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Low skill job explosion blamed for poor UK productivity

652 low skilled1
652 low skilled1

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April 13, 2015

Low skill job explosion blamed for poor UK productivity
UK productivity has not increased since 2007 according to one report

AN explosion of low skill level and part-time jobs has been blamed for the UK’s continuing problem with poor productivity compared to other European countries.

And while employers plan to keep hiring more staff, a new report has warned concerns over productivity must be addressed, BBC Business reports.

The latest Business Trends Report by accountants and business advisers BDO highlighted the static level of British workers’ output per hour, a situation “unique amongst advanced economies”.

The weakness has perplexed economists and been described by the International Monetary Fund as a major risk to growth

Recent Office for National Statistics figures showed that productivity has not increased since 2007, which was unprecedented in the post-war period.

The weakness has perplexed economists and been described by the International Monetary Fund as a major risk to growth.

BDO partner Peter Hemington said the UK’s continuing poor labour productivity performance was a significant concern.

“Although employment growth in recent years has been strong, much of this has been in part-time jobs,” he said.

“Productivity ultimately determines our prosperity so it is a crucial area that must be addressed. Policy makers of all persuasions must take on this productivity puzzle”.

The report recorded an increase in labour hiring for March, which gave an employment index reading of 113.0.

That was almost the same as February’s figure and well above the 100 level that indicates growth above the long-term trend.
The report indicated that companies were likely to keep creating jobs.

“The hiring intentions of UK firms are at ‘sky-high’ levels with figures stronger than the heady days of the mid-2000s boom,” BDO said.

UK unemployment fell by 102,000 to 1.86M in the three months to January, with the unemployment rate at 5.7%, according to official figures.

The report’s optimism index showed that business confidence remained well above the 100 mark.

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