Productivity in industrial inorganic chemicals,(EXCERPT), Monthly Labor Review Online, Mar. 1988

Productivity in industrial inorganic chemicals

Horst Brand and Ziaul Z. Ahmed

As measured by output per hour, productivity in the inorganic chemicals industry remained virtually unchanged between 1972 and 1986.¹ By comparison, output per hour in manufacturing, as a whole, rose at an average annual rate of 2.7 percent over the period. Neither output of the industry nor employee hours changed significantly over the 1972-86 timespan — the long -term trends were essentially flat.

The absence of any long-term improvement in productivity did not characterize all of the industry's components. In the manufacture of alkalis (mostly caustic soda) and chlorine, productivity rose 3.2 percent a year, reflecting a decline in output and an even greater decline in employee hours. In the manufacture of inorganic pigments, productivity improved at an 0.9-percent annual rate; here, too, the long-term gain resulted from receding output and hours. In the largest group of inorganic chemical—productivity declined slightly, by 0.2 percent a year. Here, output rose, as did employee hours, if at a somewhat higher rate than output.

The inorganic chemicals industry converts certain nonfuel minerals and gaseous fluids found in the atmosphere into specifically formulated mixtures, generally used as intermediates in the production of final goods. One characteristic, particularly of large plants, is continuous processing, and relatively "very little direct labor (is) used" in the industry.²Value added per production worker has been roughly twice that for all manufacturing, and the ratio of fixed assets to employment has been 3 to 4 times as high, bespeaking the capital intensity of the industry.³

This excerpt is from an article published in the March 1988 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.

Read abstract Download full article in PDF (2,224K)

Footnotes

1    Industrial inorganic chemicals are classified as No.281 in the Standard Industrial Classification Manual of the Office of Management and Budget. SIC 281 is composed of four 4-digit industries— SIC 2812, Alkalies and Chlorine, consisting of establishments manufacturing these two chemicals and such other related chemicals as soda ash and caustic soda; SIC 2813, Industrial Gases, with establishments manufacturing such gases as acetylene, carbon dioxide, oxygen and others; SIC 2816, Inorganic Pigments, with establishments manufacturing pigments destined mostly for industrial paints, such as used for automobiles and household appliances; and SIC 2819, Industrial Inorganic Chemicals, not elsewhere classified, with establishments manufacturing a wide variety of bulk or commodity chemicals, such as acids, phosphates, potassiums, sulfurs, sodiums (salts), metallic compounds, and catalysts.
    SIC 2819 includes government-owned establishments; the output and employment of this part of the industry are excluded from the productivity and related measures offered here. The productivity and related measures for SIC 2813, Industrial Gases, are not published separately but are included in the measured for SIC 281.
    Average annual rates of change presented in this article are based on linear least squares of the logarithms of the index numbers. The indexes will be updated annually and will appear in the annual BLS Bulletin, Productivity Measures for Selected Industries.
2    R. Norris Shreve and Joseph A. Brink, Jr., Chemical Process Industries (New York, McGraw-Hill Book Co., 1977), ch.1.
3    Martin Neil Baily and Alok K. Chakrabarti. "Innovation and Productivity in U.S. Industry," Brookings Papers on Economic Activity, 2:1985, p.624.

Within Monthly Labor Review Online:
Welcome | Current Issue | Index | Subscribe | Archives

Exit Monthly Labor Review Online:
BLS Home | Publications & Research Papers