UK labour productivity results reveal slight increase: ONS

  6th January 2017       Robert Bond FIRP
 Employment, Accounting & Finance, CIPD, Company News, Executive Search, Human Resources, IT & Software Solutions, Office & Commercial, Recruitment

UK labour productivity, measured by output per hour, is revealed to have grown by 0.4% from Quarter 2 (Apr to June) 2016 to Quarter 3 (July to Sept) 2016; according to The ONS which has just released its labour productivity results for July to September 2016.

Productivity grew in the services industries with an estimated growth of 0.3% on the previous quarter, while manufacturing productivity is estimated to have fallen by 0.2% on the previous quarter.

However, the growth of earnings and other labour costs outperformed productivity growth, resulting in unit labour cost (ULC) growth of 2.3% in the year to Quarter 3 2016.

Ian Brinkley, acting chief economist at the CIPD, said, “These are disappointing figures overall, with little sign that the persistent under-performance on productivity is coming to an end. Many organisations will be unable to offer higher wages as a result, meaning significant numbers of workers will feel poorer in 2017 if inflation continues to rise as anticipated.

“There may be more room for pay rises in some sectors. For example, productivity per hour is rising more strongly in some low pay industries, such as wholesale, retail and hospitality than in the rest of the service sector, which may reflect the impact of the National Living Wage.

“The government’s productivity plan must correct a serious omission in the lack of significant new investment to support adult skills training and development if it is to address the underlying reasons for poor productivity growth.”

David Cheetham, market analyst at, added, “British labour costs have risen at the fastest annual rate since late 2013 in the three months after the country voted to leave the EU according to data from the Office of National Statistics (ONS). A 2.3% increase in Q3 2016 represents a 10 basis point rise from the prior quarter and could provide an unwanted headache for the Bank of England. Andy Haldane, the Chief Economist at the Bank of England, confessed yesterday that the Central Bank were wrong to predict a sharp downturn in the aftermath of June’s shock Brexit vote after a survey of the UK services sector came in at a 17-month high to complete a hat trick of strong PMI readings this week.”

Robert Bond FIRP


Rob has a background in Sales and IT recruitment with over 25 years of experience in these sectors. He heads up the IT and Accountancy Divisions of Bond Williams and is also responsible for Bond Williams internal Operations and Finance. Alongside Claire, he is responsible for the overall growth and …

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