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UK – Labour productivity falls in Q2: ONS

09 October 2019

Labour productivity in the UK, as measured by output per hour, fell by 0.5% in the second quarter of 2019 ended June 2019 when compared with the same quarter of the previous year, according to new data released by the Office of National Statistics (ONS). This follows two previous quarters of zero growth.

The data from ONS reports labour productivity estimates for the second quarter of 2019 for the whole economy and a range of industries, together with estimates of unit labour costs.

Both services and manufacturing saw a fall in labour productivity growth of -0.8% and -1.9% respectively, compared with the same quarter in the previous year.

There was no growth in output per job in Q2 2019 compared with the same quarter in the previous year, as both gross value added and the number of jobs grew by 1.3% over the same period.

Tom Hadley, director of policy and campaigns of the Recruitment & Employment Confederation, commented, “As productivity falls for another quarter, government needs to ask itself serious questions about how to sustain rising pay and meet ambitions for a higher National Living Wage.”

“Addressing skills shortages is part of the answer to this conundrum. As REC’s jobs data shows, businesses up and down the country, in sectors like IT, healthcare and logistics, are struggling to find the skills they need. In the shadow of Brexit uncertainty, businesses are also scaling back ambitions to hire new staff and invest in their operations,” Hadley said.

“But this isn’t just about skills, it is also about employers getting the best of their people through good management practices and by boosting progression opportunities,” Hadley continued. “Government can help by reforming the apprenticeship levy to help those on temporary and flexible contracts. This must be paired with an evidence-based approach to future immigration policy, and a negotiated and orderly exit from the EU.”

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