Services Productivity Falls While Economy Grows

Statistics released by the ONS show that whole economy labour productivity in terms of output per worker increased by 0.3% in the first quarter of 2011 compared with the same quarter a year ago while output per hour also increased by 0.3%. Unit wage costs increased by 0.6%. Output per job in the manufacturing sector increased by 4.4%. while in the service sector it fell by 0.5%.

Unemployment Up To 2.49m

The unemployment rate for October to December 2010 was 7.9% or 2.49m unemployed people. Youth unemployment (18-24 year olds) was 762,000 and is at its highest since 1993.

There were 29.12 employed people and an employment rate of 70.5%. Inactivity was at 23.4% or 9.36m inactive people. The public sector employed 6.01 people in September 2010, 33,000 down from June and the number of people employed in the private sector was 23.11m unchanged from June 2010.

Actual hours worked totalled 924.6m in the three months to December, 3% up on the three months to September. Average weekly hours worked in the three months to December totalled 31.8, up 0.2 from three months to September 2010.

Total pay, which includes bonuses, went up by 1.8% on the year earlier and regular pay went up by 2.3% on the year earlier. Private sector average total pay was £447/week in December 2010 and public sector pay average weekly earnings was £467. Average regular pay in the private sector was £419/week and in the public sector £467/week. The claimant count was 1.46m up on the quarter but down on the year.

Productivity was up 1.7% in Q3 2010 compared with Q3 2009 and whole economy wage costs fell by 0.5% over the same period.In December 2010, 7,000 working days were lost because of 14 stoppages in labour disputes and over the year 365,000 days lost from 88 stoppages.

There were 30.7m workforce jobs in September 2010, up on the quarter but down over the year with most jobs increases in accomodation and food services activities and between November 2010 and January 2011 there were 500,000 vacancies (503,000 in same period 2009) and a vacancy ratio of 1.9 per 100 employee jobs. Redundancies totalled 145,000 in the three months to December 2010 unchanged on the previous three months but down 23,000 from a year earlier or 5.8 per 1000 employees.

Productivity Up By 1.4%

There has been an increase of 1.4% in whole economy output per worker in the second quarter of 2010 compared with Q2 2009. Output per worker increased by 0.5% quarter on quarter. Unit wage costs increased by 0.3% on last year and 2.4% down on the previous quarter.

First Quarter Increase In Productivity

Productivity increased in the first quarter of 2010 in all four key productivity measures covered by the ONS for the whole economy. Output per worker increased by 1.3% compared with the same time last year and 0.6% on the previous quarter. Output per job increased by 1.6% on last year and 0.6% on previous quarter. Output per hour increased by 1.2% on last year and 0.3% on previous quarter and unit wage costs increased by 3.9% compared with the same time last year and by 1.2% on the previous quarter.

Total productivity output per job was 2.9%. Total manufacturing output per job was 3.7%. The transport equipment sub-section contributed an increase of 25.6% in output per job to the overall manufacturing figure and 21% output per hour worked and 'other non-metallic minerals' contributed an increase of 13.3% in output per job on the same quarter a year ago.

Services increased output per job by 0.4% on the same time last year and 0.3% per job and 0.2% per hour on the previous quarter. Distribution hotels and restaurants increased output per hour by 4.5% on the same quarter a year ago and distribution 6.5%.

The latest available data on agriculture, forestry and fisheries show that output fell by 8.5% per job and by 12% per hour worked in 2009 compared with 2008.

Fall In Unemployment

Unemployment fell by 34,000 over the quarter to reach 2.47m but was up 92,000 on the year. The unemployment rate for the three months to May was 7.8%, down 0.1% on the quarter but up 0.3 points on the year. The number of long-term unemployed increased by 61,000 to reach 787,000. The inactivity rate was down 0.2 or 62,000 on the quarter to 21.3% leaving 8.10 million working age people inactive. The claimant count fell by 20,800 on the month and 100,100 on the year to 1.46m or 4.5%.

The employment rate to May 2010 was up 0.3 to 72.3% or 28.98m employed people, an increase of 160,000. It was 0.6 down on last year. The public sector employed 6.09m and the private sector 22.78m.

Vacancies increased by 10,000 to 486,000 over the quarter. The sector with the largest increase in vacancies was wholesale, retail and motor vehicle repairs with an increase of 11,000 on the quarter.

The earnings annual growth rate for total pay for the quarter to May was 2.7%. Average total pay was £453 per week. Regular pay was £428 per week on average. The growth rate for regular pay was 1.8%. The average total in the private sector was £453 and average regular £418 per week. In the public sector the average total pay was £453 and average regular pay was £461 per week.

There were 30.77m workforce jobs in March 2010 with administration and support services increasing by 90,000. Total hours worked in the three months to May 2010 amounted to 911.4m giving an average of 31.5 hours a week. Output per worker decreased by 1.4% in Q4 2009. Unit wage costs increased by 2.4% over the same period. Nine stoppages in May 2010 cost 13,000 working days and 722,00 working days were lost in 97 stoppages over the year.

Long-term Unemployment At Record Levels

The employment rate according to the latest ststistics from the ONS is 72.1% equivalent to 28.86m employed people. Full-time worker numbers were down 56,000 over the quarter, but part-time work increased 61,000. 1.08m people were working part-time because they couldn't find a job (highest since 1992).

The unemployment rate was up 0.1% over the quarter to 7.9% leaving 2.47m people unemployed up 23,000 The were 1.48m on Jobseeker's Alowance. The long-term unemployed increased by 85,000 to reach 772,000, the highest figure since April 1997. The number of people unemployed for up to six months fell by 42,000 to 1.17m.

There were 30.75m workforce jobs in December 2009, down 533,000 on a year earlier. There were 5.2 unemployed people for every vacancy. The number of vacancies for May 2010 was 492,000 an increase of 7,000. All industry sector showed some form of movement over the quarter. In all 173,000 employees were made redundant, down 137,00 on last year in 3 months to April, that is 7/1000 employees.

The inactivity rate went up to 21.5%, an increase of 29,000 to 8.19m, a record high. Working age inactive people, including students and the long-term sick, increased by 58,000 to 2.07m. Total hours worked per week were 907.3m in three months to April. Average weekly hours 31.5, unchanged.

The annual growth rate for pay was 4.2% for three months to April from 4.3% in March. Annual regular pay growth was 1.9% for three months to April from 2% in March. Regular pay rose by 1.9%. Average weekly earnings including bonuses was £455/week in April 2010, a rise of 4.2% over the three months. Average weekly wage excluding bonuses was £428. In the private sector including bonuses was £450 up 4.5%, excluding bonuses £419. In the public sector including bonuses £463, up 4.2% over the year, excluding bonuses £458 up 3.7%.

Output per worker was 1.4% lower than in Q4 2009 on the year. Unit wage costs were up 2.4%. 5 stoppages cost 2000 working days lost in April. Over year to April 98 stoppages cost 713,000 lost working days.

Business Investment Down In Euro And EU27 Areas

The gross investment rate of non-financial corporations in the EU27 zone was 20.3% in Q4 2009 from 20.6% in Q3 according to Eurostat. In the eurozone the rate was 20.4% in Q4 from 20.7% in the previous quarter. The gross investment rate of non-financial corporations in the eurozone fell as gross fixed capital formation fell 0.9% and value added grew 0.6%. Eurozone stocks of materials, supplies and finished goods continued to decrease for the fourth quarter in a row.

The business profit share of non-financial corporations in EU27 was 37.1% in Q4 2009 from 36.9% in 2008. The eurozone profit share was 37.9% from 37.5% in Q3 2009. The eurozone profit share of non-financial corporations increased as value added grew 0.6%. Wage costs plus taxes minus subsidies on production was unchanged.

Productivity Down By 1.4%

Whole economy output/worker productivity decreased by 1.4% Q4 2009 compared with same period last year from a fall of 3.3% on the previous quarter. Quarter-on-quarter output/worker productivity increased 0.5% up from 0.2% in the previous quarter. Output fell by 2.8% in the quarter from a fall of 4.9% in the previous quarter. Another measure of productivity looks at it in terms of output per hour worked. Using this measure, productivity fell by 0.3% in Q4 2009 compared with last year. Total hours worked fell by 2.5% on last year. Comparing the sectors shows that manufacturing output/hour increased by 3.9% and services decreased by 1.2%.

In the service industries output/job fell by 2% in Q4 2009 compared with the previous year. The fall in the previous quarter was 3.4%. Output/hour deceased by 1.2% from 2.3% in the previous quarter. Business services and finance output/job fell 3.9% and output/hour fell 3%. Manufacturing output/job productivity increased by 2.8% and output/hour increased by 3.9% on the same quarter last year. Unit wage costs were up 2.4% on last year's 4.2%. In agriculture, forestry and fisheries, slow growth sectors, output/job fell by 7.4% and output/hour by 13.5%. Manufacturing unit wage costs increased by 0.4%.

Across the regions in 2008, productivity measures show GVA per job to be highest in London at 140.9 (national average = 100) and lowest in Wales and Northern Ireland at 84. Scotland was 95.4. In England, the average was 101.8, the lowest were the North West and Yorkshire and the Humber at 87.4. The GVA per hour measure shows London the highest at 132.7 and Northern Ireland the lowest at 81.4. Wales reported 86.4 and Scotland 96.3. In England, the average was 101.7 but the lowest was the North West at 87.9. GVA per head was highest in London with 170.6, and lowest was Wales with 74. Northern Ireland reported 78.7 and Scotland 97.5. In England the lowest was the North East with 77. The average for England was 102.5.

Falls In Employment Rate And Pay In July

There isn't much good news in the ONS Labour Market Survey for September. The number of unemployed, the unemployment rate and the claimant count have all increased. The number of inactive people of working age and the inactivity rate have increased and growth in average earnings has decreased in the three months to July, the period the survey covered. The employment rate has fallen to 72.5% and the total employment level was 28.89 million.

There was another fall in the number of people working in manufacturing at 2.65 million, down 221,000. Total hours worked per week was 908.7 million. Average weekly hours in the quarter to July was 31.5 down 0.1 from April.

The unemployment rate was 7.9% or 2.47 million in the quarter to July 2009, up 743,000 on last year. There were 567,000 people unemployed for over 12 months and 731,000 18-24 year olds. There were 22,000 people 25 years and over claiming for over 2 years. The claimant count was 1.61 million up 693,700 on last year. The economic inactivity rate was 21.1% or 7.99 million in the quarter. That is an increase of 97,000 over the quarter and 125,000 over the year.

Average earnings however increased 2.2% on last year, down 0.2% from June. Pay including bonuses was up 1.7% on the year. Unit wage costs were up 3.6% in the first quarter of the year. In the quarter to July 2009 manufacturing unit wage costs increased by 4.3% and productivity decreased by 3.4%.

There were a total of 434,000 job vacancies in the three months to August, down 12,000, which meant there were 1.7 vacancies for every 100 employee jobs. There were also 246,000 redundancies over the quarter at a rate of 9.8 for every 1000 employees. In July 2009 there were 24,000 working days losts due to labour disputes from 10 stoppages.