Wednesday, 24 April 2013

UK Productivity

Update.  The new data were encouraging, +0.3%.  I discussed them in advance on Radio 4 Today,  from 23 mins in: 

The UK awaits the 2013Q1 GDP numbers release on Thursday. Meanwhile more parts of the productivity puzzle feature.

1.  Public Service Productivity Estimates: Total Public Services, 2010 is released today.  Key points.

a. Total public service productivity has remained broadly constant between 1997 and 2010, with an
annual average growth rate of 0.0% i.e. outputs matched inputs.
b. The two most recent years, 2009 and 2010, showed modest productivity growth rates of 0.3%.

Here's the picture

And the per year data are

So the current economy looks like the public sector over the last 13 years.

2. The IFS Green Budget had a great chapter on productivity.
An interesting graph is

which shows that
1. the aggregate fall in labour productivity is the result of falls within sectors, with some sectors experiencing larger falls than others.

2. The figure shows that the fall of productivity within the finance industry alone would have reduced the aggregate productivity by 1.2% (i.e. a quarter of the total 5.0% fall caused by within-industry effects). The mining and quarrying industry also saw a large fall in productivity, which accounts for about a third of the absolute fall.