Low productivity blamed for poor recovery from recession.

[MarshPhantom]

Report out today saying the economy is now doing great again (hard to believe I know), basically saying that everything would be golden if it wasn't for low productivity, which implies it's all the fault of lazy workers sitting on their arses when they should making stuff.

I find this hard to believe frankly, there can't be many firms out there who are unable to keep up with demand for their products.

Where does the truth lie?

[MarshPhantom]

andymadmak said:

The report suggests that low productivity is a factor. It does not say it is the ONLY factor. So your extension that it's all the fault of lazy workers is inaccurate and unhelpful.
UK has traditionally suffered from poor productivity. We have never been really good at getting our arses into gear! That being said, if we could improve productivity we would be more competitive internationally - which would certainly help!

All in all though I personally think that a somewhat larger contributory factor to the slow recovery is the utter mess that the Eurozone is in.

Eurozone and the fairly strong pound can't be helping, but there has to be high demand for low productivity to be an issue, which is why blaming productivity just seems like a red herring.

[MarshPhantom]

loafer123 said:

Given we have had one of the strongest recoveries in the developed world, I think the premise of this thread is entirely wrong...

I didn't write the report or decide to have it as the main headline across much of the news this morning.

[MarshPhantom]

loafer123 said:

MarshPhantom said:

loafer123 said:

Given we have had one of the strongest recoveries in the developed world, I think the premise of this thread is entirely wrong...

I didn't write the report or decide to have it as the main headline across much of the news this morning.

Apologies - I didn't realise the title of the thread came from an article.

The premise of their article was wrong.

No problem.

[MarshPhantom]

I do remember a thread asking how much PH had cost the British economy - that didn't go well for the OP.

[MarshPhantom]

ralphrj said:

Johnnytheboy said:

I've kept reading this and I don't know what the answer is.

Is it related to the lower-than-expected redundancies in the depth of the recession?

i.e. companies kept on more people than analysis suggested they would and are now overmanned?

It is probably one of the reasons.

There was a Bank of England report last year the looked into the issue of low productivity and came to the following conclusions:

1. reduced utilisation of workers - companies have avoided potential redundancies by spreading work around or by diverting staff from revenue raising activities to business development,

2. reduced capital investment - companies have held off investing in new production processes/plant & machinery,

3. higher firm survival - low interest rates, payment extensions (HMRC 'Time-to-Pay' scheme), bank forbearance (support given to companies to meet debt obligations) etc. helped to the scale of company liquidations seen in previous recessions,

4. impaired resource allocation - as less companies went under and unemployment was lower than expected other companies that were doing well were not able to recruit as many workers as they may have hoped.

Wouldn't much of the above also be true for our competitors who have also been through recession recently.