Economic News Release

Multifactor Productivity Trends News Release

For release 10:00 am (EDT) Friday, June 28, 2013	USDL-13-1245
Technical information:	(202) 691-5606  •  mfpweb@bls.gov  •  www.bls.gov/mfp
Media contact:	        (202) 691-5902  •  PressOffice@bls.gov
 
(Note: Multifactor productivity data for the private business and private 
nonfarm business sectors are incorrect for 2012. Measures for capital 
services were incorrectly calculated, affecting measures of multifactor 
productivity, output per unit of capital services, combined inputs, capital 
services per hour, and the contribution of capital intensity. Only data for 
2012 are affected--measures for all other years are correct. A corrected news
release will be published as soon as possible.)


PRELIMINARY MULTIFACTOR PRODUCTIVITY TRENDS - 2012

Private nonfarm business sector multifactor productivity increased at a 1.4 
percent annual rate in 2012, the U.S. Bureau of Labor Statistics reported 
today. (See chart 1, table A.) The multifactor productivity gain in 2012
reflected a 2.9 percent increase in output and a 1.5 percent increase in 
the combined inputs of capital and labor. Capital services grew by 0.5 
percent and labor input – which is the combined effect of hours worked and
labor composition – grew by 2.1 percent. Capital services per hour of all 
persons decreased at a rate of 1.3 percent in 2012 after falling 1.2 percent
in 2011. The decreases in 2011 and 2012 are the only two years of decline 
in the measure which began in 1987. (See table 1.)

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 also grew by 1.4 percent 
in 2012. A 2.8 percent increase in output and a 1.4 percent increase in 
the combined inputs of capital and labor contributed to the multifactor 
productivity gain in 2012. (See table 2.)
 

 
Historical trends in the private nonfarm business sector

Multifactor productivity in the private nonfarm business sector grew 0.9 
percent annually from 1987 to 2012. (See table A.) For the 2007-2012 period,
multifactor productivity grew 0.6 percent as combined inputs decreased 0.1 
percent and output increased 0.5 percent. The small decline in combined inputs
reflected a decrease in labor input of 0.7 percent combined with a 1.0 percent
increase in capital services. In 2012, the 1.5 percent increase in combined
inputs was a result of 2.1 percent growth in labor input combined with a 0.5 
percent increase in capital services. This was the third straight year where
labor input grew faster than capital services. (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 reflecting increases in 
contribution of capital intensity and multifactor productivity.

For the 2007-2012 period, the contribution of capital intensity and the
contribution of labor composition amounted to 0.7 percent and 0.3 percent, 
respectively. Additionally, the growth in multifactor productivity of 0.6
percent contributed to an overall growth of output per hour of 1.7 percent.
This composition of labor productivity growth more closely resembles the 
1990-1995 period, prior to the upward shift in multifactor productivity 
and capital intensity. (See chart 2, table B.) 

In 2012, the contribution of capital intensity in the private nonfarm 
business sector declined 0.5 percent. Combined with a modest 0.1 percent
increase in the contribution of labor composition and a 1.4 percent 
increase in multifactor productivity, output per hour of all persons 
increased at a 1.0 percent annual rate. Labor productivity growth was
much smaller than the average increase of 2.1 percent over the duration 
of the series, from 1987 to 2012. (See table B.)

The methodology for measuring preliminary multifactor productivity for 
2012 is a simplified version of the methodology that BLS uses when more 
detailed data are available. Measures will be revised in early 2014. 

Table A. Compound annual growth rates for productivity, output, and inputs
in the private nonfarm business and private business sectors for selected
periods,1987-2012

In percent


                            1987-  1987-  1990-  1995-  2000-  2007-  2011-
                            2012   1990   1995   2000   2007   2012   2012

Private nonfarm business1

Productivity

  Multifactor Productivity2  0.9    0.5    0.5    1.3    1.4    0.6    1.4
    Output per hour of all
      persons                2.1    1.4    1.6    2.7    2.6    1.7    1.0
    Output per unit of
      capital services      -0.6   -0.4   -0.4   -1.0   -0.5   -0.5    2.4


Output                       2.8    3.2    2.9    5.0    2.7    0.5    2.9


Inputs

  Combined inputs3           1.8    2.7    2.4    3.6    1.3   -0.1    1.5
   Labor input4              1.1    2.3    2.0    2.5    0.4   -0.7    2.1
     Hours                   0.7    1.7    1.3    2.2    0.1   -1.2    1.9
     Labor Composition5      0.5    0.6    0.7    0.3    0.3    0.5    0.1
   Capital services          3.4    3.6    3.3    6.0    3.2    1.0    0.5

Analytic ratio
  Capital services per
    hour of all persons      2.7    1.8    1.9    3.8    3.1    2.2   -1.3


Private business1

Productivity

  Multifactor Productivity2  1.0    0.6    0.4    1.5    1.4    0.6    1.4
    Output per hour of all
      persons                2.1    1.6    1.5    2.9    2.7    1.7    0.9
    Output per unit of
      capital services      -0.5   -0.3   -0.3   -0.8   -0.5   -0.4    2.4


Output                       2.8    3.2    2.8    5.0    2.7    0.5    2.8


Inputs

  Combined inputs3           1.8    2.6    2.4    3.4    1.2   -0.1    1.4
   Labor input4              1.1    2.1    2.0    2.4    0.3   -0.7    2.0
     Hours                   0.6    1.6    1.3    2.0    0.0   -1.1    1.9
     Labor Composition5      0.5    0.6    0.7    0.3    0.3    0.5    0.1
   Capital services          3.3    3.5    3.1    5.8    3.1    0.9    0.4

Analytic ratio
  Capital services per
    hour of all persons      2.6    1.9    1.8    3.7    3.1    2.1   -1.5


1.  Excludes government enterprises.
2.  Output per combined units of 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, 1987-2012

In percent



                            1987-  1987-  1990-  1995-  2000-  2007-  2011-
                            2012   1990   1995   2000   2007   2012   2012

Private nonfarm business1

Output per hour
of all persons               2.1    1.4    1.6    2.7    2.6    1.7    1.0

Contribution of
capital intensity2           0.8    0.6    0.6    1.2    1.0    0.7   -0.5

Contribution of
labor composition3           0.3    0.4    0.5    0.2    0.2    0.3    0.1

Multifactor productivity4    0.9    0.5    0.5    1.3    1.4    0.6    1.4

  Contribution of R&D to
  multifactor productivity


Private business1

Output per hour
of all persons               2.1    1.6    1.5    2.9    2.7    1.7    0.9

Contribution of
capital intensity2           0.8    0.6    0.6    1.2    1.0    0.7   -0.5

Contribution of
labor composition3           0.3    0.4    0.5    0.2    0.2    0.3    0.1

Multifactor productivity4    1.0    0.6    0.4    1.5    1.4    0.6    1.4

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

Multifactor productivity plus contribution of capital intensity and
labor composition may not sum to output per hour due to independent
rounding.

Technical Notes

The simplified methodology for preparing preliminary estimates of MFP is
outlined in the June 2005 Monthly Labor Review article, “Preliminary 
estimates of multifactor productivity growth” located at 
http://www.bls.gov/opub/mlr/2005/06/art3full.pdf. This methodology is 
applied to both the private nonfarm business and private business sectors
and measures are calculated only for the most recent year. Data for all 
previous years are identical to the April 9, 2013 “Multifactor Productivity
Trends” news release (USDL-13-0626).

Capital Services  

Capital services are the services derived from the stock of physical assets
and software. Capital services measures constructed for the preliminary MFP
measures are based on less detail only for the most recent year. The 
preliminary measures consist of eight asset types as opposed to the 86 
asset types for fixed business equipment and software, structures, 
inventories, and land included in estimates for all previous years. The 
assets included in the preliminary estimates are computers, software, 
communications and other information processing equipment, other fixed
business equipment, structures, inventories, rental residences, and land. 
Investments, depreciation, and capital income are estimated for each of 
these eight aggregates. Capital services are calculated by a chained 
superlative Tornqvist index combining stocks of the eight asset 
categories, weighted by capital income shares.

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. The preliminary estimates 
of 2012 hours worked for the private nonfarm business and private business
sectors are extrapolated from the hours worked reported in the nonfarm 
business and business sectors, respectively, in the February 7, 2013 
“Productivity and Costs” news release (USDL-13-0192). 

The labor composition index estimates the effect of shifts in the age,
education, and gender composition of the work force on the efficiency 
of hours worked. The preliminary MFP labor composition measure estimates
the number of hours worked by each type of worker based on Current 
Population Survey (CPS) data. The estimate of the 2012 labor composition
index assumes relative wages across groups remain constant between 2011
and 2012. 

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 and in “Changes in the 
Composition of Labor for BLS Multifactor Productivity Measures” 
http://www.bls.gov/mfp/mprlabor.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 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 services 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. 

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 
accounted for approximately 74 percent of gross domestic product in
2011. Additionally, the private nonfarm business sector excludes
farms from the private business sector, but includes agricultural 
services. Multifactor measures exclude government enterprises, while 
the BLS quarterly Productivity and Cost series include them. The 
output measures are based on the National Income and Product Accounts
(NIPA) data released by the Bureau of Economic Analysis (BEA) on 
January 30, 2013 but do not reflect the revised data released by BEA
on February 28, 2013. The preliminary estimates of 2012 output for
the private nonfarm business and private business sectors are
extrapolated from the output reported in the nonfarm business and
business sectors, respectively, in the February 7, 2013 “Productivity 
and Costs” news release (USDL-13-0192). 
 
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.

Table 1. Private nonfarm business sector: productivity and related measures
for the 1987-2012 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     3.9     3.5       1.1

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     2.8     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     1.7     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     4.8     0.3       7.0
2002    4.7    -1.3     2.4     1.9    -2.0     3.3    -0.4       6.0
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    1.7    -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    3.1    -5.2    -0.4    -4.4    -6.5     0.8    -4.0       8.8

2010    3.1     2.8     2.6     3.1     0.6     0.3     0.5       0.3
2011    0.7     1.9     1.0     2.7     2.2     0.8     1.7      -1.2
2012    1.0     2.4     1.4     2.9     2.1     0.5     1.5      -1.3

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



Table 2. Private business sector: productivity and related measures
for the 1987-2012 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    -0.1     0.3     3.7     3.2     3.9     3.4       1.2

1990    2.2    -1.4     0.6     1.5    -0.1     3.0     0.9       3.6
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       1.4
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       5.8
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     0.3     1.0     3.5     2.0     3.2     2.4       1.4
2006    1.0    -0.1     0.4     3.1     2.4     3.2     2.7       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    3.2    -4.8    -0.1    -4.2    -6.5     0.6    -4.1       8.5

2010    3.0     2.7     2.5     3.0     0.7     0.3     0.5       0.3
2011    0.4     1.4     0.7     2.4     2.1     1.0     1.7      -1.0
2012    0.9     2.4     1.4     2.8     2.0     0.4     1.4      -1.5

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



Table 3. Private nonfarm business sector: indexes of productivity and related
measures, 1987-2012

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    111.1   82.3    54.2    75.5    48.8    65.9      59.6
1988    67.4    112.2   83.1    56.7    78.2    50.6    68.3      60.0
1989    67.9    111.8   83.1    58.7    80.8    52.6    70.7      60.7

1990    69.2    109.9   83.5    59.6    80.8    54.2    71.4      62.9
1991    70.3    105.9   82.7    59.1    79.9    55.8    71.5      66.4
1992    73.1    107.5   84.6    61.3    80.7    57.0    72.5      68.0
1993    73.6    107.9   84.8    63.5    83.4    58.9    74.9      68.2
1994    74.4    109.1   85.5    66.5    86.9    61.0    77.8      68.2

1995    74.7    107.9   85.5    68.7    89.2    63.7    80.3      69.3
1996    76.7    107.5   86.7    71.7    91.1    66.7    82.8      71.3
1997    77.8    107.1   87.2    75.4    94.8    70.4    86.5      72.6
1998    80.1    105.9   88.4    79.3    97.1    74.9    89.7      75.7
1999    82.7    104.6   89.9    83.8    99.6    80.1    93.2      79.1

2000    85.6    102.6   91.4    87.5   100.8    85.3    95.8      83.4
2001    88.3     98.9   92.0    88.4    99.2    89.3    96.0      89.2
2002    92.4     97.6   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     95.1   99.3   103.9   102.2   109.3   104.6     108.6
2009   106.5     90.1   98.9    99.3    95.6   110.2   100.4     118.2

2010   109.8     92.7  101.5   102.3    96.2   110.4   100.9     118.5
2011   110.6     94.4  102.5   105.1    98.3   111.4   102.6     117.1
2012   111.6     96.6  103.9   108.2   100.3   111.9   104.1     115.5

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



Table 4. Private business sector: indexes of productivity and related
measures, 1987-2012

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    109.0   81.3    54.2    76.4    49.7    66.6      60.0
1988    66.4    109.6   82.0    56.5    78.9    51.6    69.0      60.6
1989    67.1    109.4   82.2    58.6    81.5    53.6    71.3      61.3

1990    68.6    107.9   82.7    59.5    81.4    55.2    72.0      63.6
1991    69.7    104.2   81.9    59.1    80.5    56.7    72.1      66.9
1992    72.6    106.1   84.0    61.4    81.4    57.9    73.1      68.4
1993    73.1    106.4   84.2    63.4    83.9    59.7    75.3      68.7
1994    73.8    107.8   84.8    66.6    87.7    61.8    78.5      68.4

1995    73.8    106.4   84.6    68.5    90.0    64.4    81.0      69.4
1996    76.0    106.4   86.0    71.7    91.8    67.3    83.3      71.4
1997    77.3    106.4   86.7    75.4    95.4    70.9    86.9      72.7
1998    79.6    105.2   88.0    79.2    97.6    75.3    90.0      75.7
1999    82.4    104.1   89.6    83.6    99.9    80.3    93.3      79.1

2000    85.3    102.4   91.2    87.4   101.1    85.4    95.9      83.3
2001    88.0     98.8   91.9    88.3    99.3    89.3    96.0      89.1
2002    92.1     97.7   94.1    90.0    97.4    92.1    95.7      94.3
2003    95.7     98.3   96.6    92.9    97.0    94.5    96.1      97.4
2004    98.4     99.7   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     99.9  100.4   103.1   102.4   103.2   102.7     101.0
2007   102.6     99.2  100.8   105.2   103.6   106.1   104.4     103.4
2008   103.3     95.6   99.5   103.8   102.1   108.7   104.3     108.1
2009   106.6     91.0   99.4    99.5    95.5   109.4   100.1     117.3

2010   109.9     93.4  101.8   102.5    96.1   109.7   100.6     117.6
2011   110.3     94.8  102.5   105.0    98.2   110.8   102.4     116.4
2012   111.3     97.1  104.0   107.9   100.2   111.2   103.8     114.7

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 combined units of labor input 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.

Last Modified Date: July 11, 2013
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