UK productivity lowest since 2008: Osborne & Tories are failing

[Peter Grummit]

There are three key factors here in my view:
1. The flexibility of the labour market means that for many employers, it is easier and less risky to employ workers on poor wages and often zero hours contracts, rather than investing in long-term training for people who may then defect to a competitor.
2. Despite the Chancellor's investment announcements (often the same projects multiple times) and general spin, austerity is projected to reduce public capital investment from 1.8% of GDP pa to 1.5% by 2020. So, infrastructure bottlenecks are not being addressed.
3. It is far easier and perceived to be safer to invest savings in property, which does nothing for the productive capacity of the economy, rather than capital investment funds, which are paying poor returns in the current climate of low interest rates and modest (at best) stock market performance. I say perceived, because the property boom will not last forever and the adjustment will be significant when it happens.

This issue goes beyond political point scoring, but it's undeniable that the Government has done little since 2010 to address these fundamental points.

PG (Labour market and Infrastructure economist)

 

[Deleted member 22389]

All over the country, this situation is replicated. It is taking longer to get to and from work. More and more parents are jumping in cars and taking kids to school gates, which is helping to snarl up the morning rush hour even more. There seems to be cones everywhere and lane closures and diversions abound. Roads are constantly being dug up for purposes other than routine maintenance. People now regularly sit in their vehicles for long periods without moving and miss important meetings.
This is a small Island with finite resources and successive governments have tried to persuade us that an ever increasing population is sustainable and good for the economy. With this comes more and more vehicular movement and in key areas, more and more congestion. Our current network cannot cope and its only going to get a lot worse.

Peacehaven has now become a very frustrating place to drive around at certain times of the day, increase in cars from people moving in to the new build homes, and people moving in to existing houses bringing with them 1,2 or even 3 cars, vans.

The layout of the roads in Peacehaven means people park on both sides of the roads, so your constantly weaving in and out to get to places now, and with those stupid Islands they now put in the road to slow traffic and give priority to the other side just causes more congestion, and has made the roads a lot more dangerous.

I have also noticed the number of road accidents increasing along the South Coast Road over the last few years due to sheer number of cars. Sometimes you can be waiting 5 minutes just to get across the road in your car, if your pedestrian sometimes you get stuck on the Island.

Something has to change.

 

[Gwylan]

... the property boom will not last forever and the adjustment will be significant when it happens...

But if the population continues to increase and more housing stock is needed (not just because of the population rising but because more people live on their own), what will stop the property boom continuing? If we continually build fewer houses than are needed, won't the laws of supply and demand mean that prices will continue to rise?

 

[pb21]

Coincidentally, I read a piece in the Washington Post only yesterday afternoon about the very poor productivity position in the US:

Seems those pesky Tories are also f*cking over the world's biggest economy. Is there no end to their tyranny?

It’s a bit like how Gordon Brown single-handedly caused the global financial crisis in 2008!

 

[Peter Grummit]

But if the population continues to increase and more housing stock is needed (not just because of the population rising but because more people live on their own), what will stop the property boom continuing? If we continually build fewer houses than are needed, won't the laws of supply and demand mean that prices will continue to rise?

That is true in the very long term. But those factors have been present as long as I can remember and they have not prevented corrections occurring.

History suggests that the affordability constraint cannot keep rising indefinitely.The 89/90 negative equity crash was at an affordability index of 4 (house price to earnings ratio). The 2006 correction was at 5. It is now around 6. There is a significant risk in my view, exacerbated by the proportion of buy-to-lets which reduce the stickiness of the market.

PG

 

[Tom Bombadil]

I don't know where you got those figures from - the department of made-up statistics,I assume - but the increase in traffic last year was 2.2% - and that was the highest increase for some time - mainly driven by lower petrol prices. The DoT figures can be found here.

 

[Simontheseagull]

Have heard it suggested that poor productivity over recent years could be down to the growth of and an increasing use of mobile phones during worktime. Work interrupts checking twitter, checking Facebook, taking that phone call .............

 

[lawros left foot]

Coincidentally, I read a piece in the Washington Post only yesterday afternoon about the very poor productivity position in the US: https://www.washingtonpost.com/opin...3b2dac-f824-11e5-9804-537defcc3cf6_story.html

Seems those pesky Tories are also f*cking over the world's biggest economy. Is there no end to their tyranny?

Yeah, the same as when a Labour Prime Minister f*cked the whole world economy,back in 2008

 

[El Presidente]

Have heard it suggested that poor productivity over recent years could be down to the growth of and an increasing use of mobile phones during worktime. Work interrupts checking twitter, checking Facebook, taking that phone call .............

....posting on NSC during work hours.....

 

[Kalimantan Gull]

Its not really surprising that a Tory government is rubbish, they always are. I am however worried that the dramatic fall in confidence in Cameron and Osbourne is going to have a knock-on effect in the EU referendum. If they can just keep their shit together until then I'll be pleased.

 

[fataddick]

The only solution to road congestion is to ban private car ownership, other than in exceptional circumstances where a GENUINE need for one can be proven (eg disability, living in an otherwise inaccesible rural area, etc). Unfortunately, such is the fetishisation of the motor vehicle (see dangerous garbage like 'Top Gear') that no political party would ever dare suggest it. Just look at the way Brighton's recent Green (albeit minority) council did absolutely nothing to get cars off our streets, the bottle jobs.

 

[Shropshire Seagull]

The only solution to road congestion is to ban private car ownership, other than in exceptional circumstances where a GENUINE need for one can be proven (eg disability, living in an otherwise inaccesible rural area, etc). Unfortunately, such is the fetishisation of the motor vehicle (see dangerous garbage like 'Top Gear') that no political party would ever dare suggest it. Just look at the way Brighton's recent Green (albeit minority) council did absolutely nothing to get cars off our streets, the bottle jobs.

I heard someone talk about building a 6 lane [3 each way] motorway from Dover to Plymouth 100 metres out to sea.
Would solve all the south coast traffic congestion issues but might be a bit of an eyesore?
Bit like the road from Miami to Key West kinda thing.

 

[Bozza]

I heard someone talk about building a 6 lane [3 each way] motorway from Dover to Plymouth 100 metres out to sea.
Would solve all the south coast traffic congestion issues but might be a bit of an eyesore?
Bit like the road from Miami to Key West kinda thing.

Do we know how many people regularly need to commute from Dover to Plymouth or vice versa?

 

[Bozza]

Have heard it suggested that poor productivity over recent years could be down to the growth of and an increasing use of mobile phones during worktime. Work interrupts checking twitter, checking Facebook, taking that phone call .............

Funnily enough, it was this angle that took me to the Washington Post article I linked to earlier. A lazy copy and paste of some of that reasoning...

The period between 2010 to 2015 is when smartphone use transitioned from popular to ubiquitous, and with this transition new expectations about constant connectivity migrated from the social sphere to the workplace.

Not surprisingly, many in the knowledge sector (and beyond) talk about the last five years as a tipping point where their annoyance with their various inboxes metastasized to deep, soul crushing resentment.

With this rise of constant connectivity, a drop in cognitive ability is absolutely unavoidable.

This would be okay if our ability to think clearly and efficiently didn’t matter for the bottom line. But it does!

The main capital expenditure in the powerful knowledge sector of our economy is human brains: by reducing their ability to effectively produce valuable output, wouldn’t we expect a slow down in labor productivity?

(It’s here that many connectivity apologists began to talk about the soft opportunities and advantages of increased information and connection. But labor metrics are harsh. An active presence on social media or rapid email response times often do not measurably lead to more production of unambiguously rare and valuable output.)

Some modest support for this thesis shows up if you look hard enough (and embrace sufficient selection bias):

- The March productivity numbers, for example, show that the “business” category (which includes knowledge work) has a notably smaller increase in productivity than the various manufacturing industries measured.

- Tier one knowledge companies like Google are increasingly having to rely on “sprints,” in which a development team drops off the grid, and works night and day to hit a self-imposed deadline. I suspect — though can’t claim with confidence — that these sprints became necessary because without permission to disconnect from the message whirlwind, the average developer is too riddled with distraction to produce good code anywhere near cognitive capacity.

 

[Bob!]

Do we know how many people regularly need to commute from Dover to Plymouth or vice versa?

Build it, and they will come.



oh

 

[The Antikythera Mechanism]

I heard someone talk about building a 6 lane [3 each way] motorway from Dover to Plymouth 100 metres out to sea.
Would solve all the south coast traffic congestion issues but might be a bit of an eyesore?
Bit like the road from Miami to Key West kinda thing.

How would the ships in the Naval Dockyards at Portsmouth and the Isle of Wight ferries get out to sea?

 

[Pavilionaire]

It seems a bit odd that for 25-odd years in a row we were told that Britain's education results were getting better and better, yet now we are told one of the reasons for low productivity are 16-24 year olds not having the necessary skills for work.

I recognise that the high value, highly productive goods and services were oil production, financial and banking and that because they've dipped this had an effect on the nation's productivity figures overall.

The bottom line is that some of the richest individuals and companies are simply not paying enough tax into the system. The tax havens need to be shut down and the multinationals need to start paying their fair share.

 

[heathgate]

Shame this didn't all kick off before the election.

Oh but it did, we saw the same old tosh trolled out by Ed and his sidekicks in the Guardian etc,... luckily the voting public opted for stability and continued upward trends in most econom,ic indicators, rather than Ed's 180 degree turn disruption.

 

[heathgate]

And there lies the problem in just a few words.
A refusal to admit the facts and a selfish git who cares about nobody else except himself.

au contraire mon ami,..... I am looking ast the wider picture, the longer term outcomes, not just the quick fix throwing money we dont have at any and all issues, digging the nation into a deeper and deeper hole,... try to remember where we were in 2008.

 

[heathgate]

But if the population continues to increase and more housing stock is needed (not just because of the population rising but because more people live on their own), what will stop the property boom continuing? If we continually build fewer houses than are needed, won't the laws of supply and demand mean that prices will continue to rise?

Exactly,..... I love the leftys on this boardf, who in one breath bleat incessantly about the housing balloon, how it is evil capitalism at its worst,.. then in the next breath demand that we maintain open borders, increasing population, more house building etc etc,.... let me tell you sir, these houses are not council houses, they are in the main private builds, and will be sold as such, and will thus hand in hand with the population/migration issue, drive prices ever higher.