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Chapter 11.
Industry Productivity Measures
Background
Studies of output per hour in
individual industries have been a part of the BLS program
since the 1800s. A study of 60 manufacturing industries,
prompted by congressional concern that human labor was
being displaced by machinery, was released as Hand and
Machine Labor in 1898. This report provided
striking evidence of the savings in labor resulting from
mechanization in the last half of the 19th century. The
effects of productivity advance upon employment remained
an important focus of BLS throughout the 1920s and 1930s.
Also during this period, the Bureau began the preparation
and publication of industry indexes of output per hour,
which were based on available production data from the
periodic Census of Manufactures and employment
statistics collected by BLS.
In 1940, Congress authorized the Bureau of Labor
Statistics to undertake continuing studies of
productivity and technological changes. The Bureau
extended earlier indexes of output per hour developed by
the National Research Project of the Works Progress
Administration, and published measures for selected
industries. This work, however, was reduced in volume
during World War II, owing to the lack of meaningful
production and employee hour data for many manufacturing
industries.
The advent of World War II also caused a change in the
emphasis of the program from problems of unemployment to
concern with the most efficient use of scarce labor
resources. BLS undertook a number of studies of labor
requirements for defense industries, such as synthetic
rubber and shipbuilding. After the war, the industry
studies program resumed on a regular basis, and was
supplemented by a number of industry studies based on the
direct collection of data from employers. Budget
restrictions after 1952 prevented the continuation of
direct collection of data. Consequently, the preparation
of industry measures is largely limited to those
industries where data are readily available.
In recent years, public interest in productivity has
grown, and increases in output per hour have been
recognized as important indicators of economic progress
and a means to higher income levels, rather than merely a
threat to job opportunities.
The industry studies cover a variety of manufacturing
and nonmanufacturing industries at the 2-, 3-, and
4-digit Standard Industrial Classification levels.
Measures for over 175 industries are published on an
annual basis and are provided for periods beginning as
early as 1947 and continuing through the most recent year
for which data are available. Coverage includes
industries in the manufacturing, mining, trade,
transportation, communication, public utilities, finance,
and business and personal services sectors.
In addition to measures of industry labor
productivity, BLS also publishes multifactor productivity
statistics for certain industries. Industry multifactor
productivity measures, which were first released in 1987,
relate output to the combined inputs of labor, capital,
and intermediate purchases. Multifactor productivity is
free of the effects of changes in the ratio of capital to
labor and the ratio of intermediate purchases to labor,
whereas labor productivity reflects these changes; hence,
multifactor productivity is preferred to labor
productivity as a measure of efficiency. However, because
of the enormous data requirements for the measurement of
capital and intermediate purchases, a limited number of
industry multifactor productivity measures has been
published.
Next: Labor
Productivity Measures
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Bureau of Labor Statistics
