Yael Selfin, Chief Economist at KPMG UK, comments on today’s Q2 productivity figures
“Today’s figures showed a pick-up in productivity growth to 0.5% in Q2, following a poor performance in the first quarter. This allowed productivity to rise by 1.4% in the year to the second quarter, representing some improvement but remaining below the 2% average before the 2008-9 recession.
“Improvements were driven by the services sector, with retail & wholesale trade and hotel and restaurants continuing with the strong performance earlier this year, while transport and storage and professional services also picked up. Within manufacturing, chemicals and pharmaceuticals, performance remained strong while basic metals and metal products performance continued to deteriorate. Figures for the public sector showed a 2% decline in productivity in the second quarter following a pick up earlier in the year.
“The figures today show the UK economy is not out of the woods yet. A significant challenge remains to bring back productivity performance to where it needs to be in order for households to see any meaningful rise in their purchasing power.”
“The Chancellor will need to announce more measures in his Budget later this month han what has already been trailed, in order to reverse the poor productivity performance the UK has experienced since the recession. As his reserves are likely to be depleted, other measures will need to be implemented to help create a more agile economy.”
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