UK reported to have weak productivity, but what about Warwickshire?

16th April 2015

Newly released data suggests that the UK suffered from a slight drop in productivity by 0.2% in the third quarter of 2014 – pointing to national productivity levels weakening slightly, but relatively similar to levels in 2013. Does this imply that local productivity has also declined over time? And if so, is this linked to employment?


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Historically, Warwickshire’s productivity stayed fairly stagnant up to 2009, with an average of just under £45,000 per employee. A slight dip in productivity of roughly £2,000 occurred in 2009 after the impact of the financial crash in 2008 was starting to be felt across the economy. Since then however, local productivity has consistently increased by about 12%; where in 2013, every worker in Warwickshire produced at least £5,000 extra output compared to the pre-crash period. This implies that Warwickshire is on the road to recovery as increased productivity will help lead to further growth. As more businesses regain confidence and hire more workers to satisfy their demand, employment should also be increasing in Warwickshire. Is this the case?

productivity and employment

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Despite higher productivity rates, employment has gradually fallen over time. About 17,000 more people were employed nearly 10 years ago compared to last year. To clarify, pre-2010, Warwickshire suffered from low productivity but higher employment. Now, in the post-2010 period, the county has higher productivity but lower employment. Output growth is currently growing faster than employment growth, which means that businesses are currently contributing more to Warwickshire’s economy than workers. The success of business expansion in Warwickshire is very good for the local economy, as this will encourage long term investment. However, to avoid businesses cutting back on labour costs such as wages to stay competitive, more people in Warwickshire need to get back into work.


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