Productivity performance remains weak, with an average annual gain of only 1.2% in the past five years. The shortages of skilled labour are likely to remain acute for an extended period of time even if educational outcomes improve. Job-searching costs are high, making it that much more difficult for low-skilled people to find employment.
And the relatively high concentration in many sectors, together with elevated regulation, results in barriers to entry for new firms.10 Consequently, even with the gradual removal of infrastructure bottlenecks – for example, as more power supply comes on stream – it is difficult to envisage much of a pickup in potential growth in the next two years or so.