Responding to official figures showing that quarterly labour productivity growth fell by 0.4%in Q1, Tej Parikh, Senior Economist at the Institute of Directors, said:

“The UK’s productivity crisis isn’t going to disappear anytime soon. After two quarters of growth, Q1’s dip in output per hour is a big disappointment and a timely reminder that there’s much work yet to be done.

“Whilst we’ve seen a continued pick-up in employment, output growth has been subdued. We’re hiring more people than ever, yet each worker is unable to produce much more. This means businesses cannot offer inflation-beating wages and that our long-term economic growth potential remains constrained.

“There are many pieces to the puzzle, and the Industrial Strategy is just starting point. But we need action now, particularly in helping to lift the ‘long tail’ of surviving SMEs into thriving ones. These businesses account for the bulk of UK jobs, and need more support in developing their digital infrastructure and management practices to boost efficiency in their organisations.”