Economic News Release

Productivity and Costs by Industry: Selected Service-Providing and Mining Industries News Release



Historical, technical                                USDL 08-0687
  information:   (202) 691-5618                      FOR RELEASE: 10:00 a.m. EDT
Media contact:   (202) 691-5902                      Wednesday, May 21, 2008
Internet: http://www.bls.gov/lpc/home.htm


                          PRODUCTIVITY AND COSTS BY INDUSTRY:
                 SELECTED SERVICE-PROVIDING AND MINING INDUSTRIES, 2006

      Labor productivity, defined as output per hour, rose in nearly two-
thirds of the measured service-providing and mining industries in 2006, about 
the same proportion as in 2005.  Output rose in 66 percent of the industries, 
while labor hours increased in 59 percent. Unit labor costs fell in 
approximately 20 percent of the industries in 2006.  
        
      Over the period 1987 to 2006, labor productivity increased in 86 percent 
of the industries, significantly more than in 2006. Output grew in 91 percent, 
while hours increased in 66 percent of the industries.  Unit labor costs fell in 
one quarter of the industries over the longer period.
      
      Productivity data for industries in manufacturing, retail trade, 
wholesale trade, and food services and drinking places are published in separate 
releases that can be accessed online at 
http://www.bls.gov/schedule/archives/prin_nr.htm.

2005-2006 change

      In 2006, output per hour increased in 27 of the 40 detailed service-
providing industries and in one of the 4 detailed mining industries studied. 
(See table 1.)  Three industries recorded double-digit productivity growth: 
video tape and disc rental (NAICS 53223), 22.4 percent; wireless 
telecommunications carriers (NAICS 5172), 14.1 percent; and truck, trailer, and 
RV rental and leasing (NAICS 53212), 11.8 percent.  
      
      Productivity fell the most in amusement and theme parks (NAICS 71311), 
11.1 percent, and in refrigerated warehousing and storage (NAICS 49312), 9.2 
percent. Labor productivity fell 9.1 percent in the mining sector (NAICS 21) and 
7.1 percent in coal mining (NAICS 2121).  (Results for the mining sector as a 
whole are not consistent with changes in the detailed mining industries shown in 
table 1, because BLS does not publish measures for every detailed mining 
industry.)

      Unit labor costs, which reflect hourly compensation and productivity, 
rose in more than three-fourths of the service-providing industries in 2006, and 
in all of the mining industries.  The biggest increases in unit labor costs 
occurred in mining, led by a 19.2 percent increase in oil and gas extraction 
(NAICS 211).  Among the service-providing industries, the biggest increase 
occurred in hair, nail, and skin care services (NAICS 81211), 10.0 percent.  
      
      Several service-providing industries reduced their unit labor costs in 
2006. Wireless telecommunications carriers (NAICS 5172) and video tape and disc 
rental (NAICS 53223) recorded unit labor cost reductions of 19.8 and 8.2 
percent, respectively. These were the two industries where productivity 
increased the most. 

Long-term trends

      Between 1987 and 2006, labor productivity increased in 34 of the 40 
detailed service-providing industries and in all of the covered mining 
industries.  Software publishers (NAICS 5112) recorded the greatest productivity 
growth over the period, 16.2 percent per year on average, followed by wireless 
telecommunications carriers (NAICS 5172), with growth of 9.7 percent.  Labor 
productivity declined in more of the measured service-providing and mining 
industries in 2006 than over the longer-term period.

      Unit labor costs increased in three-quarters of the detailed service-
providing industries and in all but one mining industry from 1987 to 2006.  Unit 
labor costs grew most rapidly in oil and gas extraction (NAICS 211), 5.8 percent 
per year on average.  The most rapid declines in unit labor costs occurred in 
the two industries with the fastest productivity growth, software publishers 
(NAICS 5112) and wireless telecommunications carriers (NAICS 5172), 9.4 and 6.4 
percent, respectively.

New Industries

      Productivity and cost measures for three new industries are presented 
here for the first time: warehousing and storage (NAICS 493), general 
warehousing and storage (NAICS 49311), and refrigerated warehousing and storage 
(NAICS 49312).  Measures for these new industries were constructed using 
standard BLS methods as described in the Technical Note.  Output measures for 
the warehousing and storage industries are based on detailed annual receipts 
data collected by the U.S. Bureau of the Census, deflated with BLS producer 
price indexes (PPIs).  The labor hours measures reflect data from the BLS 
Current Employment Statistics (CES) survey and the Current Population Survey 
(CPS). The labor productivity measures for these industries begin in 1992.

Revisions

      The measures in this news release incorporate current data from the 
Census Bureau’s 2006 Service Annual Survey and other sources.  Measures in this 
release replace the mining and service industry series published in the news 
release Productivity and Costs by Industry: Selected Service-Providing and 
Mining Industries, 2005 (released June 8, 2007), and in table 50 of the Monthly 
Labor Review.  All of the measures for 2006 in this release are preliminary and 
subject to revision.
      
      The industries included in this release are classified according to the 
2002 NAICS. Industry productivity measures will be classified according to the 
2007 NAICS in 2009, with the publication of data for 2007.
      
Additional Information

      Industry productivity and related indexes and rates of change can be 
accessed electronically by visiting the Labor Productivity and Costs web site at 
http://www.bls.gov/lpc/home.htm.  Data on industry employment, hours, labor 
compensation, value of production, and the implicit price deflator for output 
for these industries are available upon request by calling the Division of 
Industry Productivity Studies (202-691-5618) or by sending a request by e-mail 
to dipsweb@bls.gov. While the index numbers and rates of change reported by BLS 
in this news release are rounded to one decimal place, all industry productivity 
percent changes are calculated using index numbers to three decimal places.
      
      Material in this report is in the public domain and, with appropriate 
credit, may be used without permission. Information in this report will be made 
available to sensory-impaired individuals upon request. Voice phone: 202-691-
5618; TDD message referral phone number: 1-800-877-8339.




                             Technical Note

Labor Productivity

      The industry labor productivity measures describe the 
relationship between industry output and the labor time involved in its 
production.  They show the changes from period to period in the amount of goods 
and services produced per hour.  Although the labor productivity measures relate 
output to hours of employees or all persons in an industry, they do not measure 
the specific contribution of labor or any other factor of production.  Rather, 
they reflect the joint effects of many influences, including changes in 
technology; capital investment; utilization of capacity, energy, and materials; 
the use of purchased services inputs, including contract employment services; 
the organization of production; managerial skill; and the characteristics and 
effort of the workforce.
      Long-term productivity trends tend to be more reliable indicators of the 
performance of an industry than are year-to-year changes.  The annual changes in 
an industry’s output and use of labor may reflect cyclical changes in the 
economy as well as long-term trends.  

Output

      Industry output is measured as an annual-weighted index of the changes 
in the various products or services (in real terms) provided for sale outside 
the industry. Real industry output is usually derived by deflating nominal sales 
or values of production using BLS price indexes, but for some industries it is 
measured by physical quantities of output. 
      Industry output measures are constructed primarily using data from the 
economic censuses and annual surveys of the U.S. Census Bureau, U.S. Department 
of Commerce, together with information on price changes primarily from BLS. 
Output measures for some mining and utilities industries are based on physical 
quantity data from the Energy Information Administration, U.S. Department of 
Energy, while output measures for some transportation industries are based on 
physical quantity data from the Bureau of Transportation Statistics, U.S. 
Department of Transportation. Other data sources for some industries include the 
U.S. Geological Survey, U.S. Department of the Interior; the U.S. Postal 
Service; the Federal Deposit Insurance Corporation; and the Postal Rate 
Commission.

Labor Hours

      The primary source of industry employment and hours data is the 
BLS Current Employment Statistics (CES) survey. The CES provides monthly data on 
the number of total and nonsupervisory worker jobs held by wage and salary 
workers in nonfarm establishments, as well as data on the average weekly hours 
of nonsupervisory workers in those establishments. CES data are supplemented or 
further disaggregated for some industries using data from the BLS Quarterly 
Census of Employment and Wages (QCEW), the Bureau of the Census, or other 
sources. Data from the Current Population Survey (CPS) are also used to 
supplement the CES data. The industry productivity program estimates the average 
weekly hours of supervisory workers for each industry using data from the CPS 
together with the CES data. Data from the CPS are also used to estimate the 
employment and hours of self-employed and unpaid family workers in each 
industry.  Other sources of employment and hours data for some service 
industries include the American Association of Railroads, the U.S. Department of 
Transportation, and the U.S. Postal Service. Hours of all workers in an industry 
are treated as homogeneous and are directly aggregated.  

Unit Labor Costs

      Unit labor costs represent the cost of labor input required 
to produce one unit of output.  The unit labor cost indexes are computed by 
dividing an index of industry labor compensation by an index of real industry 
output.  Unit labor costs also describe the relationship between compensation 
per hour and real output per hour (labor productivity). Increases in hourly 
compensation increase unit labor costs; increases in labor productivity offset 
compensation increases and lower unit labor costs. 
      Compensation, defined as payroll plus supplemental payments, is a 
measure of the cost to the employer of securing the services of labor.  Payroll 
includes salaries, wages, commissions, dismissal pay, bonuses, vacation and sick 
leave pay, and compensation in kind.  Supplemental payments include legally 
required expenditures and payments for voluntary programs.  The legally required 
portion consists primarily of Federal old age and survivors’ insurance, 
unemployment compensation, and workers’ compensation.  Payments for voluntary 
programs include all programs not specifically required by legislation, such as 
the employer portion of private health insurance and pension plans.




Table 1.   Percent change in output per hour, output, hours, compensation, and unit labor costs, 2005-2006

                                                                                      Percent change, 2005-2006
                                                                2006     ---------------------------------------------------
 NAICS                        Industry                       Employment   Output                        Labor     Unit labor
 code                                                       (thousands)  per hour   Output    Hours  compensation   costs

                         Mining Industries

21       Mining                                                   619      -9.1       0.8      10.9      19.0       18.0
211          Oil and gas extraction                               135      -7.0       0.7       8.2      20.0       19.2
2111             Oil and gas extraction                           135      -7.0       0.7       8.2      20.0       19.2
212          Mining, except oil and gas                           220      -3.0       1.1       4.2       8.9        7.7
2121             Coal mining                                       78      -7.1       0.0       7.7       9.9        9.8
2122             Metal ore mining                                  32      -5.1       3.7       9.3      18.6       14.4
2123             Nonmetallic mineral mining and quarrying         110       0.4       0.8       0.4       4.2        3.4

                    Service-Providing Industries

                             Utilities

2211     Power generation and supply                              396       0.9       0.3      -0.6       2.0        1.7
2212     Natural gas distribution                                 106      -2.6      -3.0      -0.5       6.3        9.7

                   Transportation and Warehousing

481      Air transportation                                       457       5.1       1.5      -3.5      -2.4       -3.8
482111   Line-haul railroads                                      186       3.1       4.7       1.5       5.3        0.6
48412    General freight trucking, long-distance                  922      -0.8       1.5       2.4       5.1        3.5
48421    Used household and office goods moving                   106      -1.5      -1.5       0.0       3.2        4.8
491      Postal service                                           770       0.1      -0.4      -0.5       4.4        4.8
4911          Postal service                                      770       0.1      -0.4      -0.5       4.4        4.8
492      Couriers and messengers                                  611       2.8       0.3      -2.4       3.6        3.3
493      Warehousing and storage                                  647      -2.1       7.8      10.1       9.4        1.5
4931         Warehousing and storage                              647      -2.1       7.8      10.1       9.4        1.5
49311            General warehousing and storage                  544      -3.3       6.8      10.4      10.3        3.4
49312            Refrigerated warehousing and storage              48      -9.2       0.3      10.4       6.0        5.7

                            Information

511      Publishing                                               944       4.5       1.8      -2.6       5.8        4.0
5111         Newspaper, book, and directory publishers            697       3.0      -2.3      -5.2       3.1        5.5
5112         Software publishers                                  247       1.9       6.7       4.7       9.9        3.0
51213    Motion picture and video exhibition                      136       3.3      -0.6      -3.7       2.1        2.7
515      Broadcasting, except internet                            338       6.6       7.5       0.9       2.8       -4.4
5151         Radio and television broadcasting                    246       8.6       8.9       0.3       4.5       -4.0
5152         Cable and other subscription programming              92       3.2       5.5       2.3      -2.8       -7.9
5171     Wired telecommunications carriers                        489       5.8       0.0      -5.5       2.8        2.8
5172     Wireless telecommunications carriers                     203      14.1      23.2       7.9      -1.2      -19.8
5175     Cable and other program distribution                     143       0.0       7.0       7.0      15.1        7.5

                       Finance and Insurance

52211    Commercial banking                                      1323       5.3       6.1       0.8       8.5        2.3

                 Real Estate and Rental and Leasing

532111   Passenger car rental                                     132       1.4      -1.9      -3.3       1.7        3.6
53212    Truck, trailer and RV rental and leasing                  62      11.8       4.1      -6.9       5.0        0.9
53223    Video tape and disc rental                               137      22.4       1.2     -17.3      -7.1       -8.2

                Professional and Technical Services

541213   Tax preparation services                                 148      -3.7      -0.1       3.8       8.8        8.9
54131    Architectural services                                   230      -1.4       3.9       5.4      11.3        7.1
54133    Engineering services                                     920       0.7       4.6       3.9       9.7        4.8
54181    Advertising agencies                                     191       1.0       6.8       5.7       6.2       -0.6
541921   Photography studios, portrait                             77       1.9      -2.7      -4.6       6.6        9.6

                 Administrative and Waste Services

56131    Employment placement agencies                            305       6.1       4.7      -1.3      11.8        6.8
56151    Travel agencies                                          123       4.1       4.4       0.3      -1.3       -5.5
56172    Janitorial services                                     1182      -4.8       1.2       6.4       7.6        6.3

                 Health Care and Social Assistance

6215     Medical and diagnostic laboratories                      211       1.6       6.8       5.1       7.3        0.5
621511       Medical laboratories                                 143       1.8       7.0       5.2       6.8       -0.2
621512       Diagnostic imaging centers                            68       1.5       6.5       4.9       8.3        1.8

                Arts, Entertainment, and Recreation

71311    Amusement and theme parks                                134     -11.1      -1.8      10.4       1.7        3.5
71395    Bowling centers                                           79       4.2       2.0      -2.2       4.0        2.0

                  Accommodation and Food Services

7211     Traveler accommodation                                  1798      -2.8       0.9       3.7       3.4        2.5

                           Other Services

8111     Automotive repair and maintenance                       1174       0.8      -0.1      -0.9       2.5        2.6
81211    Hair, nail and skin care services                        924      -5.8      -3.2       2.8       6.5       10.0
81221    Funeral homes and funeral services                       108       7.0      -2.1      -8.5      -1.3        0.9
8123     Drycleaning and laundry services                         368      -0.8       2.4       3.2       5.8        3.3
81292    Photofinishing                                            28       1.8     -10.5     -12.1     -12.4       -2.1




Table 2.  Average annual percent change in output per hour, output, hours, compensation, and unit labor costs, 1987-2006

                                                                   Average annual percent change, 1987-2006
                                                             ----------------------------------------------------
 NAICS                        Industry                         Output                        Labor     Unit labor
  code                                                        per hour   Output    Hours  compensation   costs

                          Mining Industries

21       Mining                                                  0.1      -0.3      -0.4       4.4       4.7
211          Oil and gas extraction                              1.2      -1.0      -2.2       4.8       5.8
2111             Oil and gas extraction                          1.2      -1.0      -2.2       4.8       5.8
212          Mining, except oil and gas                          2.5       1.1      -1.3       1.7       0.5
2121             Coal mining                                     2.9       0.1      -2.7      -0.1      -0.2
2122             Metal ore mining                                2.9       2.0      -0.9       3.6       1.6
2123             Nonmetallic mineral mining and quarrying        1.6       1.6       0.0       3.3       1.7

                    Service-Providing Industries

                              Utilities

2211     Power generation and supply                             3.0       1.3      -1.7       3.1       1.9
2212     Natural gas distribution                                3.0       1.0      -1.9       3.8       2.7

                   Transportation and Warehousing

481      Air transportation                                      3.0       3.4       0.4       3.1      -0.3
482111   Line-haul railroads                                     4.8       2.6      -2.1       1.2      -1.3
48412    General freight trucking, long-distance                 1.4       3.3       1.9       3.8       0.5
48421    Used household and office goods moving                 -1.1       0.5       1.6       4.4       3.9
491      Postal service                                          1.1       1.2       0.1       4.1       2.9
4911          Postal service                                     1.1       1.2       0.1       4.1       2.9
492      Couriers and messengers                                -0.7       2.3       3.1       6.7       4.3
493      Warehousing and storage (1)                             3.4       6.8       3.2       6.0      -0.7
4931         Warehousing and storage (1)                         3.4       6.8       3.2       6.0      -0.7
49311            General warehousing and storage (1)             5.4       8.6       3.1       6.7      -1.7
49312            Refrigerated warehousing and storage (1)       -0.4       3.7       4.0       4.5       0.8

                             Information

511      Publishing                                              4.3       4.8       0.5       5.8       0.9
5111         Newspaper, book, and directory publishers           0.3      -0.4      -0.7       3.6       4.0
5112         Software publishers                                16.2      24.3       6.9      12.6      -9.4
51213    Motion picture and video exhibition                     0.8       1.8       1.0       3.9       2.0
515      Broadcasting, except internet                           1.2       2.7       1.4       5.2       2.4
5151         Radio and television broadcasting                   0.6       0.9       0.3       4.3       3.4
5152         Cable and other subscription programming            2.5       8.1       5.5      10.6       2.3
5171     Wired telecommunications carriers                       5.1       3.3      -1.7       2.4      -0.8
5172     Wireless telecommunications carriers                    9.7      24.1      13.2      16.2      -6.4
5175     Cable and other program distribution                    0.3       5.8       5.5      10.4       4.3

                        Finance and Insurance

52211    Commercial banking                                      2.4       2.2      -0.2       5.9       3.5

                 Real Estate and Rental and Leasing

532111   Passenger car rental                                    1.0       3.4       2.4       6.5       3.0
53212    Truck, trailer and RV rental and leasing                5.3       4.8      -0.6       3.8      -0.9
53223    Video tape and disc rental                              4.5       6.1       1.6       4.5      -1.6

                 Professional and Technical Services

541213   Tax preparation services                                1.0       4.1       3.1       4.5       0.4
54131    Architectural services                                  1.5       4.0       2.4       6.2       2.2
54133    Engineering services                                    1.3       3.5       2.2       6.8       3.1
54181    Advertising agencies                                    1.7       2.0       0.3       5.0       2.9
541921   Photography studios, portrait                          -0.2       2.4       2.6       5.0       2.5

                  Administrative and Waste Services

56131    Employment placement agencies (2)                       2.8       5.5       2.7       9.1       3.5
56151    Travel agencies                                         4.1       3.1      -0.9       4.3       1.2
56172    Janitorial services                                     2.3       4.4       2.0       6.0       1.5

                  Health Care and Social Assistance

6215     Medical and diagnostic laboratories (2)                 3.6       7.1       3.3       6.1      -0.9
621511       Medical laboratories (2)                            2.8       5.9       3.0       5.2      -0.6
621512       Diagnostic imaging centers (2)                      4.8       9.2       4.2       8.1      -1.0

                 Arts, Entertainment, and Recreation

71311    Amusement and theme parks                              -0.7       2.6       3.3       6.5       3.9
71395    Bowling centers                                         0.2      -1.0      -1.3       1.5       2.6

                   Accommodation and Food Services

7211     Traveler accommodation                                  1.4       2.7       1.3       5.6       2.8

                           Other Services

8111     Automotive repair and maintenance                       1.4       2.4       1.0       4.4       2.0
81211    Hair, nail and skin care services                       2.0       3.1       1.1       5.7       2.4
81221    Funeral homes and funeral services                     -0.2       0.2       0.4       4.6       4.4
8123     Drycleaning and laundry services                        1.1       0.6      -0.5       3.2       2.5
81292    Photofinishing                                          0.9      -4.7      -5.6      -1.7       3.1


(1) For NAICS industries 493, 4931, 49311, and 49312, average annual percent changes are for 1992-2006.
(2) For NAICS industries 56131, 6215, 621511, and 621512, average annual percent changes are for 1994-2006.


Last Modified Date: May 21, 2008
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