UK productivity suffers worst drop in five years

09 Oct 2019

Productivity in the UK fell at its fastest annual rate for five years during the second quarter of 2019, according to the Office for National Statistics (ONS).

Productivity – measured by output per hour – fell by 0.5% after two previous quarters of zero growth. The ONS figures showed a 1.9% hit in manufacturing productivity, on an annual basis, in the second quarter.

The UK economy could enter recession if a second consecutive quarter of negative growth is confirmed. The uncertainty surrounding Brexit has been blamed as a factor behind negative growth.

Commenting on the figures, Richard Heys, Deputy Chief Economist at the ONS, said: 'Labour productivity has continued the weak trajectory it has followed over the last year. Both manufacturing and services saw a fall on this time last year, with only a couple of other relatively small sectors contributing positively. This confirms the broad base of the UK's productivity challenges.'

Meanwhile, Tej Parikh, Chief Economist at the Institute of Directors (IoD), said: 'These figures hammer home the impact uncertainty is having on the business environment.

'Unsure of what's around the corner, businesses' investment in the new equipment and technology that drives up their performance has been stifled.'

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