Productivity growth in the UK services sector slowed dramatically in the final quarter of the year, according to the Office for National Statistics (ONS). Output per hour worked was estimated to be only 0.2% higher than the previous year. This stagnation is largely attributed to severe labor shortages and recruitment difficulties within hospitality and professional services.
With rising wage bills and sluggish output, firms are struggling to improve their competitive positioning. For many service providers, the lack of skilled staff has meant running below full capacity, which dampens overall productivity. Capital investment in digital platforms has helped offset some of this decline, but training times for new recruits continue to drag down efficiency metrics. Industry leaders warn that without targeted vocational training schemes, service-sector productivity will remain flatlining, limiting long-term economic expansion.
Define the term 'productivity' (Extract B, line 2).
156 exam-style questions on AQA A Level Economics 1.4 Production, costs and revenue, covering 1.4.1 Production and productivity, 1.4.2 Specialisation, division of labour and exchange, 1.4.3 The law of diminishing returns and returns to scale (A-level only), 1.4.4 Costs of production, 1.4.5 Economies and diseconomies of scale, 1.4.6 Marginal, average and total revenue, 1.4.7 Profit, and 1.4.8 Technological change (A-level only). Each one has a worked solution and a mark scheme showing where the marks go.