UK Productivity Shows Resilience Amidst Economic Changes

  1. Labour Productivity:
    • In Quarter 2 (Apr to June) 2023, output per hour worked increased by 0.3% compared to the same quarter in 2022.
    • Output per hour worked was 2.8% above pre-COVID-19 levels (2019 average) in Quarter 2, showcasing a recovery trend.
    • Output per worker and output per job also experienced growth of 0.2% and 0.4%, respectively, year-on-year.
  2. Industry Contributions to Productivity:
    • Administrative services and construction sectors made significant positive contributions to annual productivity growth.
    • Finance and insurance had the largest negative impact on productivity growth.
    • Overall, the reallocation of economic activity between industries positively influenced productivity growth.
  3. Labour Costs and Income:
    • Nominal unit labour costs rose by 1.6% in Quarter 2 2023 compared to the previous quarter.
    • Nominal unit labour costs were 5.8% higher than the same quarter a year ago.
  4. Insights into Growth:
    • The coronavirus pandemic had a short-term effect on productivity growth, but unlike standard recessions, the trend rate remained unaffected.
    • The data suggests underlying weakness in drivers of productivity growth persist.

Conclusion: The UK’s productivity landscape displays resilience, with positive trends in various productivity indicators. While challenges persist, the economy shows adaptability to changing circumstances. Ongoing monitoring and policy adjustments will be crucial for sustaining and enhancing productivity levels.