A number of prominent experts have sounded notes of caution in the wake of last week’s positive GDP figure, which showed that the UK economy grew at its strongest annual pace since 2007.
Ian Brinkley, chief economist at The Work Foundation, noted something that will strike a chord with many jobbing Umbrella Company Employees and others in the contracting community: the recovery is unlikely to grow appreciably stronger unless productivity increases.
Contractors will instinctively appreciate this, as they are profoundly aware that their reputation with clients and their prospects for future assignments depend upon their capacity to get the work done as efficiently as possible.
Mr Brinkley noted that UK employment was growing significantly faster than productivity. He said: “Preliminary GDP figures in recoveries are often revised upwards, so the underlying position may be a bit better than we think. Either way, however, we have a jobs-rich and productivity-poor recovery, and that may not be sustainable over the medium term.”
Andrew Hunter, co-founder of the jobs search engine Adzuna, also pointed to less positive trends beneath the headline figures. While the service sector did particularly well in Q4 2013, the construction sector actually shrank. Adzuna’s figures indicate that although vacancies have been rising, advertised salaries have been falling.
Mr Hunter added: “With no immediate signs of this changing, the decline in real wages remains a thorn in the side of our economic recovery, affecting families the length and breadth of the country.”
CBI director general John Cridland was more bullish about the economy, however, forecasting that it will strengthen further during 2014.