The productivity puzzle continues: CMI has its say on the latest drop in British productivity

06 July 2017 -

The UK’s recent growth in productivity has ended, but what can be done about it?

Matt Scott

The UK’s productivity has fallen by 0.5% over the first quarter of 2017, according to the latest figures from ONS.

This means that the country’s productivity has now fallen below the output per hour achieved in the final quarter of 2007, and a fall of 0.5% is also below the 1994 to 2007 labour productivity growth average, representing a worrying trend of stagnating productivity growth (see chart, bottom).

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CMI chief executive Ann Francke said this latest set of data will be a worry for those looking to solve the productivity puzzle that has dogged the UK since the start of the economic downturn.

“It’s alarming, but perhaps expected given the current political backdrop of Brexit and weak leadership, that the UK’s recent trend of productivity growth has ended,” she said. “Action needs to be taken before this becomes a downward trend. Investment in skills and management training is a crucial step to boosting productivity.

“Poor management is costing our economy £84bn each year, and Britain lags other countries when it comes to people skills. Indeed, four out of five British bosses are 'accidental managers' who've never been trained. Investing in apprenticeships to boost management talent, as well as technical skills, is a vital part of building a globally competitive UK plc.”

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Francke added: “We need better home-grown leaders, and more of them, to close the productivity gap and investing in management apprenticeships will provide school leavers and existing workers alike with the hands-on, practical experience needed to gain those management and leadership capabilities.”