|
|
|
|
![]() |
![]() |
 CIPD PRESS RELEASE 1 October 2008
Slump in productivity and rising unit wage costs
spells bad news for jobs
Figures on UK productivity and unit wage costs
published today by the Office for National Statistics
(ONS) underline the deterioration in the economy
and point to mounting pressure on employers to cut
jobs, says John Philpott, Chief Economist at the
Chartered Institute of Personnel and Development
(CIPD).
Dr Philpott comments:
"Productivity measured by output per worker has
slumped. Each UK worker is now producing less than
in the last sharp productivity downturn in 2005 when
employers hoarded staff during what was a short and
mild economic slowdown. At that time, with little
inflationary pressure in the economy, employers were
prepared to absorb rising unit wage costs and take
a short-run hit on profits rather than cut jobs.
But this time around, as the economy moves into
recession and with non-labour costs like fuel and
energy and borrowing charges high, many employers
will be feeling the squeeze.
"Today's figures indicate that employers have
responded by working staff harder with the result
that output per hour improved slightly in the second
quarter, although still well below what was being
achieved in 2006 and 2007. Modest pay rises have
also helped contain what would otherwise have been
an even sharper rise in unit wage costs. However,
scope for adjusting to the emerging economic downturn
without cutting jobs is becoming increasingly limited.
"Even without the impact of the latest global
financial market turmoil this makes a late autumn
and winter shake-out of jobs all the more likely -
and means that the Bank of England should make an
immediate and substantial cut in interest rates."
Notes to editors:
* John Philpott is available for interview
* The Chartered Institute of Personnel and
evelopment (CIPD) has over 130,000 members
and is the leading professional institute for
those involved in the management and development
of people
CIPD press enquiries:
Gregor Ridley / Christian Zarro
CIPD Press Office
151 The Broadway, London SW19 1JQ
020 8612 6400
|
![]() |
 |
|
|
