News | Published October 08 2019

Productivity falls at fastest rate for five years

According to the Office for National Statistics, UK productivity has fallen by the fastest rate in five years.

Measuring the quarter from April to June, the ONS found output per hour, the measure for productivity, had fallen by 0.5 per cent. 

The last two quarters had seen zero growth but no reduction.

The statistics show that both the services and manufacturing sectors saw productivity fall by 0.8 per cent and 1.9 per cent respectively. In terms of productivity per job, there was no growth in output.

Responding to these figures, the ONS wrote: “This sustained period of declining labour productivity represents a continuation of the UK's “productivity puzzle”, with productivity since the economic downturn in 2008 growing more slowly than during the long period prior to downturn.

"Despite occasional periods of growth, this sustained general pattern of stagnation contrasts with patterns following previous UK economic downturns, when productivity initially fell, but subsequently recovered in a relatively sustained fashion whilst returning to the previous trend rate of growth.”

Howard Archer, the chief economic adviser to the EY Item Club, warned of further decreases in productivity ahead, saying: “This does not make for happy reading. If the UK leaves the EU without a deal on 31 October, business investment is likely to suffer markedly, with worrying implications for productivity.”

During his speech to the Conservative party conference, Boris Johnson named improving productivity as one of his key aims. 

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Authored by

George Salmon
Political Editor
October 08 2019

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