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UK labour productivity dips in fourth quarter

Posted on 16 May 2019 and read 899 times
UK labour productivity dips  in fourth quarterAccording to data from the Office of National Statistics, labour productivity in the fourth quarter of last year (Q4 2018), as measured by output per hour, fell by 0.1% compared with Q4 2017; this is the second successive quarterly year-on-year fall, following the decrease of 0.2% seen in Q3 2018; and while services experienced labour productivity growth of 0.4%, manufacturing decreased by 1.1%.

Compared with Q3 2018, UK labour productivity grew by 0.3% in Q4, this increase reflecting a slight decrease in the number of actual hours worked.

That said, ‘productivity hours’ worked increased by 1.5% in Q4 2018 compared with Q4 2017, while the number of jobs increased by 1.3%.

In 2018, labour productivity measured as output per hour grew by 0.5% compared with 2017, with increases in services and manufacturing of 0.8% and 0.3% respectively.

Output per job increased by 0.3% in 2018 compared with 2017, with services growing by 0.6% over the year, while manufacturing fell by 0.7%.

Responding to the announcement that UK’s productivity growth in Q4 2018 decreased for the second consecutive quarter, Mike Cherry — national chairman of the Federation of Small Businesses (FSB) (pictured) — said: “The data highlights yet again the impact of the political and economic uncertainty to the economy.

“Small-business confidence has fallen through the floor, as firms face a trying time amid a fragile economy. While there were some positives in the data, such as a 0.4% productivity increase in services, there was a significant 1.1% decrease for manufacturing.

“Small firms are not only contending with unprecedented uncertainty, they are also dealing with a raft of new cost increases and reporting requirements.

Rising labour costs have continued with the introduction of Making Tax Digital, fresh hikes to business rates and a further increase in auto-enrolment pension contributions.

“In order to improve productivity, key areas that must be addressed include management and leadership, broadband connectivity and the scourge of late payments — all this amid the on-going uncertainty over the future of the UK’s relationship with the EU.

“Productivity will only continue to decline, unless the Government can do more to back British businesses.”