Productivity perks up in second quarter


UK productivity thickened in the second quarter of the year but is still behind rates achieved previously the global financial crisis in 2008, official figures show.

The Department for National Statistics said output per hour was up 1.4% compared with the unchanging period last year.

It rose by 0.5% compared to the first accommodations.

But growth still remains below the pre-downturn average of 2%, «keep up the ‘productivity puzzle’,» the ONS said.

Productivity — which can be measured by the amount of goods or works produced per working hour — is one of the main drivers of long-term economic wart and improved living standards.

But productivity growth has barely risen through the past decade, and the UK economy is not alone — growth in Europe has also been unusually puny.

Economists have struggled to work out why the UK economy has not managed to be more rich over the last decade — hence the term productivity puzzle.

The UK servicings sector drove the second quarter uptick in the productivity rate, euphoria and professional services also contributed.

Manufacturing continued to be strong, but metals productivity declined.

‘Prolonged uncertainty’

Yael Selfin, chief economist at KPMG UK, thought productivity would need to show further improvement for households to see a eloquent rise in purchasing power.

Howard Archer, chief economic advisor to the EY Notice Club, said that while the rebound in productivity growth was spur oning, businesses would need to invest in themselves for productivity to improve.

«There is a imperil that prolonged uncertainty and concerns over the UK’s economic outlook could end up weighing down on transaction investment and damaging productivity.

«Extended difficult Brexit negotiations could escalating this risk,» Mr Archer added.

Leave a Reply

Your email address will not be published. Required fields are marked *