After the sobering downgrade to our prospects for productivity growth comes the scramble for solutions. The new industrial strategy, if fulfilled, is a good place to start.
Last week the UK got a downgrade. Its growth prospects were slashed by the Office for Budget Responsibility in the all important area of productivity. If it’s correct, the country faces another decade of very challenging economic circumstances having just gone through one following the financial crisis.
Keeping our fingers crossed about an improvement in productivity isn’t working. Last week provided a stark reminder that the UK’s problem in this area remains critical. In fact, it seems to be getting worse. Continue reading
A raft of data emerged from the Department for the Economy today. The most significant release was the Quarterly Employee Survey (QES) for Q2 2017 -a comprehensive survey of the actual number of jobs in the economy. This is more closely watched than the Labour Force Survey which looks at people working in some shape or form (paid, unpaid, self-employed, voluntary etc). Continue reading
The Northern Ireland economy continued to expand in Q1 2017, according to today’s data, albeit at a weaker rate than in the previous quarter. Private sector growth (+0.4% q/q, +3.4% y/y) was driven by the services sector (+0.5% q/q, +3.1% y/y) with industrial production (-0.2% q/q, +2.1% y/y) and construction (-1.7% q/q, +7.9% y/y) posting quarterly contractions. The fall in industrial production though conceals strong rates of growth within manufacturing firms (+0.9% q/q & +0.9% y/y).
Theresa May’s Brexit speech reiterated the Government’s negotiating priorities and spelled out some of the likely consequences. With the triggering of Article 50 at most 10 weeks away the real negotiations will soon begin.
During George Osborne’s reign at the Treasury, addressing the UK’s productivity challenge took a back seat role to tackling the deficit. In Osborne’s first budget statement (June 2010) the word productivity wasn’t even mentioned. Conversely, ‘deficit’ was uttered 19 times. Indeed, six of the former Chancellor’s budget speeches failed to mention the word productivity at all. However, Osborne’s last two budgets did see a new focus on productivity with the word appearing 11 times in March. This was perhaps in recognition of the UK’s woeful productivity performance which couldn’t be ignored any longer. Tackling the deficit assumed productivity growth would hold up. It didn’t. Continue reading
Chancellor Hammond’s first Autumn Statement will also be his last. From now there will be a solitary annual Budget event per year. Its swansong was a low key affair. The financial crisis still casts a long shadow with the deficit reduction road lengthened again. But it didn’t stop a regrouping for a new attack on economic public enemy number one – poor productivity.
During George Osborne’s reign at the Treasury, addressing the UK’s productivity challenge took a back seat role to tackling the deficit. However, Philip Hammond has put productivity back on the agenda with the word appearing fourteen times in his speech today. In fact, the UK’s dire productivity performance is a major factor behind the poor state of the public finances. Continue reading
Growth in the world economy is subdued, so there’s heightened focus on whether the UK economy is slowing. Most measures are still showing growth, just less of it than had been hoped. But poor productivity growth is what’s really holding us back. Continue reading