UK Labour Productivity Fell In Final Quarter Of 2015

Productivity among UK workers at the end of last year fell at the fastest pace since 2008, official figures show.

Worker output per hour in the UK fell 1.2% during the last three months of 2015 compared with the previous quarter, according to data from the Office for National Statistics (ONS).

Output per hour in manufacturing fell by 2% from the previous quarter, while in the service sector it dropped 0.7%.

Poor rates of productivity in the UK have been a concern to policymakers.

In last month's Budget, the Office for Budget Responsibility cut its growth forecasts for the UK economy after it lowered its predictions for productivity.

The fall in productivity in the fourth quarter of the year followed a 0.6% rise in the third quarter.

Over 2015 as a whole, output per hour rose by 1%, which the ONS said was the strongest increase since 2011.

The ONS said that labour productivity overall - covering output per hour, output per worker and output per job - was about 0.5% higher in the fourth quarter of 2015 than in the same period a year earlier.

"How productivity develops going forward is critical to the economy's growth potential," according to Howard Archer, an economist at IHS Global Insight.

"The crucial question for the UK economy is, does the fourth quarter of 2015 mark a temporary relapse in productivity. Or is it evidence that the UK has an ongoing serious productivity problem."

Suren Thiru, head of economics at the British Chambers of Commerce, said: "There are deep-rooted structural problems in our economy that have dampened productivity - from skills shortages, to infrastructure bottlenecks and limited growth finance.

"Delivering solutions to these critical issues would go a long way to achieving the productivity gains we need."


April 2016