The Office for National Statistics (ONS) has published its labour productivity data for the third quarter of 2019, with the findings showing a rise of 0.1%.
Labour productivity, measured by output per hour, has increased slightly when compared to the same three months of 2018, and follows a period of contraction that lasted for four quarters in succession.
These figures are important because productivity is the main driver of economic growth and determines the long-term economic health of a nation.
Recent data has revealed weak economic growth, so it makes it even more important that labour productivity increases; the more output per hour increases salaries and profits, improves standards of living, and enables the tax-take to grow, therefore allowing the government to fund better public services.
Since the economic downturn, labour productivity growth has been weak; the decade before the downturn, productivity was close to the long-term average growth rates of 2% per year.
The minimal labour productivity growth has been labelled the UK’s “productivity puzzle,” and the ONS call it “arguably the defining economic question of our age.”
In the three months to the end of September 2019, productivity grew by 0.1%, when compared to Q3 2018; gross added value and hours worked also increased by 1%, but because the former grew slightly more than the latter, it resulted in only a small growth in productivity of 0.1% per hour.
This quarter is the first one to experience growth since Q2 of 2018, when productivity went up by 1.4%.
In terms of sectors, services saw its productivity grow, while manufacturing suffered a decrease of more than 1%.
Katherine Kent, ONS Head of Productivity, said: “Although productivity grew on the year, the underlying picture is of sustained weakness since 2008, with growth over the past year being only a third of the average over the last ten years or so.”
The “puzzle” of increasing productivity is a difficult one, but some organisations have attempted to make the workplace more active, in order to reduce the risks associated with sedentary lifestyles and give employees more energy; the hope is this will increase productivity.