Friday, 6 April 2018

Today's productivity release

The ONS productivity release is out.

Performance is still horrible.  Pre recession grwoth in GDP per hour was 2%, now it's been 1% for a decade.  There is a very slight pick up in the quarterly rate, but nothing very strong.

This means we still have a 20% gap with the competition

What is going on? It seems to be a combination of many things.  One very helpful release are the MFP numbers, now quarterly.  So part of the slowdown is capital, but most is TFP.

 One thing that is a big change is the contribution of labour allocation.  In the previous release this was very large, accounting for 60% of the slowdown in output per hour. This release excludes sector L and finds that it now accounts for very little of the slowdown, in that it was negative before the recession and is still negative.

 There is also a large contribution of financial services in London to the slowdown. Perhaps it's a combination of lots of these small things.