Dr John Philpott, Chief Economic Adviser at the Chartered Institute of Personnel and Development (CIPD) comments as follows on official labour productivity figures for Q4 2011 published earlier today by the Office for National Statistics (ONS):

“There is good news but also worrying news in the latest official snapshot of UK productivity. Manufacturing productivity is powering ahead which bodes well for business competitiveness and export led growth. But signs that service sector productivity is falling and putting upward pressure on unit labour costs spells trouble for jobs and pay. While businesses operating in private sector services continue to experience weak demand they will not only be reluctant to hire more staff but may need to ask existing staff to accept a further period of pay restraint to avoid job cuts. With the service sector accounting for the vast majority of UK employment, and private sector service employers the main hope for the new jobs needed to offset the ongoing public sector jobs cull, these latest growth and productivity figures increase the  risk of a weak ‘job loss recovery’ this year.”

Source: CIPD