Responding to a 0.5% fall in UK labour productivity over Q1 2017, Mike Cherry, Federation of Small Businesses (FSB) National Chairman, says: “The disappointing statistics throw fresh light on persistent structural weaknesses in the UK economy. Productivity is being stifled by chronic underinvestment, exacerbated by current unprecedented uncertainty, and reflected in sluggish wage growth.
“We know that small firms are continuing to hire, but are struggling to pay more as they absorb surging business costs, now at their highest in four years.
“Two thirds of small firms are not planning to increase capital investment over the next three months. One in seven are planning to decrease investment levels. No doubt some are delaying decisions as they wait for further clarity on the implications of Brexit.
“All the evidence indicates that small business productivity gains would be an economic game-changer. To achieve that boost, the Government has to deliver on its promise of an ambitious industrial strategy. It’s a strategy that must have small firms at its heart, supporting them in supply chains, clamping down on late payments and improving their ability to access to finance.”