Economic News Release

Productivity and Costs by Industry: Manufacturing Industries News Release


For release 10:00 a.m. (EDT) Thursday, March 27, 2014                                      USDL-14-0492

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 INDUSTRIES, 2012

Labor productivity -- defined as output per hour -- rose in 54 percent of the detailed manufacturing 
industries covered in 2012, the U.S. Bureau of Labor Statistics reported today. This was down from 68 
percent in 2011. Unit labor costs, which reflect the total labor costs required to produce a unit of output, 
declined in 39 percent of the industries in 2012 compared to 49 percent in 2011. More than half of 
industries with productivity increases posted declines in unit labor costs.

Output and hours rose in more industries in 2012 than in the previous year. (See table 1.) 
Output rose in 2012 in 40 of 57 NAICS 4-digit manufacturing industries for which data were available, 
up from 37 industries in 2011. Hours increased in even more industries, 41 compared to 32 in 2011.  
Hours rose in more industries in 2012 than in any year since 1997. 

The latest industry productivity data for manufacturing industries and for industries in other sectors are 
available on the BLS website at www.bls.gov/lpc/iprprodydata.htm.

******************************************************************************************************
*                             Industry Productivity Hours Series Changes                             *
*                                                                                                    *
* Beginning with this news release, labor hours for manufacturing industries represent hours worked. *  
* See Technical Note in this news release for more information about how hours worked are derived.   *
******************************************************************************************************

During the 1987-2012 period, productivity rose in all but 1 industry, with productivity growth in most 
industries averaging between 0.1 and 4.0 percent per year. Productivity also increased in a majority of 
industries between 2007 and 2012, despite the fact that the period encompassed a severe recession. However, 
fewer industries had productivity growth greater than 2 percent per year, and productivity declined in 18 
industries. In the most recent year, rates of productivity change were more evenly distributed than in either 
of the longer time periods.

From 1987 to 2012, productivity growth was driven by rising output in many industries, while hours increased 
in very few. Productivity increased in fewer industries from 2007 to 2012, as output and hours rose in 
relatively few industries. In most industries, productivity advanced as output was produced with fewer hours. 
In contrast, output and hours rose in more industries in 2012 as the economic recovery continued. Increases 
in hours more than offset increases in output in a number of industries, with the result that productivity 
rose in fewer industries in 2012 than in the other two periods.

3-Digit NAICS Industries

Labor productivity increased in 13 of the 21 NAICS 3-digit manufacturing industries in 2012, as output 
increased in 17 industries and hours fell in 5 industries. Productivity rose fastest in transportation
equipment, where output increased much faster than hours. Of the 21 industries, 10 registered greater
productivity growth, or smaller productivity declines, than in the previous year. 

Unit labor costs fell in 9 of the 21 industries. Unit labor costs declined more frequently in industries 
where productivity rose, as productivity gains offset increases in hourly compensation. Unit labor costs 
fell in 8 of the 13 industries where productivity rose; in the 8 industries where productivity fell, 7 
recorded an increase in unit labor costs.
 
Revisions

This release updates productivity measures to 2012 for all 21 NAICS 3-digit and for 57 of the 86 NAICS 
4-digit manufacturing industries. Data from the 2012 Economic Census were not available at the time of 
this release. As a result, BLS developed output estimates for 2012 for the industries covered in this 
release based on trends in industrial production from the Federal Reserve Board and on trends from the 
manufacturers’ shipments, inventories, and orders (M3) survey from the Census Bureau, along with data 
on price changes from BLS.  Labor compensation in 2012 is based on trends in industry wages from the 
BLS Quarterly Census of Employment and Wages (QCEW). The hours measures in this news release 
incorporate the annual benchmark revision of the BLS Current Employment Statistics (CES) survey 
published in February 2014. For the first time, labor hours in this news release represent hours at work. 
Data on hours paid from the CES were adjusted using industry hours worked/hours paid ratios derived 
from National Compensation Survey (NCS) data.  Data in this release are preliminary and subject to 
revision. Measures for 2012 for all 3-digit and 4-digit industries will be updated in a future release.

The industries included in this news release are classified according to the 2007 NAICS. While the rates 
of change reported by BLS in this release are rounded to one decimal place, all percent changes are 
calculated using index numbers rounded to three decimal places.

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

More detailed data for industries covered in this release and for additional industries are available on 
the BLS Labor Productivity and Costs website at www.bls.gov/lpc. Data include productivity and related 
indexes; rates of change; and levels of industry employment, hours, nominal value of production, and 
labor compensation. Additional information can be obtained by calling the Division of Industry 
Productivity Studies (202-691-5618) or by sending a request by e-mail to dipsweb@bls.gov. 
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.

Customers can subscribe to the industry productivity program’s news releases on the BLS website at 
https://subscriptions.bls.gov/accounts/USDOLBLS/subscriber/new. 


                                            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.  The 2012 estimates are constructed with data on industrial production from the Federal Reserve 
and manufacturers’ shipments, inventories, and orders from the Census Bureau.

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 2012 are constructed using data from the BLS Quarterly Census of Employment and 
Wages (QCEW).

Table 1. Percent change in output per hour, unit labor costs, and related data, 2011-2012
Industry NAICS code 2012
Employment
(thousands)
Percent change, 2011-2012
Output per hour Output Hours Labor compensation Unit labor costs

Manufacturing

Food

311

1,514.8 1.1 3.7 2.6 3.3 -0.4

Grain and oilseed milling

3112

60.7 -2.3 -0.1 2.3 7.2 7.3

Fruit and vegetable preserving and specialty

3114

173.5 4.4 4.4 0.0 0.6 -3.7

Dairy products

3115

136.4 -2.8 2.5 5.5 4.3 1.7

Animal slaughtering and processing

3116

485.2 0.5 0.5 -0.1 0.9 0.4

Bakeries and tortilla manufacturing

3118

317.4 -2.0 4.0 6.2 2.6 -1.3

Other food products

3119

176.9 1.0 7.0 6.0 6.5 -0.5

Beverages and tobacco products

312

195.9 1.8 1.6 -0.2 3.2 1.6

Beverages

3121

181.5 3.4 4.0 0.5 4.7 0.7

Tobacco and tobacco products

3122

14.4 5.6 -4.5 -9.5 -5.6 -1.2

Textile mills

313

128.0 0.4 2.8 2.3 0.7 -2.0

Fiber, yarn, and thread mills

3131

28.5 -0.5 -4.2 -3.7 -1.2 3.2

Fabric mills

3132

60.0 1.0 4.7 3.7 1.7 -2.9

Textile and fabric finishing and coating mills

3133

39.5 -2.7 2.7 5.5 0.2 -2.4

Textile product mills

314

125.9 -0.6 0.5 1.1 0.3 -0.2

Textile furnishings mills

3141

55.2 0.4 -1.2 -1.6 -2.4 -1.2

Other textile product mills

3149

70.7 -1.1 2.4 3.5 2.8 0.4

Apparel

315

169.9 -1.5 -3.5 -2.1 -2.7 0.8

Leather and allied products

316

35.0 -8.1 -0.1 8.6 4.7 4.8

Wood products

321

361.5 1.2 4.3 3.0 3.7 -0.5

Sawmills and wood preservation

3211

89.9 1.9 4.2 2.2 4.6 0.4

Plywood and engineered wood products

3212

64.0 -3.6 4.7 8.5 5.6 0.9

Other wood products

3219

207.6 2.4 4.2 1.7 2.6 -1.5

Paper and paper products

322

381.9 0.6 -2.4 -3.0 0.4 2.9

Pulp, paper, and paperboard mills

3221

108.7 0.5 -2.5 -3.0 1.4 4.0

Converted paper products

3222

273.2 0.7 -2.3 -2.9 -0.3 2.1

Printing and related support activities

323

482.2 -0.2 -2.4 -2.2 -1.0 1.5

Printing and related support activities

3231

482.2 -0.2 -2.4 -2.2 -1.0 1.5

Petroleum and coal products

324

113.2 -8.7 1.0 10.6 6.4 5.4

Petroleum and coal products

3241

113.2 -8.7 1.0 10.6 6.4 5.4

Chemicals

325

797.6 -0.4 0.2 0.5 3.8 3.6

Basic chemicals

3251

142.6 0.7 0.2 -0.5 1.6 1.3

Agricultural chemicals

3253

37.3 -7.2 -3.2 4.3 6.9 10.5

Pharmaceuticals and medicines

3254

273.1 -3.6 -3.5 0.1 6.3 10.1

Paints, coatings, and adhesives

3255

57.6 -6.4 -1.1 5.7 7.0 8.2

Plastics and rubber products

326

650.5 1.8 3.2 1.3 3.9 0.7

Plastics products

3261

519.1 2.8 4.3 1.4 4.5 0.2

Rubber products

3262

131.4 -1.9 -1.1 0.9 1.9 3.0

Nonmetallic mineral products

327

391.2 -0.4 1.1 1.5 3.7 2.5

Clay products and refractories

3271

54.3 -1.7 4.5 6.3 0.9 -3.4

Glass and glass products

3272

86.7 -1.2 -2.9 -1.7 2.6 5.6

Cement and concrete products

3273

167.2 2.8 5.5 2.6 3.8 -1.5

Lime and gypsum products

3274

14.1 2.6 4.5 1.9 10.6 5.9

Other nonmetallic mineral products

3279

68.9 -2.7 -3.6 -0.9 4.6 8.5

Primary metals

331

406.9 0.8 2.1 1.3 5.0 2.9

Alumina and aluminum production

3313

61.3 -2.8 3.4 6.4 3.4 0.0

Foundries

3315

128.0 4.5 3.7 -0.7 6.5 2.7

Fabricated metal products

332

1,434.1 2.0 7.2 5.1 7.4 0.2

Forging and stamping

3321

98.3 2.3 6.1 3.8 8.4 2.2

Cutlery and hand tools

3322

42.2 -2.3 5.2 7.6 6.6 1.3

Architectural and structural metals

3323

344.9 4.7 8.3 3.4 7.0 -1.2

Spring and wire products

3326

42.9 -4.6 -7.3 -2.8 2.4 10.4

Machine shops and threaded products

3327

371.6 2.2 7.2 4.8 7.3 0.2

Coating, engraving, and heat treating metals

3328

137.2 2.1 7.1 4.8 6.5 -0.6

Other fabricated metal products

3329

276.2 0.0 8.6 8.6 8.6 0.0

Machinery

333

1,114.5 3.4 7.0 3.5 5.7 -1.2

Agriculture, construction, and mining machinery

3331

248.5 5.4 13.0 7.2 10.9 -1.9

Industrial machinery

3332

107.2 -3.8 -3.4 0.3 1.0 4.6

HVAC and commercial refrigeration equipment

3334

128.5 3.1 0.8 -2.2 -0.5 -1.3

Metalworking machinery

3335

184.2 0.3 8.2 7.9 8.3 0.1

Computer and electronic products

334

1,097.3 2.7 1.4 -1.2 0.1 -1.3

Semiconductors and electronic components

3344

388.1 5.5 5.3 -0.2 -0.2 -5.2

Electronic instruments

3345

400.5 -5.5 -5.7 -0.2 0.3 6.4

Electrical equipment and appliances

335

374.8 -2.0 1.9 4.0 4.4 2.4

Electric lighting equipment

3351

46.7 -2.6 2.9 5.6 12.8 9.7

Household appliances

3352

55.6 -3.3 -0.4 3.1 2.0 2.3

Electrical equipment

3353

144.3 -3.0 2.6 5.7 3.4 0.8

Other electrical equipment and components

3359

128.2 0.2 2.1 1.9 3.5 1.4

Transportation equipment

336

1,471.5 5.6 12.8 6.8 5.2 -6.7

Motor vehicles

3361

167.8 12.2 20.0 6.9 5.6 -12.0

Motor vehicle parts

3363

486.1 5.0 16.0 10.4 7.7 -7.2

Aerospace products and parts

3364

500.7 4.8 6.7 1.8 2.8 -3.7

Ship and boat building

3366

130.9 -2.1 7.1 9.4 6.7 -0.4

Other transportation equipment

3369

34.1 15.4 21.3 5.1 -3.9 -20.8

Furniture and related products

337

378.4 3.9 4.7 0.7 2.8 -1.8

Household and institutional furniture

3371

240.2 5.1 6.4 1.2 2.7 -3.4

Miscellaneous manufacturing

339

632.8 4.4 5.5 1.1 4.6 -0.9

Medical equipment and supplies

3391

315.6 5.8 6.4 0.6 4.7 -1.6