Productivity in the UK fell at its fastest annual rate for five years during the second quarter of 2019, according to the Office for National Statistics (ONS).

After two previous quarters of zero growth, productivity (measured by output per hour) fell by 0.5%. The ONS figures showed a 1.9% hit in manufacturing productivity, on an annual basis, in the second quarter.

If a second consecutive quarter of negative growth is confirmed, the UK economy could enter recession. The uncertainty surrounding Brexit has been identified as a key factor behind the negative growth.

Deputy Chief Economist at the ONS, Richard Heys, commented of the figures: ‘Labour productivity has continued the weak trajectory it has followed over the last year. Both manufacturing and services saw a fall on this time last year, with only a couple of other relatively small sectors contributing positively. This confirms the broad base of the UK’s productivity challenges.’

Quote from Nigel Holland:

“These figures show how the uncertainty around Brexit is impacting the productivity of businesses. Businesses are unsure how to proceed, cutting their investments with aims to reduce their potential losses.”