UK productiveness within the third quarter of 2022 was barely greater than within the yr earlier than the Covid-19 pandemic started, in response to official knowledge that can add to gloom over the nation’s financial outlook.
Output per hour labored — the important thing measure of labour productiveness — was 1.6 per cent greater within the three months to September than its common over the course of 2019, and up by simply 0.1 per cent over the past quarter, the Workplace for Nationwide Statistics mentioned on Thursday. Output per employee was 0.5 per cent greater than the 2019 common.
Which means that regardless of massive adjustments to working practices sparked by coronavirus lockdowns, there was no change within the snail’s tempo development seen in UK productiveness for the reason that world monetary disaster.
This stagnation is seen as one of many largest challenges going through the UK financial system, as a result of rising productiveness — employees producing extra for a given degree of inputs — is an important underpinning if wages and residing requirements are to rise with out stoking greater inflation.
The ONS figures confirmed that the largest drag on productiveness throughout the financial system got here from public companies, the place output per hour labored remained 7.4 per cent under its pre-coronavirus degree.
That is prone to mirror the disaster engulfing the NHS, the place an enormous enhance in funding and staffing for the reason that pre-pandemic interval has not led to a corresponding enhance within the variety of sufferers handled.
The most recent figures will inform the following official forecast from the Workplace for Finances Accountability, the fiscal watchdog, which in October took a extra optimistic view than different forecasters of the UK’s possible productiveness efficiency. The OBR has already advised the Treasury that when it publishes its subsequent forecast, alongside the March Finances, it expects to chop its prediction for UK gross home product in 2027-28 by about 0.5 per cent in contrast with final yr’s Autumn Assertion.
The poor productiveness development is without doubt one of the key the reason why UK common incomes have fallen behind these of many different wealthy economies lately.
Earlier this month, the ONS printed figures evaluating productiveness efficiency throughout the G7 which confirmed output per employee, a extra dependable cross-country measure than output per hour labored, was greater in each different nation (barring Japan, for which there have been no figures) in 2021 than within the UK. Within the US, it was virtually 50 per cent greater and the UK lagged the G7 common by 16 per cent.