversion.
But the majority of survey respondents, who represented the UK and the Eurozone more than China and the US, still expect the US to maintain its productivity lead globally. In total, the survey surveyed 207 economists, although not all answered every question.
Thomas Simons, chief US economist at Jefferies, said the US is starting from a “position of strength” in the productivity race.
Respondents also pointed to America’s structurally low and more predictable energy costs, flexible labor market, and large domestic economy.
“The US benefits from structurally lower and more predictable energy costs than Europe and many Asian economies, supported by an administration that treats energy policy as a driver of economic prosperity rather than a vehicle for moral posturing at the expense of growth and living standards,” said Martin Beck, chief economist at consultancy WPI Strategy.
Europe is widely considered by economists to be hampered by over-regulation, weak investment, rigid labor markets, and a business environment less conducive to cutting-edge technologies. Some economists argued that Britain was carrying the additional burden of the Brexit legacy.
“While the US and others have made huge progress in AI, the UK has spent much of the last decade chasing Brexit tail, diverting attention and resources from innovation,” said Evarist Stoja, professor of finance at the University of Bristol Business School.
Experts acknowledge that the US faces increasing AI competition from Asia. “Other countries – particularly in Asia – will move to the border, meaning the US’s relative advantage will be reduced somewhat, but not eliminated,” said Jagjit S Chadha, an economics professor at the University of Cambridge.
According to the OECD, since 2012 China has made the second-largest cumulative venture capital investment in AI after the US and three times more than the EU.
The US may be at the forefront of the AI wave, but “much of this may prove to be a misallocation of resources,” said David Owen, chief economist at Saltmarsh Economics. “Ultimately, most of the benefits will accrue to users of the technology (elsewhere), not early-stage innovators.”
Many economists also highlighted the risks of US trade protectionism, restrictive immigration policies, fiscal imbalances and political instability that could ultimately weaken productivity growth.
Robert Barbera, director of the Johns Hopkins University Center for Financial Economics, warned that US productivity gains from trade have been “hugely diverted to tariff revenues”.
Jonathan Portes, professor of economics and public policy at King’s College London, warned that the “toxic combination” of tariffs, a decline in the quality of US government administration and anti-immigration policy “will cause significant damage to the US economy over time”.
Additional reporting from Olaf Storbeck, Claire Jones and Thomas Hale
