The Institute of Directors has said that figures released today which showed output per hour grew by 0.9 per cent in the second quarter of 2015 show that British businesses may have started to solve the ‘productivity puzzle.’
The IoD will be releasing a new report into productivity at the IoD’s Annual Convention on Tuesday 6th October, titled ‘Balancing UK Productivity and Agility.’
James Sproule, Chief Economist at the Institute of Directors, said:
“Boosting productivity is one of the biggest economic challenges the developed world faces. Doing more with less is a goal businesses and households across the country strive for every day, and solving the puzzle is one of the keys to boosting economic output, living standards, wages, and the quality of the goods and services we produce. That is why we have heard so much about the UK’s poor performance in this area over recent years.
“Today’s figures, which show output per hour grew by 0.9 per cent in the second quarter, are very encouraging. With employment high, real wages on the up and investment set to grow over the next few years, the growth in productivity is on solid foundations, based on strong business and consumer confidence.
“For those who point out that the UK lags its international competitors, it is important to remember that business performance in the future will be determined by a firm’s agility and their ability to respond quickly to changing business, technology and consumer demands, not just how well they can refine production and processes in mature businesses.
“Although Britain is still behind where it would have been had the financial crash not happened, we should be wary of such comparisons. Measurements can be crude and pre-crisis productivity growth was built on unsustainably loose credit. Raising output across the services economy in the aftermath of such a shock was always going to be tricky. But these statistics prove that British businesses are finally starting to put the pieces of the productivity puzzle back together again.”