Productivity still suffering

New figures show that construction output decreased in the last quarter


GDP figures released today by the Office for National Statistics (ONS) show an overall growth of 0.5 per cent for the quarter October-December 2016, but no growth in manufacturing and a recession in construction.

Services increased by 0.7 per cent and agriculture increased by 0.6 per cent. In contrast, production decreased by 0.2 per cent, while construction output decreased by 0.1 per cent.

The UK remains one of the least productive of the world’s leading economies, with output per hour in 2014 20 percentage points behind the rest of the G7 countries, the widest productivity gap since estimates began in 1991.

Last year a report found that Britain’s productivity is falling behind other economies because it is slower to turn ambitious smaller firms into exporters of innovative new products and services.

There is also, of course, the government’s failure to develop a coherent industrial policy, exemplified recently by the closure of steel plants with the loss of thousands of jobs. Without support for industry, experts warn, any growth we see is unsustainable.

Commenting on the figures, the TUC’s Frances O’Grady said:

“It’s a big concern how fragile the recovery still looks, and how unbalanced it is with growth almost entirely dependent on services.

“We need a stronger recovery that’s built to last and that reaches all sectors of the economy. The weakness of manufacturing and construction is no surprise given the government’s lack of a proper industrial policy to boost the economy and protect crucial industries like steel.”

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