How fortunate that ex-EDDC Leader Paul Diviani and current DCC Leader John Hart have managed to pass on responsibility for DOUBLING growth in Devon and Somerset by 2030 (not forecast for any other part of the UK economy) to our Local Enterprise Partnership – of which their councils are now very minor members!!! The parcel passed.
The tragedy being that this spurious forecast is now indelibly integrated into “unicorn under magic money tree” thinking at all levels.
“Productivity went into reverse in the first quarter of the year, raising questions over why Britain is no longer churning out the efficiency gains of the past.
Output per hour worked fell by 0.4 per cent in the three months to March compared with the previous quarter, the Office for National Statistics said.
Compared with the first quarter of last year, productivity was 0.9 per cent higher, but this was still very sluggish against the trend rate of growth of almost 2 per cent a year that was routinely chalked up before the financial crisis.
The ONS said that the productivity puzzle remained unsolved and raised possible concerns about inflationary pressures building. Earnings and other labour costs grew by 3.1 per cent over the year, up from 2.9 per cent in the previous quarter.
With wages growing faster than productivity, firms face potential profit constraints in the short run and longer-term pressure to raise prices.
Over the past ten years, productivity growth has been the weakest since modern records began and appears to be the slowest since the early 1820s, when Britain was emerging from the Napoleonic wars.
After previous downturns, productivity has initially stalled but subsequently recovered to trend rates of growth. Productivity is the key factor for a lasting rise in living standards.
Economists have proffered a number of possible explanations for the productivity freeze, including the relatively low level of business capital investment and the reluctance of banks to lend since the crisis.
Others believe the productivity number is understated because of the difficulty of measuring intangible output benefits from the digital economy.
In the ten years since the last productivity peak in the fourth quarter of 2007, output per hour worked is only 1.5 per cent higher. It would have been 20 per cent higher by now if pre-crisis trends had continued.
The Chartered Institute of Personnel and Development said the latest figures were “disappointing but not surprising” given the strong job creation numbers in the quarter and weak economic growth.
Other analysts said that wintry weather in the first quarter would have hit productivity levels in some industries.
The ONS next week reveals the first of its estimates for monthly GDP as well as a rolling three-month figure. Previously it had stuck to quarterly numbers. Britain will be the first advanced economy to try to estimate total national output every month.
One drawback, however, is that it will delay publication of the traditional calendar quarterly number. The Bank of England will not have the benefit of the full second-quarter GDP number when it decides whether to raise base rate early next month.”
2 mins read
Patrick Hosking, Financial Editor
July 7 2018, 12:01am, The Times