Toucan

Annual UK output growth per worker plunged to 0.6 per cent in the first quarter of 2008, the weakest performance since the third quarter of 2005.

Productivity fell from 1.6 per cent in the fourth quarter of 2007 and 2.7 per cent from the first quarter of 2007.

Workers are putting in more hours, however, with total hours worked growing by 1.9 per cent in the first quarter of 2008 compared with the same period a year ago, up from a growth of 0.7 per cent in the previous quarter.

Global Insight economist Howard Archer said: "Clearly, the marked slowdown in productivity in the first quarter of 2008 was influenced significantly by sharply reduced GDP growth, as well as by companies holding on to workers at this stage.

"Weak productivity in the first quarter of 2008 is yet more disappointing news for Gordon Brown and Alistair Darling, as the government has placed high importance on boosting UK productivity.

"A number of factors appear to have limited the upside for UK productivity in recent years. These include: relatively limited business investment earlier this decade, relatively low research & development expenditure, the diversion of resources to the public sector (which is generally considered to be less productive), infrastructure bottlenecks, and education inefficiencies.

"In addition, the high level of employment in the UK means that less productive workers are also able to get jobs, which obviously reduces overall productivity."

In a speech to education experts last week, Gordon Brown said productivity could be improved by people adopting a better work ethic and "aiming high".

© Adfero Ltd