Economic News Release

Multifactor Productivity Trends In Manufacturing, 2013

For release 10:00 a.m. (EDT) Tuesday, July 28, 2015	    USDL-15-1483
Technical information:	(202) 691-5606 •  mfpweb@bls.gov  • www.bls.gov/mfp
Media contact:	        (202) 691-5902 •  PressOffice@bls.gov

(Note: This release was reissued February 16, 2016 due to an error in the 
labor composition estimates for manufacturing. All references to labor 
composition have been excluded for this re-issue of the release. 
In addition, measures for manufacturing sector, nondurable manufacturing 
sector, and industry multifactor productivity and manufacturing sector 
combined units of all inputs were affected by this error.)

		MULTIFACTOR PRODUCTIVITY TRENDS IN MANUFACTURING - 2013
Manufacturing sector multifactor productivity decreased at a 0.7 percent 
annual rate in 2013, the U.S. Bureau of Labor Statistics reported today. It
was the third consecutive decline in this measure. The 2013 decline reflected
a 1.5-percent increase in output and a 2.1-percent increase in combined 
inputs. (See table A and table 1.)

Multifactor productivity measures the change in output relative to the change 
in capital, labor, and intermediate inputs (energy, materials, 
purchased business services) used to produce that output. It is designed
to measure the joint influences of technological change, efficiency 
improvements, returns to scale, reallocation of resources, and other factors 
of economic growth, allowing for the effects of capital, labor, and 
intermediate inputs. Multifactor productivity annual measures differ from 
BLS quarterly labor productivity or output per hour measures because the 
former also include information on capital services and intermediate 
inputs. Additionally, much of the source data needed to construct 
multifactor productivity measures are not available on a quarterly basis.
Durable manufacturing sector multifactor productivity decreased 1.8 
percent in 2013, following a 0.8-percent decrease in 2012. Nondurable 
manufacturing sector multifactor productivity increased 0.4 percent 
in 2013, following a 0.8-percent decrease in 2012. (See table C and table 3.)

Historical trends in manufacturing

Multifactor productivity in manufacturing grew 1.2 percent annually
from 1987 to 2013 with sectoral output increasing at an annual rate
of 2.2 percent, faster than the 1.0-percent annual increase in combined
inputs. During the same period, labor productivity increased 3.5 percent
annually. (See table A.) Of the 3.5-percent growth rate in labor 
productivity, multifactor productivity contributed 1.2 percent, 
capital intensity contributed 0.8 percent, materials intensity added 
1.0 percent, and purchased business services intensity added 0.5 percent.
The contributions of energy intensity were unchanged. (See table B.)

For the 2007-2013 period, multifactor productivity declined at a 0.2 
percent annual rate compared to a 1.9-percent annual increase in the 
2000-2007 period. (See table A.) Sectoral output increased 0.1 percent
and combined inputs rose 0.3 percent over the 2007-2013 period.

In 2013, the number of NAICS three-digit manufacturing industries 
exhibiting an increase in multifactor productivity growth remained 
steady compared to 2012. In 2013, more manufacturing industries 
exhibited an increase in sectoral output growth compared to 2012. 
Fewer manufacturing industries had an increase in combined inputs 
compared to 2012. Nine out of 18 manufacturing industries exhibited 
an increase in multifactor productivity. Fourteen industries showed 
increasing sectoral output. Thirteen industries showed an increase 
in combined inputs. (See chart 2, table 3.) 

Revised measures

Previous and revised productivity measures and related data for 2011 
and 2012 for the manufacturing, durable manufacturing, and nondurable
manufacturing sectors are displayed in table C. In 2012, multifactor
productivity in the manufacturing sector decreased 0.8 percent compared 
to the previously reported 0.6-percent increase. Multifactor productivity
in the durable manufacturing sector decreased 0.8 percent compared to the
previously reported 1.4-percent increase. In the nondurable manufacturing
sector, multifactor productivity decreased 0.8 percent. Previously, 
multifactor productivity was reported as unchanged. In 2011, multifactor 
productivity measures in the manufacturing, durable manufacturing, and 
nondurable manufacturing sectors were also revised. The revisions in both 
years were due to the annual revision of the National Income and Product
Accounts (NIPA) released on January 30, 2015.

Table A. Compound annual growth rates for productivity, sectoral output, and  
inputs in the manufacturing sector for selected periods, 1987 to 2013

                                                                               
Percent                                                                        
                                                                               
                             1987-  1987-  1990-  1995-  2000-  2007-  2012-
                             2013   1990   1995   2000   2007   2013   2013 
                                                                               
  Productivity                                                                 
                                                                               
     Multifactor              1.2    0.4    1.3    2.1    1.9   -0.2   -0.7 
     productivity1                                                          
     Labor productivity2      3.5    1.9    3.2    4.9    4.6    2.3    0.7 
     Output per unit of      -0.1   -0.9    0.5    0.5    0.2   -1.2    0.5 
     capital services                                                       
                                                                               
                                                                                                                                                            
  Sectoral Output             2.2    1.8    3.2    4.7    1.5    0.1    1.5 
                                                                               
  Inputs                                                                       
                                                                               
     Combined Inputs3         1.0    1.4    1.9    2.6   -0.5    0.3    2.1 
     Hours4                  -1.3    0.0    0.0   -0.2   -3.0   -2.1    0.8 
     Capital Services         2.3    2.7    2.7    4.2    1.2    1.4    1.0 
     Energy                  -0.4    1.9    1.6    6.6   -3.9   -4.6   -0.1 
     Materials                2.2    0.1    3.1    5.2    1.0    1.4    2.5 
     Purchased business       1.4    5.4    3.2    1.4   -0.6    0.5    5.3 
     services                                                               
                                                                               
 1. Output per combined units of hours, capital services, energy, materials,   
   and purchased business services.                                            
 2. Output per hour worked.                                                    
 3. The growth rate of each input is weighted by its share of current dollar   
   costs.                                                                      
 4. Hours at work.                                                             
                                                                               
Table B. Compound annual growth rates in output per hour of all persons and   
contributions of capital intensity, intermediate inputs intensity, and
multifactor productivity in the manufacturing sector for selected periods,
1987 to 2013

                                                                               
 Percent                                                                       
                                                                               
                           1987-  1987-  1990-  1995-  2000-  2007-  2012-
                           2013   1990   1995   2000   2007   2013   2013 
  Manufacturing                                                                
                                                                               
  Labor productivity1       3.5    1.9    3.2    4.9    4.6    2.3    0.7 
                                                                          
                                                                          
  Contribution of           0.8    0.6    0.6    1.0    1.0    0.8    0.0 
  Capital Intensity2                                                      
                                                                          
                                                                          
       Information          0.1    0.1    0.1    0.2    0.1    0.0    0.0 
       processing                                                         
       equipment                                                          
       intensity3                                                         
                                                                          
                                                                          
       Research and         0.3    0.2    0.1    0.2    0.4    0.4    0.1 
       Development                                                        
       intensity4                                                         
                                                                          
                                                                          
       All Other            0.1    0.1    0.1    0.2    0.0    0.0    0.0 
       intellectual                                                       
       property products                                                  
       intensity5                                                         
                                                                          
                                                                          
       All other capital    0.3    0.2    0.2    0.3    0.5    0.4   -0.1 
       services intensity                                                 
                                                                          
                                                                          
  Contribution of           1.5    0.8    1.4    1.8    1.6    1.6    1.3 
  Intermediate Inputs                                                     
  Intensity6                                                              
                                                                          
                                                                          
       Energy intensity7    0.0    0.1    0.0    0.2    0.0   -0.1    0.0 
                                                                          
                                                                          
       Materials            1.0    0.0    0.8    1.3    1.2    1.3    0.7 
       intensity8                                                         
                                                                          
                                                                          
       Purchased business   0.5    0.8    0.5    0.3    0.4    0.4    0.6 
       services                                                           
       intensity9                                                         
                                                                          
                                                                          
  Multifactor               1.2    0.4    1.3    2.1    1.9   -0.2   -0.7 
  productivity10                                                          
                                                                          
                                                                          
                                                                               
 1-Output per hour worked.                                                     
 2-Capital intensity multiplied by capital's share of current dollar costs.    
 3-Information processing equipment per hour multiplied by its share of total  
   current dollar costs.                                                       
 4-Research and development per hour multiplied by its share of total          
   current dollar costs.                                                       
 5-Software and artistic originals per hout multiplied by its share of         
   total current dollar costs                                                  
 6-Intermediate inputs per hour multiplied by intermediate inputs' share of    
   current dollar costs                                                        
 7-Energy per hour multiplied by energy’s share of current dollar costs.       
 8-Materials per hour multiplied by materials’ share of current dollar costs.  
 9-Purchased business services per hour multiplied by purchased business'      
   services' share of current dollar costs.                                    
 10-Output per combined units of hours, capital services, energy, materials,   
   and purchased business services.                                            
                                                                               
Table C.  Previous and revised productivity and related measures for the      
2011-2012 and 2010-2011 periods                                          

                                                                               
                                       Inputs                                  
                                                                               
                          Multi-                                       Pur-    
                          factor Sec-  Com-         Capi-              chased  
                          pro-   toral bined        tal                busi-   
                          ducti- out-  in-          Ser-         Mate- ness    
  Sector                  vity1  put   puts2 Hours3 vices Energy rials services
                                                                               
Annual percent change,                                                         
2011-2012                                                                      
Manufacturing                                                                  
 Previous                   0.6    3.3   2.7   2.3    1.2   6.3    1.6   7.7   
 Revised                   -0.8    3.0   3.9   2.3    1.1  -0.4    5.8   6.3   
Durable manufacturing                                                          
 Previous                   1.4    6.0   4.6   2.9    1.0  14.2    5.5  10.7   
 Revised                   -0.8    5.9   6.8   3.1    1.0   4.5   12.2   9.6   
Nondurable manufacturing                                                       
 Previous                   0.0    1.3   1.2   1.3    1.4   2.0    0.3   4.3   
 Revised                   -0.8    0.7   1.5   0.9    1.2  -3.1    1.7   2.6   
                                                                               
Annual percent change,                                                         
2010-2011                                                                      
Manufacturing                                                                  
 Previous                  -0.5    2.9   3.4   2.1    1.0   6.5    7.0   1.1   
 Revised                   -1.4    7.8   9.3   2.2    1.1   8.6   23.5   1.4   
Durable manufacturing                                                          
 Previous                   1.9    6.2   4.2   3.8    0.4  -4.9   13.3   1.3   
 Revised                    0.9    8.9   7.9   3.9    0.5  -2.8   21.8   0.5   
Nondurable manufacturing                                                       
 Previous                  -2.3    0.3   2.7  -0.6    1.4  14.0    4.3   0.8   
 Revised                   -3.1    3.4   6.7  -0.4    1.5  16.3   11.9   2.4   
                                                                               
1. Output per combined units of hours, capital services, energy, materials,    
   and purchased business services.                                            
2. The growth rate of each input weighted by its share of current dollar cost
3. Hours at work.                                                              

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Last Modified Date: February 16, 2016
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