Economic News Release

Productivity and Costs by Industry: Manufacturing Industries News Release


For release 10:00 a.m. (EDT) Thursday, April 7, 2016                                 USDL-16-0699

Technical information: 	(202) 691-5618  •  dipsweb@bls.gov  •  www.bls.gov/lpc 
Media contact:		(202) 691-5902  •  PressOffice@bls.gov

                                   PRODUCTIVITY AND COSTS BY INDUSTRY:
                                MANUFACTURING AND MINING INDUSTRIES, 2015

Labor productivity rose in 31 of 63 manufacturing and mining industries in 2015, the U.S. Bureau of 
Labor Statistics reported today. This was higher than 2014 when labor productivity rose in 26 industries. 
Output and hours worked increased in fewer industries in 2015 than in the previous year.

Unit labor costs rose in 43 of 59 manufacturing industries and in three of four mining industries. Twelve 
industries with productivity increases posted declines in unit labor costs. Increases in labor productivity 
mitigate the impact of rising hourly compensation on unit labor costs facing employers.

Trends in labor productivity and unit labor costs in NAICS 3-digit industries in 2015

Manufacturing
  *     Labor productivity increased in 9 manufacturing industries in 2015, as output increased in 12 
  	industries and hours worked fell in seven industries.
  *     Productivity rose fastest in the petroleum and coal products industry, where output increased 
        by 4.6 percent and hours worked declined 2.3 percent.
  *	Unit labor costs increased in 16 manufacturing industries. 
  *	For five industries, productivity outpaced hourly compensation growth, leading to declines in
        unit labor costs.
        
Mining
  *	Productivity rose 11.4 percent in the oil and gas extraction industry, where output increased
  	and hours worked declined. 
  *	Output in mining, except oil and gas, declined at a greater pace than hours worked, resulting
  	in a productivity decline of 1.4 percent. 
  *	Productivity outpaced hourly compensation gains in the oil and gas extraction industry,
  	resulting in a 6.7 percent decline in unit labor costs, while unit labor costs increased 4.8
  	percent in mining, except oil and gas.

Productivity trends in selected time periods

  *	During the 1987-2014 period, productivity rose in 86 manufacturing and mining 
  	industries, with median productivity growth of approximately 1.7 percent per year. 
  *	Productivity growth in the 1987-2014 period was associated with output rising in 60
  	manufacturing and mining industries, while hours worked increased in only 14. 
  *	Productivity increased in 54 industries in the more recent 2007-2014 period, despite the
  	period encompassing a severe recession.
  *	The 2007-2014 productivity increases are predominantly the result of a decline in hours
  	worked, rather than an increase in output, as 70 industries experienced decreasing hours
  	worked in this period compared to 25 industries that documented increasing output. 
 
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Technical Note

Labor Productivity: Labor productivity describes the relationship between real output and the 
labor hours involved in its production. These measures show the changes from period to period 
in the amount of goods and services produced per hour worked. Although the labor productivity 
measures relate output in an industry to hours worked of all persons in that industry, they do 
not measure the specific contribution of labor to growth in output. 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; in addition to the 
characteristics and effort of the workforce.

Unit Labor Costs:  Unit labor costs represent the cost of labor required to produce one unit of 
output. The unit labor cost indexes are computed by dividing an index of nominal 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.

Output:  Industry output is measured as an annual-weighted index of the changes in the various 
products (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 reflects sectoral 
value of production, derived by adjusting shipments for changes in inventories and removing 
intra-industry transactions. Industry output measures are constructed primarily using data from 
the economic censuses and annual surveys of the Census Bureau, U.S. Department of Commerce, together 
with data on price changes primarily from BLS. Data from the Bureau of Economic Analysis, U.S. 
Department of Commerce, is utilized in part to construct intra-industry transactions. Manufacturing 
industry output for 2015 is constructed with data on industrial production from the Federal Reserve 
and manufacturers’ shipments, inventories, and orders from the Census Bureau. Other data sources 
include the Energy Information Administration, U.S. Department of Energy; and the U.S. Geological 
Survey, U.S. Department of Interior.

Labor Hours:  Labor hours reflect annual hours worked by all employed persons in an industry. 
Data on industry employment and hours come primarily from the BLS Current Employment Statistics (CES) 
survey and Current Population Survey (CPS). CES data on the number of total and production worker 
jobs held by wage and salary workers in nonfarm establishments are supplemented with CPS self-employed 
and unpaid family worker data to estimate industry employment. Hours worked estimates are derived using 
CES and CPS employment, CES data on the average weekly hours paid of production workers, CPS data on 
hours of nonproduction, self-employed, and unpaid family workers, and ratios of hours worked to hours 
paid based on data from the National Compensation Survey (NCS). For some industries, employment and 
hours data are supplemented or further disaggregated using data from the BLS Quarterly Census of 
Employment and Wages (QCEW), the Census Bureau, or other sources. Hours worked are estimated separately 
for different types of workers and then are directly aggregated; no adjustments for labor composition 
are made.

Labor Compensation:  Labor 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 both 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. 
Industry compensation measures are constructed primarily using data from the economic censuses and 
annual surveys of the Census Bureau, U.S. Department of Commerce. The estimates for 2015 are constructed 
using data from the BLS Quarterly Census of Employment and Wages (QCEW).

Table 1. Recent labor productivity, unit labor costs, and related data
Industry 2012 NAICS code 2015
Employment
(thousands)
Percent change, 2014-2015
Labor Productivity Unit labor costs Output Hours worked Labor compensation

Mining

Mining

21

789.8 16.5 -10.5 4.2 -10.6 -6.8

Oil and gas extraction

211

193.2 11.4 -6.7 7.4 -3.6 0.2

Oil and gas extraction

2111

193.2 11.4 -6.7 7.4 -3.6 0.2

Mining, except oil and gas

212

204.6 -1.4 4.8 -5.7 -4.4 -1.1

Coal mining

2121

67.8 4.6 2.3 -10.2 -14.2 -8.2

Metal ore mining

2122

42.1 -4.6 6.5 -7.6 -3.1 -1.6

Nonmetallic mineral mining and quarrying

2123

94.7 -3.9 8.2 -0.3 3.7 7.9

Manufacturing

Food

311

1,548.7 -2.4 3.2 0.9 3.3 4.1

Grain and oilseed milling

3112

60.3 -0.9 7.8 -1.0 0.0 6.8

Fruit and vegetable preserving and specialty

3114

170.5 -0.9 10.5 -8.0 -7.1 1.7

Dairy products

3115

136.6 -3.2 2.9 0.6 3.9 3.5

Animal slaughtering and processing

3116

486.5 -0.5 1.3 3.6 4.1 4.9

Bakeries and tortilla products

3118

331.3 -7.3 2.3 1.1 9.1 3.4

Other food products

3119

194.8 -2.5 0.9 2.3 4.9 3.2

Beverages and tobacco products

312

229.8 -1.8 7.5 1.2 3.1 8.8

Beverages

3121

216.5 -4.2 9.0 -0.7 3.7 8.2

Tobacco

3122

13.3 11.3 9.4 4.8 -5.9 14.6

Textile mills

313

124.2 -2.0 2.9 0.0 2.1 2.9

Fiber, yarn, and thread mills

3131

28.6 5.6 0.3 3.0 -2.5 3.4

Fabric mills

3132

61.0 -4.6 3.2 -0.6 4.2 2.6

Textile and fabric finishing mills

3133

34.6 -3.4 4.2 -0.9 2.6 3.2

Textile product mills

314

131.0 -2.7 3.1 -0.3 2.5 2.8

Textile furnishings mills

3141

55.9 -0.5 1.4 -1.2 -0.6 0.2

Other textile product mills

3149

75.1 -4.4 4.6 0.6 5.2 5.3

Apparel

315

158.6 -0.1 -2.8 0.1 0.2 -2.7

Leather and allied products

316

32.9 -8.9 15.6 -5.0 4.4 9.9

Wood products

321

400.8 -0.3 5.3 0.1 0.4 5.4

Sawmills and wood preservation

3211

93.3 7.4 3.3 0.6 -6.2 4.0

Plywood and engineered wood products

3212

75.4 -2.0 0.0 4.3 6.4 4.3

Other wood products

3219

232.1 -2.3 7.5 -0.9 1.4 6.5

Paper

322

373.3 -0.5 2.8 -1.6 -1.1 1.3

Pulp, paper, and paperboard mills

3221

101.8 1.9 0.8 -1.5 -3.4 -0.8

Converted paper products

3222

271.5 -1.5 4.0 -1.6 -0.1 2.4

Printing and related support activities

323

472.8 4.2 -2.1 3.5 -0.7 1.3

Printing and related support activities

3231

472.8 4.2 -2.1 3.5 -0.7 1.3

Petroleum and coal products

324

114.4 7.0 -1.0 4.6 -2.3 3.6

Petroleum and coal products

3241

114.4 7.0 -1.0 4.6 -2.3 3.6

Chemicals

325

822.3 1.7 1.8 2.3 0.6 4.2

Basic chemicals

3251

150.6 0.9 2.9 2.6 1.7 5.6

Resin, rubber, and artificial fibers

3252

95.4 -0.2 0.3 2.2 2.4 2.5

Agricultural chemicals

3253

37.0 11.6 0.5 2.4 -8.3 2.9

Pharmaceuticals and medicines

3254

282.5 3.9 1.5 2.9 -1.0 4.5

Paints, coatings, and adhesives

3255

61.9 7.6 0.9 2.8 -4.5 3.7

Plastics and rubber products

326

688.9 1.2 0.2 3.1 1.9 3.3

Plastics products

3261

554.8 0.7 1.1 2.9 2.2 4.1

Rubber products

3262

134.1 3.1 -3.1 3.9 0.7 0.6

Nonmetallic mineral products

327

411.8 1.9 2.4 3.0 1.1 5.5

Clay products and refractories

3271

48.8 0.7 0.5 3.3 2.6 3.8

Glass and glass products

3272

89.6 2.1 2.3 -1.2 -3.3 1.1

Cement and concrete products

3273

183.5 -0.6 4.9 4.6 5.2 9.7

Lime and gypsum products

3274

14.4 6.0 -7.5 3.0 -2.8 -4.8

Other nonmetallic mineral products

3279

75.5 7.6 -0.1 4.3 -3.1 4.2

Primary metals

331

396.0 -3.0 6.0 -6.4 -3.5 -0.8

Alumina and aluminum production

3313

59.0 -3.8 3.6 -1.5 2.4 2.1

Foundries

3315

125.1 0.8 4.5 -3.9 -4.7 0.3

Fabricated metal products

332

1,486.9 -0.6 2.7 -1.4 -0.8 1.2

Forging and stamping

3321

101.1 -1.1 -1.5 1.9 3.1 0.4

Cutlery and handtools

3322

39.9 -1.4 4.6 -4.6 -3.2 -0.2

Architectural and structural metals

3323

372.8 -3.8 6.0 -1.9 2.0 4.0

Boilers, tanks, and shipping containers

3324

99.3 -0.1 -1.2 0.0 0.1 -1.1

Spring and wire products

3326

44.1 1.4 -1.7 2.5 1.1 0.7

Machine shops and threaded products

3327

381.2 -0.8 3.8 -3.9 -3.1 -0.3

Coating, engraving, and heat treating metals

3328

141.8 7.4 0.4 2.0 -5.0 2.4

Other fabricated metal products

3329

281.9 -0.2 2.0 -1.5 -1.3 0.4

Machinery

333

1,136.0 1.4 3.3 -1.6 -3.0 1.7

Agriculture, construction, and mining machinery

3331

243.0 1.1 3.0 -7.0 -8.1 -4.2

Industrial machinery

3332

113.5 8.0 -2.9 8.8 0.8 5.7

HVAC and commercial refrigeration equipment

3334

129.8 2.7 -0.5 1.9 -0.8 1.5

Metalworking machinery

3335

186.5 -0.1 4.6 -2.7 -2.6 1.8

Computer and electronic products

334

1,053.8 3.5 -0.9 3.7 0.2 2.8

Semiconductors and electronic components

3344

368.6 3.4 -2.2 3.8 0.3 1.5

Electronic instruments

3345

400.5 0.6 1.1 3.5 2.9 4.6

Electrical equipment and appliances

335

384.1 -5.1 3.5 -2.2 3.0 1.2

Electric lighting equipment

3351

45.9 3.8 -0.3 1.0 -2.7 0.7

Household appliances

3352

62.6 -10.4 10.5 -6.6 4.2 3.2

Electrical equipment

3353

145.1 -5.9 3.0 -4.0 2.0 -1.1

Other electrical equipment and components

3359

130.5 -1.5 -0.8 4.1 5.8 3.3

Transportation equipment

336

1,607.1 0.4 -1.5 3.2 2.8 1.7

Motor vehicles

3361

202.2 -0.5 -6.9 4.6 5.2 -2.6

Motor vehicle parts

3363

563.7 1.7 -2.1 7.5 5.7 5.2

Aerospace products and parts

3364

488.8 1.0 0.2 0.0 -1.0 0.2

Ship and boat building

3366

140.1 -4.1 5.2 -5.1 -1.0 -0.1

Furniture and related products

337

409.5 4.2 2.0 3.5 -0.7 5.6

Household and institutional furniture

3371

263.1 3.7 2.4 3.2 -0.6 5.6

Other furniture related products

3379

36.3 7.6 2.1 3.8 -3.6 6.0

Miscellaneous manufacturing

339

658.1 -4.0 6.2 -1.4 2.8 4.8

Medical equipment and supplies

3391

326.5 -6.9 7.1 -1.2 6.1 5.8