Covid-19 and Productivity - Impact and Implications - By Paul Mortimer-Lee and Adrian Pabst (eds.)

The Productivity Institute’s mission is to lay the foundations for an era of sustained and inclusive productivity growth based on the premise that the long-term underperformance of productivity in the United Kingdom threatens a future of global excellence in economic performance and shared prosperity across the nation. [...] Official measures of non-market services suggest a sharp decline, in particular in health and education (see Figure 2.5), but due to the way prices are calculated in the health sector (as the ratio of nominal expenditures to the measurement of activity), inflation in the health sector has been overestimated and the output of health services has almost certainly increased. [...] xvii Figure C Ratio of regional productivity to the UK average Source: NIESR The sectoral findings highlight the importance of the ICT and electronics sectors which appear to have attracted the lion’s share of foreign investment before Covid-19; since then, the investment in the environmental (green) technology sector has risen in importance. [...] Figure 2.5 shows a sharp decline in output and productivity in the health sector in 2020, despite the evident increase in some NHS activities during the pandemic, such as critical care, the new test The Covid-19 Shock and Productivity: A Sectoral View | 17 and trace system, and the rollout of vaccination programmes. [...] Thus, while the reduction of the employment in private non-traded services and the rise in the employment in the finance sector in response to a social consumption shock would raise total output per head, ceteris paribus, the reallocation to the construction sector, one of the lowest productivity sectors, could offset this effect.