Productivity growth hits 14-year low

Productivity is growing at its slowest rate for 14 years, according to the Office for National Statistics (ONS).

Between April and June this year the amount of wealth that each worker produced was 0.5% higher than in the same months of 2004. This is the lowest annual growth rate since Spring 1991.

Michael Saunders, of Citigroup, said analysis showed a steep decline in private sector productivity growth and falling productivity levels in the public sector for four years in a row.

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“The chances are that private sector firms will respond to this slowdown in productivity growth with a slowdown in hiring, which will keep unemployment drifting up”,” he said.

“In the government sector, however, there is little chance of a near-term pick-up in productivity growth unless the government gets far more serious about reforms to the delivery of public services.”