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October 1992, Vol. 115, No.
10
Productivity in the nuts and bolts industry, 1958-90
Ziaul Z. Ahmed and Mark Sieling
Output per employee hour in the bolts, nuts, screws, rivets, and washers industry increased at an average annual rate of 0.9 percent between 1958 and 1990, according to a new Bureau of Labor Statistics industry labor productivity measure.1 Output increased by 1.5 percent a year over this period, while employee hours inched up at the rate of 0.6 percent annually.
The relatively low annual average increase in labor productivity for the industry over the period, however, masks a pattern of accelerating productivity growth. As table 1 shows, the annual rate of productivity growth was 0.5 percent between 1958 and 1973, 1.0 percent between 1973 and 1979, and 1.4 percent between 1979 and 1990.
During the 1958-79 period, annual changes in industry output were often matched by changes in employee hours. From the late 1970's through the early 1980's, however, both industry employment and employee hours declined faster than industry output declined, resulting in productivity increases. Faced with ebbing demand for domestically produced bolts and nuts caused primarily by growing competition from imports, many establishments—especially those employing 500 workers or more—shuttered their gates.
During the 1983-90 period, industry output increased at a 3.0-percent annual rate, primarily reflecting large gains in the output of small-sized establishments. Employee hours, however, increased by only 1.9 percent per year. Much of this improvement in output per employee hour stemmed from the growing use of more versatile and higher capacity boltforming machinery, improvements in machine durability, advances in bolt and nut design, and shifts in production processes.
Because demand for the industry's products is closely tied to activity in durable goods-manufacturing industries, year-to-year changes in output and employee hours tended to reflect general economic conditions. During the 1981-82 recession, for example, the industry's output declined by about 25 percent, while employee hours fell by almost 22 percent.2
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Footnotes
1 The bolts, nuts, screws, rivets, and washers industry
is designated as SIC 3452 by the 1987 Standard Industrial
Classification Manual of the Office of Management and Budget.
The industry consists of establishments engaged primarily in
manufacturing standard bolts, nuts, screws, rivets, and washers,
formed and threaded wire goods, and special industrial fasteners
typically made in very high volumes and used for multiple
purposes. Establishments manufacturing fasteners primarily on a
custom or job order basis are classified in SIC 3451, screw
machine products. In 1990, the bolts, nuts, screws, rivets, and
washers industry employed about 51,500 workers; in the same year,
all-manufacturing employment totaled 19,111,000.
Average annual rates of change are based on compound rates of change between pairs of index numbers. Extensions of the indexes will appear in the annual Bureau Of Labor Statistics bulletin, Productivity Measures for Selected Industries.
2 All economic cycles mentioned in this article are those defined by the National Bureau of Economic Research, Inc.
Productivity in the wood containers industries, 1977-89. October 1992.
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