Labor productivity rose in 35 of 86 manufacturing industries

RP news wires
Tags: manufacturing

Labor productivity – defined as output per hour – rose in 46 percent of the 138 detailed manufacturing, mining and service-providing industries studied in 2008, the U.S. Bureau of Labor Statistics reported on June 10. This was down from the 62 percent that recorded productivity increases the previous year. Unit labor costs, which reflect the total labor costs required to produce a unit of output, declined in 30 percent of the industries, compared to 20 percent in 2007.

Fewer industries recorded productivity increases in 2008 than in any other year since 1988. Output rose in fewer industries and hours declined in more industries in 2008 compared to 2007. Output rose in 41 of the 138 industries examined, compared to 72 in 2007; hours declined in 101, compared to 79 industries in 2007. The percent of industries with output increases declined each year from 2005 to 2008, with the largest drop occurring in 2008. The percent of industries with declining hours rose each year from 2006 to 2008, with the largest increase occurring in 2008. 

Over the 1987 to 2008 period, labor productivity increased in 92 percent of the industries. Unit labor costs declined in 18 percent of the industries. Productivity growth rates for the industries studied show a more negative distribution in the most recent year compared to the longer-term period from 1987 to 2008.

With this release, productivity and cost measures are published for the first time for general freight trucking, local (NAICS 48411) and for general freight trucking (NAICS 4841). The latter combines the previously published measures for long-distance general freight trucking with the new measures for local freight trucking. Trends in the local freight trucking industry are strongly affected by business cycles and the overall economic environment. While productivity in this industry declined slightly in 2008, between 1994 and 2008 productivity increased at an average rate of 3.1 percent per year. The widespread adoption of onboard computer systems, satellite-based tracking, and wireless internet have contributed to substantial increases in efficiency in this industry.

Industry labor productivity measures are updated as data become available. Productivity data through 2008 for industries in wholesale and retail trade were published on August 28, 2009 and can be found on the BLS Labor Productivity and Costs web site at www.bls.gov/lpc.

Manufacturing
Labor productivity increased in 35 of the 86 detailed manufacturing industries in 2008, compared with 51 in 2007. Productivity growth was highest in the computer and electronic products subsector, led by the computer and peripheral equipment and magnetic media manufacturing and reproduction industries. Output rose in only 20 percent of the industries, compared to 45 percent in 2007, while hours declined in 78 percent of the industries, compared to 64 percent in 2007. However, unit labor costs declined in a greater number of industries than in the previous year – about 23 percent of the industries in 2008, compared to 14 percent in 2007.

Service-Providing
Labor productivity rose in slightly fewer of the measured service-providing industries in 2008 than in 2007. Led by wireless telecommunications carriers and employment placement agencies, labor productivity increased in 26 of the 47 detailed service-providing industries studied in 2008, compared with 32 in 2007. Output rose in 43 percent of the service-providing industries in 2008, compared to 64 percent in 2007, while labor hours declined in 70 percent, compared to 49 percent in 2007. Unit labor costs declined in 43 percent of the service-providing industries in 2008, compared to 32 percent in 2007. 

Mining
Labor productivity in the overall mining sector fell 3.0 percent in 2008, an improvement over the 7.6 percent decline in 2007. Although productivity fell or showed little change in the four mining extraction industries, productivity grew rapidly in support activities for mining, where output rose sharply while hours increased only modestly. Unit labor costs fell in only one of the five mining industries in 2008.

Among the largest (those with employment over 500,000) manufacturing and service industries and the overall mining sector, engineering services recorded the largest productivity increase and aerospace products and parts had the largest decline.

Year-to-year movements in industry productivity measures may be erratic, particularly in smaller industries. The annual measures based on sample data may differ from measures generated by a census of establishments in the industry. Annual changes in an industry’s output and use of labor may reflect cyclical changes in the economy as well as long-term trends. As a result, long-term productivity changes tend to be more reliable indicators of industry performance than year-to-year changes.