Responding to the latest productivity statistics that showed a 0.5% fall following two consecutive quarters of zero growth, Federation of Small Businesses (FSB) National Chairman Mike Cherry, said:
“Today’s figures are a clear signs that the continued political uncertainty and impending threat of no-deal are having a serious impact on small businesses and the wider economy.
“Exports, investments and hiring intentions have plummeted as uncertainty over the country’s exit from the European Union continues to prevent any long-term planning, and businesses batten down the hatches to prepare for no-deal.”
Both the services and manufacturing sectors saw a fall in labour productivity growth of 0.8% and 1.9% respectively, compared to this time last year.
And despite the number of jobs increasing by 1.3% there was no growth in output per job.
Recent FSB research found that fewer than one in seven (13%) small employers are planning to take on additional staff in the next three months, the lowest proportion since Q4 2017.
Mike Cherry said:
“Our own recent Small Business Index revealed a fifth straight negative quarterly reading for first time in nine-year history.
“This unwillingness to invest is partly down to the ongoing unpredictability which is looming large for all businesses. The political uncertainty is not only dragging down confidence, but is now also a drag on the UK’s productivity. Businesses are steeling themselves for a no-deal just three weeks away.
“The UK Government and the EU must urgently break the impasse and reach a resolution in order to safeguard the futures of small firms.
“Businesses are calling out for clarity and these figures will only continue to deteriorate until politicians on both sides find a way forward that protects our economy.”