How bad is this recession?

A number of commentators have pointed out that this is the slowest recovery from recession in more than a hundred year.  Taking output measures this is correct.  But taking employment as the main measure of recession it is not.

Both the 1980s and the 1990s saw much sharper job losses, while the 1970s recession saw a similar but slightly less sharp loss, as the Chart shows.

What does this mean?  Partly it explains why the current downturn has not produced the angst that the last two have.  But it also raises more questions than it answers.  If the output figures are true, then productivity has dropped massively as there is much less output but only somewhat fewer jobs.  Can this productivity be clawed back?  Or perhaps the output figures themselves have become less meaningful and the output gains and losses are less easily measurable than they used to be.

If the people are still largely in work, then an expansion of demand can soon be translated into output.  If productivity has been permanently hit, then there is less capacity and it will be harder to expand.  My instinct is that the output is there for the taking, once confidence returns and demand with it.

Is this an argument for more borrowing, to create that extra demand?  Not necessarily as there is no guarantee it creates the wherewithal to pay back that borrowing later.  This is the crux which too many people forget

 by Bridget Rosewell, Senior Partner

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Ellie is a partner at Volterra, specialising in the economic impact of developments and proposals, and manages many of the company’s projects on economic impact, regeneration, transport and development.

With thirteen years experience at Volterra delivering high quality projects to clients across the public and private sector, Ellie has expertise in developing methods of estimating economic impact where complex issues exist with regards to deadweight, displacement and additionality.

Ellie has significant experience in estimating the economic impact across all types of property development including residential, leisure, office and mixed use schemes.

Project management of recent high profile schemes include the luxury hotel London Peninsula, Battersea Power Station and the Nova scheme at London Victoria. Ellie has also led studies across the country estimating the economic and regeneration impact of proposed transport investments, including studies on HS2 and Crossrail.

Ellie holds a degree in Mathematics and Economics from the University of Cambridge.