No solution in sight for productivity puzzle as small businesses say it is not a priority
HOPES that a “dynamic movement” among small firms could solve the UK’S prolonged productivity crisis have been dashed after business owners said it was not a priority.
Just 7pc plan to make it a priority next year, with SMES citing the state of the UK economy as a much greater concern. Four times as many businesses are worried about a possible slowdown as a worry, a survey of more than 1,000 businesses by HSBC has shown. It comes after productivity growth was revised down by the Office for Budget Responsibility for the seventh year in a row.
Sluggish output has resulted in poor growth forecasts, and led to fears that the productivity crisis could result in lower wages for several years. Economic growth will average just 1.4pc over the next five years, according to the OBR, down from the 1.8pc it predicted in March. The findings dampen hopes that a bottom-up productivity transformation could solve the UK’S biggest economic headache.
Sir Charlie Mayfield, chairman of the John Lewis Partnership, has argued that a “dynamic movement” involving thousands of businesses could add as much as £130bn in Gross Value Added to the UK economy each year.
Sir Charlie Bean, of the OBR, as well as the OECD think-tank have suggested that the productivity crisis is a far greater problem than Brexit for the UK.