Still no signs of that elusive rebound in the UK’s flagging labour market productivity.
Latest official figures show output per hour – a key measure of productivity – rose by 0.4 per cent in the last quarter of 2016, accelerating from 0.2 per cent but still far short of the rates seen before the financial crisis hit in 2008.
Weak productivity has beset most developed world economies over the last decade, with the Office for National Statistics saying there is still “no evidence” of a return to pre-crisis levels of growth.
Rising productivity is essential in securing economic prosperity through higher living standards and helps governments meet the costs of their ageing populations.
But it has been an elusive element in Britain’s otherwise robust recovery since the crisis, where unemployment has been driven to 12-year lows. Economists have sought a number of explanations for the weakness, ranging from measurements errors to the effects from declining manufacturing.
Commenting on the quarterly figures, Philip Wales, head of productivity at the Office for National Statistics noted:
Although the recent recovery of labour productivity is welcome, there is still no evidence of a return to the pre-downturn rates of growth – either in the UK or among other developed countries.
While UK services and manufacturing have both contributed to recent productivity growth, today’s results point to a wide gap between the least and most productive firms in the UK. Professional services firms accounted for almost a third of the UK’s most productive firms in 2015.