{"id":13154,"date":"2021-07-08T14:00:00","date_gmt":"2021-07-08T13:00:00","guid":{"rendered":"https:\/\/www.economicsobservatory.com\/?post_type=question&p=13154"},"modified":"2022-02-02T10:43:04","modified_gmt":"2022-02-02T10:43:04","slug":"how-has-covid-19-affected-uk-productivity","status":"publish","type":"question","link":"https:\/\/www.economicsobservatory.com\/test\/how-has-covid-19-affected-uk-productivity","title":{"rendered":"How has Covid-19 affected UK productivity?"},"content":{"rendered":"\n

Productivity is one of the big economic questions in the UK. The amount workers can produce \u2013 their \u2018labour productivity\u2019, is a major driver of economic and wage growth. The 2007-2009 financial crisis saw UK labour productivity plummet. We would expect Covid-19 to cause a similar drop. But according to the latest data<\/a> from the Office for National Statistics (ONS), labour productivity, despite dipping initially, has been rising over the past year, mirroring pre-pandemic trends. In the first quarter of 2021, productivity rose by 0.9%, around twice the pre-pandemic rate.<\/p>\n\n\n\n

Figure 1 shows how each crisis affected labour productivity growth over time. Both downturns led to an initial drop in output per hour of almost 2%. But in the following quarter, 2008 saw a sharp drop in productivity (blue line) while 2020 saw a sharp rise (pink line). Despite 2020 productivity dipping slightly at the nine-month point, the fall is insignificant compared with the record-low drop of almost 5% at the equivalent point in 2009. One year after the start of each crisis, 2021 productivity grew while 2009 productivity fell by 3.4%. But what caused this disparity?<\/p>\n\n\n\n

Figure 1: Quarter-on-quarter productivity growth, 2007-2009 versus 2019-2021<\/h4>\n\n\n
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