The UK economy is taking a beating with slugging productivity figures underpinning decades of decline for the world’s fifth largest economy.
A report from US non-profit Conference Board says that the UK is set to be the only large large advanced economy in the world to see a decline in productivity growth in 2019. This is contrasted by an average productivity growth of around 1.1% in other developed economies, per Conference Board’s figures.
UK output per hour is down to just 0.2%, a drastic reduction in productivity growth, according to Conference Board’s figures. In comparison, productivity growth was 2.2% between 2000 and 2007, and then just 0.5% from 2010 to 2017.
This is partly explained by a slowdown in Western European productivity in the second half of 2018, but the UK was the worst hit. Total factor productivity, a measure of economic efficiency, in the UK was down 0.1% in 2018.
“The UK is a consistent story of slow output growth, slow employment growth, and slow productivity growth,” according to Bart van Ark, chief economist of the Conference Board, as quoted in the Financial Times. Productivity growth has gone from 0.8% in 2017 to a projected 0.2% this year, the Conference Board report estimated.
“While strong employment performance was in part offsetting the UK’s productivity growth between 2010 to 2017, the growth rate of hours worked has rapidly declined recently,” according to the report.
In a separate emailed report on Monday, recruiter Morgan McKinley said that the UK’s performance has been hit hard by Brexit uncertainty. The firm’s recent employment monitor saw a 9% decrease in jobs available in London year-on-year, with Brexit having “crushed confidence among City employers.”
“We closed 2018 with a dramatically poor jobs market, because it’s become virtually impossible for businesses to grow here, so we started 2019 on the back foot,” according to Hakan Enver, managing director at Morgan McKinley said in the report. “We have under half the jobs and under half the job seekers we had at this time in 2017.”