The productivity of workers in the UK has returned to the pre-financial crisis level, figures from the Office for National Statistics (ONS) have revealed. According to the ONS, hourly output fell by 0.5% in the first quarter of 2017. These figures make for nervy reading in economic and business circles alike, as the UK continues to lag behind its major trading partners such as France, Germany and the USA.
Positive growth comes to an end
Even more concerning is that the fall in the first quarter of 2017 brings an end to a recent run of positive quarterly growth. According to the ONS, it is the first fall in UK productivity since the end of 2015. The UK’s inability to create wealth results in negative aggregate effects throughout the economy and offer more room for debate with current government spending, public sector pay and austerity. This fall in productivity is an indication that Brexit is not the only challenge facing the UK economy and is, potentially, more worrying as it is sourced from more long-term factors than last year’s referendum. If the UK’s productivity problem is not tackled, people’s wages and living standards will continue to fall and the UK could leave its self in a poor position to compete once the Brexit process is complete.
Productivity effects on cash flow
Weak productivity is a global issue. Compared with other countries, however, the UK seems to have a more acute problem. For example, British workers are a third less productive than their French counterparts. The government faces one of the largest policy challenges to-date when addressing the UK’s poor productivity. It is unlikely that a singular event or policy could put it back on track but measures to boost efficiency that are directed specifically at low-productivity firms would go a long way to addressing the issue.
Contact The Insolvency Experts
If you think your business is suffering from the effects of reduced productivity and are worried about the future of your company, get in touch with The Insolvency Experts today. We provide advice to help secure the future of your business if it is suffering from cash flow problems. For more information and to speak to one of our specialists, contact us online. You can also get in touch by calling us directly on 0300 303 8284.