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May, 1988, Vol. 111, No. 5

Retail hardware stores register productivity gain

Patricia S. Wilder and Virginia L. Klarquist

Productivity, or output per hour of all persons, in the retail hardware store industry¹ rose at an average annual rate of 1.3 percent from 1972 to 1986. This increase was well above the 0.8 percent annual gain in productivity registered by the nonfarm business sector of the economy. The growth in productivity reflects an increase in output of 2.2 percent per year, and a rise in hours of 0.9 percent annually. Contributing to the growth in productivity were strong demand, an increased use of computers in store operations, and benefits derived from affiliation with dealer-owned cooperatives. The productivity trend for the 14-year period examined here was marked by much volatility. From 1972, annual increases in productivity occurred in 7 years, ranging from 0.2 percent to 14.5 percent. Declines in productivity also occurred in 7 years, the largest in 1981, when output per hour fell 3.7 percent. (See table 1.)

The retail hardware store industry is strongly affected by cyclical changes in the economy.  Expansions and contractions in output, and the associated changes in productivity are closely linked to changes in the housing market.  While increases or decreases in sales of new homes affect industry output, sales of previously occupied homes have an even greater impact.  In the sale of existing homes, hardware store purchases are boosted, both when the dwelling is prepared for sale and when it is redecorated by its new owner.²

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Footnote

1 Historical data are available upon request. Selected historical data appear in the Current Labor Statistics section of the Review.

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