Productivity upturn in danger of cooling
Britain’s productivity has crept higher, touching a sixyear peak in the third quarter of last year, but experts said it may struggle to maintain an upward trajectory.
Official figures yesterday showed labour productivity expanded by a modest 0.9 per cent in the third quarter of 2017, bouncing back from falls of 0.5 per cent and 0.1 per cent in the first and second quarters respectively.
While the rebound proved the largest rise since the second quarter of 2011, the nation may still clock a decade of stagnant growth since the financial crisis if levels fall back in the final quarter of 2017.
Howard Archer, EY Item Club’s chief economic adviser, said: “The rebound in productivity in the third quarter is highly welcome – but it needs to be seen in the context of a particularly poor first half performance.
“There needs to be sustained improvement to ease concerns over the UK’S overall poor productivity record since the deep 2008/9 recession.
“Certainly, the UK has a lot of catching up to do on the productivity front as it has been markedly lagging its performance before the 2008/9 downturn.”
Mike Taylor, managing director at business performance and leadership consultancy Accelerating Experience, said: “UK productivity is showing signs of improvement, but this is no time for complacency.”
He added: “A more significant and sustainable rise in productivity growth will require increased long-term investment by both the government and businesses.”