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Eurozone labour productivity growth — the core building block of economic success — rose 1 per cent in 2017 and is forecast to increase 1.1 per cent this year, according to the analysis. The figure is within reach of the 1.4 per cent annual rate seen before years before the crisis.
Britain’s productivity growth rate has also improved — from 0.6 per cent last year to a projected 0.8 per cent in 2018 — but that is far behind the 2.1 per cent Britain sustained before the financial crisis.
The figures demonstrate that the eurozone recovery is well established despite recent dips in business surveys. Higher levels of business investment should help maintain the upswing.
Bart van Ark, chief economist at the Conference Board, the US-based business research organisation, said that until recently, a substantial part of the European productivity revival of recent years was cyclical and was becoming embedded.
“However, as the acceleration is projected to continue through 2018, the impact of investment and digital innovation could throw off structural productivity improvements,” he added.
In Britain, 2017 was a tale of two halves, with output per hour worked declining in the spring and early summer but rebounding in the second half of the year, a pattern the Office for Budget Responsibility, government’s fiscal watchdog, said was the result of volatile data on hours.
The Conference Board’s assessment was that with business investment in the doldrums and employment already high, productivity growth and overall economic performance would remain sluggish this year. [...]
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