Economic News Release

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


For release 10:00 a.m. (EDT) Wednesday, June 10, 2015                                                 USDL-15-1133

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:
                              SELECTED SERVICE-PROVIDING INDUSTRIES, 2014

Labor productivity - defined as output per hour - rose in 60 percent of the 25 service-providing industries 
covered in 2014, the U.S. Bureau of Labor Statistics reported today. This was equal to 2013, when labor 
productivity also rose in 60 percent of industries. Output and hours increased in more industries in 2014 
than in the previous year. Unit labor costs, which reflect the total labor costs required to produce a unit of 
output, declined in 36 percent of the industries. Each of the nine industries with declines in unit labor costs 
also recorded increases in productivity.

Radio and television broadcasting recorded the largest increase in labor productivity in 2014, followed by 
cable and other subscription programming. The largest decline in productivity was in engineering services. 
(See table 1.)

*******************************************************************************************************
*                           2014 measures available for selected industries                           *
*                                                                                                     *
* Labor productivity and related measures are being released through 2014 for a group of 25 detailed  *
* and 5 aggregate service-providing industries. These measures are based on trends in production and  *
* wages. Labor productivity measures for other service-providing industries are being released        *
* through 2013.                                                                                       *
*******************************************************************************************************

Labor Productivity and Unit Labor Costs, 2014

Output per hour increased in 15 of the 25 industries studied in 2014. In each of these industries, 
productivity rose as output growth was accompanied by declines or more modest increases in hours. 
Productivity gains of over 7 percent occurred in three industries where output increases coincided with 
declines in hours: radio and television broadcasting, cable and other subscription programming, and 
drycleaning and laundry services. Two industries, air transportation and natural gas distribution, recorded 
output gains of greater than 2 percent and yet also had productivity declines because of larger increases in 
hours.

Unit labor costs fell in nine industries in 2014. All unit labor cost declines occurred in industries where 
productivity rose. Conversely, each of the industries where productivity fell also recorded an increase 
in unit labor costs. Total labor compensation rose in 2014 in 23 of the 25 industries measured.

Labor Productivity and Unit Labor Costs, 2013

In 2013, productivity rose in just over half of the service-providing industries studied. Output 
increased in about 64 percent of the industries, as did hours. (See table 2.) Three industries recorded double-digit 
growth in productivity in 2013: book publishers, wireless telecommunications carriers, and coin-operated 
laundries and drycleaners. Each of these three industries experienced growth in output along with a decline 
in hours.

Productivity and cost measures are published in this release for the first time for three industries: 
accounting and bookkeeping services (NAICS 5412), other accounting services (NAICS 541219), and 
gambling industries (NAICS 7132). Productivity rose in each of these three industries in 2013.

Output rose in two-thirds of the 12 largest (by employment) service-providing industries studied, while 
hours grew in all but two. Productivity growth was greatest in hotels and motels, except casino hotels, 
where moderate output growth outpaced the increase in hours. Productivity fell the most in engineering 
services, where growth in hours coincided with a decline in output. Unit labor costs increased in all but 
one industry, general warehousing and storage.

Productivity Trends in Selected Time Periods

Productivity rose in approximately 76 percent of the service-providing industries studied over the long 
term, which for the majority of industries covers the period 1987 to 2013. Median productivity growth 
among these industries was approximately 1.7 percent per year. (See table 3.) Productivity growth 
over the long term was associated with rising output in many industries, while hours increased in 
slightly more than half.

Productivity also increased in 60 percent of the industries studied between 2007 and 2013, despite the 
fact that the period encompassed a severe recession. However, only 36 percent of the industries saw 
increases in output, while just over a quarter experienced growth in hours.

Additional Information

This release updates productivity measures to 2014 for 25 detailed service-providing industries. 
Additionally, productivity measures for a larger group of 55 detailed service-providing industries 
have been updated through 2013. Output estimates for 2014 are based on trends in industrial 
production from the Quarterly Service Survey (QSS) from the U.S. Census Bureau, along with data on 
price changes from BLS. Labor compensation in 2014 is based on trends in industry wages from the 
BLS Quarterly Census of Employment and Wages (QCEW). Data in this release for 2013 and 2014 
are preliminary and subject to revision.

For the first time, the industries included in this news release are classified according to the 2012 
NAICS. Indexes have been rebased from 2002=100 to 2007=100 starting with this release. 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.


                                          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; the characteristics and effort of the workforce; and 
managerial skill.

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 measures are constructed primarily using data from the economic censuses and 
annual surveys of the U.S. Census Bureau, U.S. Department of Commerce, together with 
information on price changes from BLS. Other data sources include:  the Energy Information 
Administration, U.S. Department of Energy; the Bureau of Transportation Statistics, U.S. 
Department of Transportation; the U.S. Geological Survey, U.S. Department of the Interior; the 
U.S. Postal Service; the Postal Rate Commission; and the Federal Deposit Insurance Corporation. 
Industrial production data from the Quarterly Service Survey from the Census Bureau are used to 
construct advance output for 2014 for some industries.

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. Additional sources of 
employment and hours data for certain service industries include the Association of American 
Railroads, the U.S. Department of Transportation, and the U.S. Postal Service. 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 2014 are constructed using 
data from the BLS Quarterly Census of Employment and Wages (QCEW).

Table 1. Percent change in labor productivity, unit labor costs, and related data, 2013-2014
Industry 2012 NAICS code 2014
Employment
(thousands)
Percent change, 2013-2014
Labor productivity Output Hours Labor compensation Unit labor costs

Utilities

Utilities

22

553.0 1.5 2.9 1.4 2.8 -0.1

Utilities

221

553.0 1.5 2.9 1.4 2.8 -0.1

Power generation and supply

2211

392.1 1.5 1.9 0.4 1.7 -0.2

Natural gas distribution

2212

113.1 -1.5 2.8 4.3 6.6 3.7

Water, sewage and other systems

2213

47.8 0.8 4.5 3.6 3.9 -0.6

Transportation and Warehousing

Air transportation

481

422.8 -0.2 2.7 2.9 6.7 4.0

Line-haul railroads

482111

187.4 -1.2 0.3 1.5 7.3 7.0

Truck transportation

484

1,631.0 3.5 7.5 3.9 6.3 -1.1

General freight trucking

4841

1,163.7 3.2 7.2 3.9 5.4 -1.7

General freight trucking, local

48411

303.7 2.5 9.5 6.9 4.8 -4.4

General freight trucking, long-distance

48412

860.0 3.8 6.7 2.8 5.6 -1.0

Postal service

491

593.0 -1.6 -2.4 -0.7 1.8 4.3

Postal service

4911

593.0 -1.6 -2.4 -0.7 1.8 4.3

Couriers and messengers

492

603.9 -6.5 -1.4 5.4 4.8 6.3

Warehousing and storage

493

740.7 0.6 2.0 1.3 6.0 3.9

Warehousing and storage

4931

740.7 0.6 2.0 1.3 6.0 3.9

Information

Publishing

511

751.3 5.7 3.2 -2.3 6.8 3.4

Newspaper publishers

51111

228.9 -4.1 -6.5 -2.4 -1.3 5.6

Periodical publishers

51112

109.9 -2.8 -4.8 -2.1 2.1 7.2

Software publishers

5112

312.5 6.7 8.4 1.5 11.2 2.7

Broadcasting, except Internet

515

290.7 8.9 5.6 -3.0 1.4 -4.0

Radio and television broadcasting

5151

226.8 9.5 6.1 -3.1 7.5 1.3

Cable and other subscription programming

5152

63.9 8.3 5.3 -2.8 -11.4 -15.8

Wired telecommunications carriers

5171

614.3 -0.1 0.8 0.9 1.3 0.5

Wireless telecommunications carriers

5172

159.1 4.2 9.7 5.3 4.3 -4.9

Real Estate and Rental and Leasing

Truck, trailer, and RV rental and leasing

53212

64.5 1.0 8.8 7.7 9.1 0.3

Professional and Technical Services

Accounting and bookkeeping services

5412

1,108.8 2.7 7.9 5.1 5.8 -1.9

Accounting and bookkeeping services

54121

1,108.8 2.7 7.9 5.1 5.8 -1.9

Engineering services

54133

951.8 -8.3 -6.7 1.8 3.3 10.6

Administrative and Waste Services

Travel arrangement and reservation services

5615

214.1 6.2 1.9 -4.1 6.6 4.6

Health Care and Social Assistance

Medical and diagnostic laboratories

6215

261.8 1.3 1.8 0.4 3.4 1.6

Arts, Entertainment, and Recreation

Gambling industries

7132

139.9 0.4 3.1 2.7 1.3 -1.8

Other Services

Automotive repair and maintenance

8111

1,113.8 -1.2 0.8 2.0 6.0 5.2

Drycleaning and laundry services

8123

317.2 7.1 6.3 -0.7 5.4 -0.9