Economic News Release

Multifactor Productivity Trends News Release

For release 10:00 a.m. (EDT)        Wednesday, March 21, 2012 USDL 12-0494
Technical information: (202) 691-5606•  mfpweb@bls.gov  •  www.bls.gov/mfp
Media contact:         (202) 691-5902•  PressOffice@bls.gov
		
MULTIFACTOR PRODUCTIVITY TRENDS - 2010

Private nonfarm business sector multifactor productivity increased at a 3.5
percent annual rate in 2010, the U.S. Bureau of Labor Statistics reported 
today. This was the largest increase recorded in the series, which began in 
1987. (See chart 1, table A.) The multifactor productivity gain in 2010 
reflected a 4.0 percent increase in output and 0.5 percent increase in the
combined inputs of capital and labor. Capital services grew by 0.4 percent,
and labor input – which is the combined effect of hours worked and labor 
composition – grew 0.5 percent. (See table A, table 1.) The combination of
fast-rising output and a modest increase in capital services caused output
per unit of capital services to rise 3.6 percent, the largest gain since
the series began in 1987.  

Multifactor productivity measures the change in output per unit of combined
capital and labor input. It is designed to measure the joint influences of 
technological change, efficiency improvements, returns to scale, reallocation
of resources, and other factors on economic growth, allowing for the effects 
of capital and labor. Multifactor productivity, therefore, differs from labor
productivity (output per hour worked) measures that are published quarterly 
by BLS. Multifactor productivity includes information on capital services,
hours worked, and shifts in the composition of labor. Estimates of capital 
services and labor composition are not included in the quarterly labor 
productivity measures. Additionally, much of the source data needed to 
construct multifactor productivity measures are not available quarterly.

Private business sector multifactor productivity increased at a 3.4 percent
annual rate in 2010, reversing a decline of 0.8 percent in 2009. The 
multifactor productivity gain in 2010 reflected a 4.0 percent increase in 
output and 0.5 percent increase in the combined inputs of capital and labor.
Capital services grew by 0.5 percent, and labor input grew by 0.6 percent. 
(See table A, table 2.)   

Historical trends in private nonfarm business

Multifactor productivity in private nonfarm business grew 0.9 percent
annually from 1987 to 2010. (See table A.)  For the 2007-2010 period, 
multifactor productivity grew 0.3 percent, due to a 0.9 percent decline in 
output coupled with a 1.2 percent decline in combined inputs. In contrast, 
the 3.5 percent increase in multifactor productivity in 2010 was a result 
of an increase in output much larger than the increase in combined inputs. 
The 4.0 percent rise in output over the year represents the largest increase
since 2004. (See table 1.)

Annual labor productivity growth can be viewed as the sum of three components:
multifactor productivity growth, the contribution of capital intensity, and 
the contribution of shifts in labor composition. Output per hour shifted 
sharply upwards after the 1990-1995 period. In particular, the contribution of 
capital intensity to labor productivity growth became more pronounced after 
1995. (See chart 2, table B.)  

For the 2007-2010 period, the contribution of capital intensity increased at 
a 1.6 percent annual rate and the contribution of labor composition increased 
at a 0.5 percent annual rate, faster than the gains seen in the        
1995-2000 and 2000-2007 periods. Gains made in private nonfarm business output
per hour due to the rising contributions of capital intensity and of labor
composition were tempered by slower multifactor productivity growth. 
(See chart 2, table B.)

For the 2000-2007 period, information processing equipment and software (IPES)
grew 8.1 percent annually in the private nonfarm business sector. 
(See table 5.) For the 2007-2010 period, IPES slowed to 4.4 percent annually. 
For both periods, the rate of increase in information processing equipment 
and software was markedly lower than the double-digit increase observed in 
the 1995-2000 period.  

The revised multifactor productivity measure for the most recent year reflects
the use of a more rigorous methodology than that used in the preliminary 
multifactor productivity release published on May 19, 2011 
http://www.bls.gov/news.release/archives/prod3_05192011.pdf. Revisions to
underlying data affect multifactor productivity growth rates for the 
2007-2010 period. (See table C.) In 2010, multifactor productivity growth
in the private nonfarm business sector was 3.5 percent, larger than the 3.2 
percent increase reported May 19, 2011, mainly due to a 0.3 percent upward
revision to output. For 2009, multifactor productivity growth in the private 
nonfarm business sector was revised downward to a 1.0 percent decline, a 1.1 
percent downward revision. This was largely due to a revision to output from
a 3.7 percent decline to a fall of 5.0 percent.

Table A.  Compound annual growth rates for productivity, output, and inputs
in the private nonfarm business and private business sectors for selected
periods,1987-2010

In percent

                            1987-  1987-  1990-  1995-  2000-  2007-  2009-
                            2010   1990   1995   2000   2007   2010   2010

Private nonfarm business1

Productivity
  Multifactor Productivity2  0.9    0.5    0.5    1.3    1.4    0.3    3.5
    Output per hour of all
      persons                2.2    1.4    1.6    2.7    2.6    2.4    4.1
    Output per unit of
      capital services      -0.8   -0.4   -0.4   -1.0   -0.5   -2.2    3.6


Output                       2.8    3.2    2.9    5.0    2.7   -0.9    4.0


Inputs

  Combined inputs3           1.9    2.7    2.4    3.6    1.3   -1.2    0.5
   Labor input4              1.1    2.3    2.0    2.5    0.4   -2.5    0.5
     Hours                   0.6    1.7    1.3    2.2    0.1   -3.2   -0.1
     Labor Composition5      0.5    0.6    0.7    0.3    0.3    0.7    0.7
   Capital services          3.6    3.6    3.3    6.0    3.2    1.3    0.4

Analytic ratio
  Capital services per
    hour of all persons      3.1    1.9    1.9    3.8    3.1    4.7    0.6


Private business1

Productivity
  Multifactor Productivity2  1.0    0.6    0.4    1.5    1.4    0.5    3.4
    Output per hour of all
      persons                2.3    1.6    1.5    2.9    2.7    2.5    4.1
    Output per unit of
      capital services      -0.7   -0.4   -0.3   -0.8   -0.5   -1.9    3.5


Output                       2.8    3.2    2.8    5.0    2.7   -0.8    4.0


Inputs

  Combined inputs3           1.8    2.6    2.4    3.4    1.2   -1.2    0.5
   Labor input4              1.0    2.1    2.0    2.4    0.3   -2.5    0.6
     Hours                   0.5    1.6    1.3    2.0    0.0   -3.2   -0.1
     Labor Composition5      0.5    0.6    0.7    0.3    0.3    0.7    0.7
   Capital services          3.5    3.6    3.1    5.8    3.2    1.2    0.5

Analytic ratio
  Capital services per
    hour of all persons      3.0    2.0    1.8    3.7    3.1    4.5    0.6


1.  Excludes government enterprises.
2.  Output per unit of combined labor input and capital services.
3.  The growth rate of each input is weighted by its share of current dollar
    costs.
4.  Hours at work by age, education, and gender group are weighted by each
    group’s share of the total wage bill.
5.  Ratio of labor input to hours.

Table B.  Compound annual growth rates in output per hour of all persons 
and the contributions of capital intensity, labor composition, and 
multifactor productivity in the private nonfarm business and private 
business sectors for selected periods, 1987-2010

In percent

                            1987-  1987-  1990-  1995-  2000-  2007-  2009-
                            2010   1990   1995   2000   2007   2010   2010

Private nonfarm business1

Output per hour
of all persons               2.2    1.4    1.6    2.7    2.6    2.4    4.1

Contribution of
capital intensity2           1.0    0.6    0.6    1.2    1.0    1.6    0.2

  Contribution of
  information processing
  equipment and software3    0.6    0.5    0.5    0.9    0.5    0.6    0.3

  Contribution of all
  other capital services     0.4    0.1    0.2    0.2    0.4    1.0   -0.1

Contribution of
labor composition4           0.3    0.4    0.5    0.2    0.2    0.5    0.4

Multifactor productivity5    0.9    0.5    0.5    1.3    1.4    0.3    3.5

  Contribution of R&D to
  multifactor productivity   0.2    0.2    0.2    0.2    0.2    0.2    0.2


Private business1

Output per hour
of all persons               2.3    1.6    1.5    2.9    2.7    2.5    4.1

Contribution of
capital intensity2           1.0    0.6    0.6    1.2    1.0    1.5    0.2

  Contribution of
  information processing
  equipment and software3    0.6    0.5    0.4    0.9    0.5    0.6    0.3

  Contribution of all
  other capital services     0.4    0.2    0.1    0.3    0.4    1.0    0.0

Contribution of
labor composition4           0.3    0.4    0.5    0.2    0.2    0.5    0.4

Multifactor productivity5    1.0    0.6    0.4    1.5    1.4    0.5    3.4

1. Excludes government enterprises.
2. Capital services per hour multiplied by capital's share of current
   dollar costs.
3. Information processing equipment and software per hour multiplied by
   its share of current dollar costs.
4. Labor composition multiplied by labor's share of current dollar costs.
5. Output per unit of combined labor input and capital services.

Note: Multifactor productivity plus contribution of capital intensity and
labor composition may not sum to output per hour due to independent
rounding.  Contribution of information processing equipment and all other
capital services may not sum to the contribution of capital intensity due
to independent rounding.

Table C. Annual growth rates of the previous and revised multifactor
productivity measures in the private nonfarm business and private
business sectors for the 1987-2010 period

Annual percent change from previous year

          Private Nonfarm Business      Private Business
Year      Previous      Revised         Previous      Revised


1988         1.0          1.0              0.8          0.8
1989         0.0          0.0              0.3          0.3
1990         0.4          0.4              0.6          0.6
1991        -1.0         -1.0             -1.0         -1.0
1992         2.3          2.3              2.6          2.6
1993         0.3          0.3              0.2          0.2
1994         0.7          0.7              0.7          0.7
1995         0.0          0.0             -0.3         -0.3
1996         1.4          1.4              1.7          1.7
1997         0.6          0.6              0.8          0.8
1998         1.5          1.5              1.5          1.5
1999         1.7          1.6              1.9          1.8
2000         1.6          1.6              1.7          1.7
2001         0.7          0.7              0.8          0.8
2002         2.4          2.4              2.3          2.4
2003         2.4          2.5              2.6          2.7
2004         2.5          2.4              2.6          2.4
2005         1.1          1.1              1.1          1.0
2006         0.4          0.4              0.5          0.5
2007         0.4          0.3              0.3          0.3
2008        -1.0         -1.4             -0.9         -1.2
2009         0.1         -1.0              0.2         -0.8
2010         3.2          3.5              3.2          3.4


Technical Notes

Capital Services:  Capital services are the services derived from the stock 
of physical assets and software. There are 86 asset types for fixed business
equipment and software, structures, inventories, and land. Data on investments
in physical assets are obtained from BEA. Data on inventories are estimated 
using BEA and additional information from IRS Corporation Income Returns. 
Data for land in the farm sector are obtained from USDA. Nonfarm industry 
detail for land is based on IRS book value data. Current-dollar value-added
data, obtained from BEA, are used in estimating capital rental prices. 
Among equipment, BLS provides additional detail in tables 5 and 6 on 
information processing equipment and software (IPES). IPES is composed of 
four broad classes of assets: computers and related equipment, software, 
communications equipment, and other IPES equipment. Computers and related 
equipment includes mainframe computers, personal computers, printers, 
terminals, tape drives, storage devices, and integrated systems. Software 
is comprised of pre-packaged, custom, and own-account software. Communications
equipment is not further differentiated. Other IPES includes medical equipment
and related instruments, electromedical instruments, nonmedical instruments, 
photocopying and related equipment, and office and accounting machinery. 
Structures include nonresidential structures and residential capital that are
rented out by profit-making firms or persons.
Financial assets are excluded from capital services measures, as are 
owner-occupied residential structures. The aggregate capital services measures 
are obtained by Tornqvist aggregation of the capital stocks for each asset type
within each of 60 NAICS industry groupings using estimated rental prices for 
each asset type. Each rental price reflects the nominal rate of return to all 
assets within the industry and rates of economic depreciation and revaluation
for the specific asset; rental prices are adjusted for the effects of taxes. 
Current-dollar capital costs can be defined as each asset’s rental price 
multiplied by its constant-dollar stock, adjusting for capital composition 
effects. 

Labor Input:  Labor input in private business and private nonfarm business is 
obtained by chained superlative (Tornqvist) aggregation of the hours at work 
by all persons, classified by age, education, and gender with weights 
determined by each group’s share of the total wage bill. Hours paid of
employees are largely obtained from the Current Employment Statistics program
(CES). These hours paid are then converted to an at-work basis by using 
information from the Employment Cost Index (ECI) of the National Compensation
Survey (NCS) benchmarked to the Hours at Work Survey. Hours at work for 
nonproduction and supervisory workers are derived using data from the Current 
Population Survey (CPS), the CES, and the NCS. The hours at work of 
proprietors, unpaid family workers, and farm employees are derived from the 
Current Population Survey. Hours at work data reflect Productivity and Costs
data as of the February 2, 2012 “Productivity and Costs” news release 
(USDL-12-0162). The growth rate of labor composition is defined as the 
difference between the growth rate of weighted labor input and the growth rate
of the hours of all persons. Additional information concerning data sources 
and methods of measuring labor composition can be found in Cindy Zoghi, 2007, 
“Measuring Labor Composition: A Comparison of Alternate Methodologies” 
http://www.bls.gov/bls/fesacp1121407.pdf.

Combined Inputs:  Labor input and capital services are combined using chained
superlative Tornqvist aggregation, applying weights that represent each 
component's share of total costs. The chained superlative Tornqvist index uses
changing weights; the share in each year is averaged with the preceding year's 
share. Total costs are defined as the value of output less a portion of taxes 
on production and imports. Most of the taxes on production and imports, such 
as excise taxes, are excluded from costs; however, property and motor vehicle
taxes remain in total costs.

Capital Intensity:  Capital intensity is the ratio of capital to hours worked 
in the production process. The higher the capital to hours ratio, the more 
capital intensive the production process is. 
In a production process, profit maximizing/cost-minimizing firms adjust the 
factor proportions of capital and labor if the price of one factor is less
than the other factor; there would be a tendency for the firms to substitute 
the less expensive factor for the more expensive one. In the short run, changes
in hours worked are more variable than changes in capital services. Changes
in hours worked in business cycles can result in volatility of the capital
intensity ratio over short periods of time. In the long run an increase in 
wages relative to the price of capital will induce the firm to substitute 
capital for labor, resulting in an increase in capital intensity.  
Rising labor costs are, in fact, an incentive for firms to introduce automated 
production processes. Industry estimates of capital to hours ratios can be 
obtained at http://www.bls.gov/mfp/mprdload.htm.

Output:  Private business sector output is a chain-type, current-weighted 
index constructed after excluding from gross domestic product (GDP) the 
following outputs: general government, nonprofit institutions, private 
households (including owner-occupied housing), and government enterprises. 
This release presents data for the private business and private nonfarm 
business sectors. The private business sector, which accounted for 
approximately 76 percent of gross domestic product in 2005, includes all of 
gross domestic product except the output of general government, government 
enterprises, non-profit institutions, the rental value of owner-occupied real
estate, and the output of paid employees of private households. The private 
nonfarm business sector excludes farms but includes agricultural services. 
All multifactor productivity measures exclude government enterprises, however
government enterprises are included in the business and nonfarm business 
sectors covered by the BLS quarterly productivity measures. The output 
measures are based on the revised National Income and Product Accounts 
(NIPA) data released by BEA on January 27, 2012. 

Multifactor Productivity:  Multifactor productivity measures describe the 
relationship between output in real terms and the inputs involved in its 
production. They do not measure the specific contributions of labor or capital,
or any other factor of production. Rather, multifactor productivity is 
designed to measure the joint influences of technological change, efficiency 
improvements, returns to scale, reallocation of resources, and other factors
on economic growth, allowing for the effects of capital and labor.
The multifactor productivity indexes for private business and private nonfarm 
business are derived by dividing an output index by an index of capital 
services and labor input. The output indexes are computed as chained 
superlative indexes (Fisher Ideal indexes) of components of real output.

Research and development:  The stock of research and development in private 
nonfarm business is derived by cumulating constant dollar measures of research
and development expenditures and allowing for depreciation. Current dollar 
expenditures for privately financed research and development are obtained from
annual issues of Research and Development in Industry published by the 
National Science Foundation. BLS develops price deflators and estimates of the
rate of depreciation. Further description of these data and methods can be 
found in BLS Bulletin 2331 (September 1989), "The Impact of Research and 
Development on Productivity Growth." BLS measures of year-to-year contributions
of research and development to the private nonfarm business sector and 
measures of the stock of research and development are available at 
http://www.bls.gov/mfp/rdtable.pdf.

Other information:  Comprehensive tables containing additional data beyond the
scope of this press release are available upon request at 202-691-5606 or at 
http://www.bls.gov/mfp/mprdload.htm. More detailed information on methods, 
limitations, and data sources of capital and labor are provided in BLS Bulletin
2178 (September 1983), “Trends in Multifactor Productivity, 1948-81” and on 
the BLS Multifactor Productivity website under the title “Technical Information
About the BLS Multifactor Productivity Measures” for Major Sectors and 18 NAICS
3-digit Manufacturing Industries at http://www.bls.gov/mfp/mprtech.pdf. General
information is available on the BLS Multifactor Productivity website at 
http://www.bls.gov/mfp/mprover.htm. Additional data not contained in the 
release can be obtained in print or at http://www.bls.gov/mfp. A number of
comprehensive tables set up as zip files can be obtained at 
http://www.bls.gov/mfp/mprdload.htm. Included in the additional data available
in the home page is a zip file containing selected multifactor productivity 
data that links 1948-87 SIC data to NAICS data from 1987 forward. This file 
includes data for the private business and private nonfarm business sectors. 


Table 1. Private nonfarm business sector: productivity and related measures
for the 1987-2010 period1

Annual percent change from previous year

                                                       Combined           
               Output                                  units of           
       Output  per                                     labor in-              
       per     unit of Multi-                          put and   Capital      
       hour    capital factor                  Capital capital   services     
       of all  servic- Product-        Labor   Servic- servic-   per hour of  
Year   persons es      ivity2  Output3 Input4  es5     es6       all persons  

1988    1.7     0.9     1.0     4.6     3.5     3.6     3.5       0.7
1989    0.8    -0.4     0.0     3.5     3.3     4.0     3.5       1.2

1990    1.9    -1.7     0.4     1.4     0.1     3.2     1.1       3.7
1991    1.7    -3.6    -1.0    -0.9    -1.1     2.9     0.1       5.5
1992    4.0     1.5     2.3     3.8     1.0     2.3     1.4       2.5
1993    0.6     0.4     0.3     3.6     3.3     3.2     3.3       0.3
1994    1.1     1.1     0.7     4.7     4.1     3.6     3.9       0.0

1995    0.5    -1.1     0.0     3.3     2.7     4.4     3.2       1.6
1996    2.6    -0.3     1.4     4.4     2.2     4.8     3.0       2.9
1997    1.5    -0.4     0.6     5.1     4.0     5.5     4.5       1.9
1998    2.9    -1.2     1.5     5.2     2.4     6.4     3.6       4.2
1999    3.3    -1.2     1.6     5.6     2.6     6.9     3.9       4.5

2000    3.4    -2.0     1.6     4.5     1.2     6.5     2.8       5.5
2001    3.1    -3.6     0.7     1.0    -1.6     4.7     0.3       7.0
2002    4.7    -1.3     2.4     1.9    -2.0     3.3    -0.4       6.1
2003    3.8     0.5     2.5     3.1    -0.4     2.7     0.6       3.3
2004    2.6     1.5     2.4     4.0     1.2     2.5     1.6       1.1

2005    1.6     0.4     1.1     3.4     2.0     3.0     2.3       1.2
2006    0.9    -0.1     0.4     3.2     2.5     3.3     2.8       1.0
2007    1.6    -0.8     0.3     2.2     1.2     3.0     1.8       2.5
2008    0.7    -4.0    -1.4    -1.5    -1.5     2.7    -0.1       4.9
2009    2.5    -5.8    -1.0    -5.0    -6.5     0.8    -4.0       8.7

2010    4.1     3.6     3.5     4.0     0.5     0.4     0.5       0.6

See footnotes following table 4.
Source: Bureau of Labor Statistics



Table 2. Private business sector: productivity and related measures
for the 1987-2010 period1

Annual percent change from previous year

                                                       Combined           
               Output                                  units of           
       Output  per                                     labor in-              
       per     unit of Multi-                          put and   Capital      
       hour    capital factor                  Capital capital   services     
       of all  servic- Product-        Labor   Servic- servic-   per hour of  
Year   persons es      ivity2  Output3 Input4  es5     es6       all persons  

1988    1.5     0.5     0.8     4.3     3.4     3.8     3.5       1.0
1989    1.0    -0.2     0.3     3.7     3.2     3.9     3.4       1.2

1990    2.2    -1.5     0.6     1.5    -0.1     3.0     0.9       3.7
1991    1.6    -3.4    -1.0    -0.8    -1.0     2.7     0.2       5.2
1992    4.2     1.8     2.6     4.0     1.0     2.1     1.4       2.3
1993    0.6     0.2     0.2     3.3     3.1     3.1     3.1       0.4
1994    0.9     1.4     0.7     5.0     4.5     3.5     4.2      -0.4

1995    0.1    -1.3    -0.3     2.9     2.7     4.3     3.2       1.5
1996    2.9     0.0     1.7     4.6     2.0     4.6     2.8       2.9
1997    1.8    -0.1     0.8     5.2     3.9     5.3     4.4       1.8
1998    3.0    -1.1     1.5     5.0     2.3     6.2     3.5       4.1
1999    3.5    -1.0     1.8     5.6     2.4     6.7     3.7       4.5

2000    3.5    -1.7     1.7     4.6     1.2     6.3     2.8       5.3
2001    3.2    -3.5     0.8     0.9    -1.8     4.6     0.1       7.0
2002    4.6    -1.2     2.4     2.0    -1.9     3.2    -0.4       5.9
2003    3.9     0.6     2.7     3.2    -0.4     2.6     0.5       3.3
2004    2.8     1.4     2.4     4.1     1.1     2.6     1.6       1.3

2005    1.7     0.2     1.0     3.5     2.0     3.2     2.4       1.5
2006    1.0     0.0     0.5     3.1     2.4     3.1     2.6       1.0
2007    1.6    -0.7     0.3     2.1     1.2     2.8     1.7       2.3
2008    0.7    -3.7    -1.2    -1.3    -1.4     2.4    -0.1       4.6
2009    2.6    -5.4    -0.8    -4.8    -6.5     0.6    -4.1       8.4

2010    4.1     3.5     3.4     4.0     0.6     0.5     0.5       0.6

See footnotes following table 4.
Source: Bureau of Labor Statistics



Table 3. Private nonfarm business sector: indexes of productivity and related
measures, 1987-2010(1)

Indexes 2005=100

                                                       Combined           
               Output                                  units of           
       Output  per                                     labor in-              
       per     unit of Multi-                          put and   Capital      
       hour    capital factor                  Capital capital   services     
       of all  servic- Product-        Labor   Servic- servic-   per hour of  
Year   persons es      ivity2  Output3 Input4  es5     es6       all persons  

1987    66.3    111.4   82.3    54.2    75.5    48.7    65.9      59.5
1988    67.4    112.4   83.2    56.7    78.2    50.5    68.2      59.9
1989    67.9    112.0   83.2    58.7    80.8    52.5    70.6      60.6

1990    69.2    110.0   83.5    59.6    80.8    54.2    71.4      62.9
1991    70.3    106.0   82.7    59.1    79.9    55.7    71.4      66.3
1992    73.1    107.6   84.6    61.3    80.7    57.0    72.5      67.9
1993    73.6    108.0   84.9    63.5    83.4    58.8    74.9      68.1
1994    74.4    109.2   85.5    66.5    86.9    60.9    77.8      68.1

1995    74.7    107.9   85.5    68.7    89.2    63.6    80.3      69.2
1996    76.7    107.6   86.7    71.7    91.1    66.7    82.8      71.3
1997    77.8    107.2   87.2    75.4    94.8    70.4    86.5      72.6
1998    80.1    105.9   88.5    79.3    97.1    74.9    89.6      75.6
1999    82.7    104.7   89.9    83.8    99.6    80.0    93.1      79.0

2000    85.6    102.6   91.4    87.5   100.8    85.3    95.8      83.4
2001    88.3     99.0   92.1    88.4    99.2    89.3    96.0      89.2
2002    92.4     97.7   94.2    90.1    97.2    92.3    95.6      94.6
2003    95.8     98.1   96.6    92.9    96.9    94.7    96.2      97.7
2004    98.4     99.6   98.9    96.7    98.1    97.1    97.7      98.8

2005   100.0    100.0  100.0   100.0   100.0   100.0   100.0     100.0
2006   100.9     99.9  100.4   103.2   102.5   103.3   102.8     101.0
2007   102.6     99.1  100.7   105.4   103.8   106.4   104.7     103.6
2008   103.3     95.0   99.3   103.9   102.2   109.3   104.6     108.7
2009   105.8     89.6   98.3    98.7    95.6   110.1   100.4     118.1

2010   110.2     92.8  101.7   102.6    96.1   110.6   100.9     118.8

See footnotes following table 4.
Source: Bureau of Labor Statistics



Table 4. Private business sector: indexes of productivity and related
measures, 1987-2010(1)

Indexes 2005=100

                                                       Combined           
               Output                                  units of           
       Output  per                                     labor in-              
       per     unit of Multi-                          put and   Capital      
       hour    capital factor                  Capital capital   services     
       of all  servic- Product-        Labor   Servic- servic-   per hour of  
Year   persons es      ivity2  Output3 Input4  es5     es6       all persons  

1987    65.4    109.3   81.4    54.2    76.4    49.6    66.6      59.9
1988    66.4    109.9   82.1    56.5    78.9    51.4    68.9      60.5
1989    67.1    109.7   82.3    58.6    81.5    53.5    71.3      61.2

1990    68.6    108.1   82.8    59.5    81.4    55.1    71.9      63.5
1991    69.7    104.4   82.0    59.1    80.5    56.6    72.0      66.8
1992    72.6    106.3   84.1    61.4    81.4    57.8    73.0      68.3
1993    73.1    106.5   84.3    63.4    83.9    59.6    75.3      68.6
1994    73.8    108.0   84.9    66.6    87.7    61.7    78.4      68.3

1995    73.8    106.5   84.6    68.5    90.0    64.3    80.9      69.3
1996    76.0    106.6   86.1    71.7    91.8    67.2    83.2      71.3
1997    77.3    106.5   86.8    75.4    95.4    70.8    86.9      72.6
1998    79.6    105.3   88.0    79.2    97.6    75.2    89.9      75.6
1999    82.4    104.3   89.7    83.6    99.9    80.2    93.3      79.0

2000    85.3    102.6   91.2    87.4   101.1    85.3    95.9      83.2
2001    88.0     98.9   91.9    88.3    99.3    89.2    96.0      89.0
2002    92.1     97.8   94.1    90.0    97.4    92.1    95.6      94.2
2003    95.7     98.4   96.7    92.9    97.0    94.4    96.1      97.3
2004    98.4     99.8   99.0    96.7    98.1    96.9    97.7      98.6

2005   100.0    100.0  100.0   100.0   100.0   100.0   100.0     100.0
2006   101.0    100.0  100.5   103.1   102.4   103.1   102.6     101.0
2007   102.6     99.3  100.8   105.2   103.6   106.0   104.4     103.2
2008   103.3     95.7   99.6   103.8   102.1   108.5   104.3     108.0
2009   106.0     90.5   98.8    98.9    95.5   109.2   100.1     117.1

2010   110.3     93.7  102.2   102.8    96.0   109.7   100.6     117.8

See footnotes following table 4.
Source: Bureau of Labor Statistics



Footnotes, Tables 1-4

Source:  The Bureau of Labor Statistics (BLS) develops productivity measures
using output and compensation data published by the Bureau of Economic 
Analysis (BEA), hours data published by other BLS programs, and capital data
supplied by BEA and U.S. Department of Agriculture. Also see Technical Notes 
in this release.

(1) The private business sector covers gross domestic product with the 
    exception of the output of general government, government enterprises, 
    non-profit institutions, the rental value of owner-occupied real estate, 
    and the output of paid employees of private households. The private 
    nonfarm business sector further excludes farms but includes agricultural
    services.

(2) Output per unit of combined labor and capital services.

(3) Gross domestic product originating in the sector, chained superlative 
    index.

(4) Index of hours at work of all persons including employees, proprietors,
    and unpaid family workers, classified by age, education, and gender. 
    This chained superlative index is computed by combining changes in the 
    hours of each age, education, and gender group weighted by each group’s
    share of the total wage bill. 

(5) A measure of the flow of capital services used in the sector. Capital 
    services measure the services derived from the stock of physical assets
    and software. The assets included are fixed business equipment, 
    structures, inventories, and land.

(6) The growth rates of labor input and capital services are combined by 
    weighting with their respective shares of current dollar costs, and 
    aggregating into a chained superlative index.

Table 5. Compound average annual growth rates in real capital services
by asset type, private nonfarm business sector, 1987-2010

In percent


                        1987-   1987-   1990-   1995-   2000-   2007-   2009-
                        2010    1990    1995    2000    2007    2010    2010

All Assets               3.6     3.6     3.3     6.0     3.2     1.3     0.4

  Equipment              5.6     4.9     5.1    10.0     5.0     1.7     0.5

    All Information     10.4    11.0     9.6    17.8     8.1     4.4     3.3
    Processing
    Equipment & Software
    (IPES)

      Computers &       20.0    19.2    16.1    40.7    13.8    10.5     9.6
      related equipment

      Software          11.6    17.8    13.4    16.8     8.0     3.4     2.1

      Communication      7.0     6.0     5.3    10.7     7.1     4.4     3.6
      equipment

      Other IPES         3.2     2.8     4.0     3.5     3.0     2.0     1.3

    All other equipment  2.0     2.2     1.9     3.2     1.9     0.5    -0.3

  Structures             2.0     3.0     2.0     2.3     1.5     1.5     0.9

  Residential rental     1.2     1.9     1.0     1.6     1.4     0.0    -0.4
  capital

  Inventories            2.2     3.4     2.2     4.2     1.8    -1.7    -2.0

  Land                   1.5     1.9     1.3     1.7     1.4     1.4     0.7

Source: Bureau of Labor Statistics

Note: For a brief discussion of methods used in preparing these data,
see Technical Notes in this release.



Table 6. Compound average annual growth rates in real capital services
by asset type, private business sector, 1987-2010

In percent


                        1987-   1987-   1990-   1995-   2000-   2007-   2009-
                        2010    1990    1995    2000    2007    2010    2010

All Assets               3.5     3.6     3.1     5.8     3.2     1.2     0.5

  Equipment              5.5     4.6     4.9     9.9     5.0     1.7     0.5

    All Information     10.4    11.0     9.6    17.8     8.1     4.4     3.3
    Processing
    Equipment & Software
    (IPES)

      Computers &       20.0    19.2    16.1    40.7    13.8    10.5     9.6
      related equipment

      Software          11.6    17.8    13.4    16.8     8.0     3.4     2.1

      Communication      7.0     6.0     5.3    10.7     7.1     4.4     3.6
      equipment

      Other IPES         3.2     2.9     4.0     3.6     3.1     2.0     1.3

    All other equipment  1.9     2.2     1.8     3.0     1.8     0.3    -0.3

  Structures             1.9     2.9     1.9     2.2     1.5     1.5     0.9

  Residential rental     1.2     1.9     1.0     1.6     1.4     0.0    -0.4
  capital

  Inventories            2.1     2.9     2.2     4.1     1.7    -1.6    -1.9

  Land                   1.4     3.1     1.3     1.3     1.3     0.2     0.8

Source: Bureau of Labor Statistics

Note: For a brief discussion of methods used in preparing these data,
see Technical Notes in this release.



Last Modified Date: March 21, 2012
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