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James D. York
Over the period from 1982 to 1994, labor productivity in the fabricated plate work industry—which manufactures boilers, tanks, and similar products—increased at an average annual rate of 1.8 percent.1 Although output actually declined by 0.1 percent per year over the period, employee hours declined more rapidly, at a rate of 1.8 percent per year. The more rapid decline in hours than in output was largely due to technological improvements in the industry.
Productivity and output. Because this industry produces a wide variety of products—including fabricated steel plate, heat exchangers and steam condensers, boilers, gas cylinders, and metal tanks—there are many different types of customers for its products. Metal storage tanks, for example, are used in such diverse industries as chemical processing, water and sewage treatment, and petroleum processing and storage, and for transporting products such as chemicals. Boilers have both residential and commercial applications, providing heat and hot water for homes, businesses, and other establishments; they also provide steam for various industrial processes, including cooking, cleaning, and heating.
With such an assorted mix of customers, output in the fabricated plate work industry does not necessarily follow the business cycle. The needs for boilers, for example, may deviate from trends in the overall national economy. Similarly, the demand for storage tanks among commercial customers for such uses as chemical processing may increase after a busy period, rather than during one. And this is reflected in the industry output trends. For example, although the 1982-86 period was one of robust economic expansion, industry output actually declined over the period by 7.5 percent per year. Then, in 1987, industry output increased substantially, rising 13.1 percent in a single year.
This excerpt is from an article published in the May 1997 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.
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Footnotes
1 The fabricated plate work industry (SIC 3443) includes
establishments primarily involved in the production of power and
marine boilers, pressure and nonpressure tanks, processing and
storage vessels, heat exchangers, weldments, and similar products
through the process of cutting, forming, and joining metal
plates, shapes, bars, sheet, and other metal inputs to custom or
standard design, for factory or field assembly. Labor
productivity is measured by output per hours. All average annual
rates of change are based on the compound growth method of
computation. For more technical information on BLS productivity
measures, see BLS Handbook of Methods, Bulletin 2490
(Bureau of Labor Statistics, 1997), ch. 11, "Industry
Productivity Measures," pp. 103-9.
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