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September 1983, Vol. 106, No. 9

Productivity growth in plastics
lower than all manufacturing

James D. York

Despite rapid output growth during 1972-81, productivity in the miscellaneous plastics products industry increased of a somewhat slower rate than that for all manufacturing. Productivity rose at an average annual rate of 1.4 percent over the period, while the rate for all manufacturing was 1.8 percent.1  The rapid rise in output, at an average annual rate of 5.5 percent, was accompanied by an increase in employee hours of 4 percent annually. (See table 1.) Industry productivity benefited from improvements in resins and faster processing equipment, and from the growing use of microprocessor controls for production machinery.

Productivity trends fluctuated during 1972-81, as output and hours responded to cyclical forces in the economy. The output of the plastics industry encompasses a wide range of products consumed in many sectors of the economy. Consequently, industry output tends to be strongly influenced by trends in the overall level of economic activity. A sharp downturn in the economy led sizable declines in the output of plastics products: 9.0 percent in 1974 and 12.5 percent in 1975. Reductions in employee hours lagged initially, with a decrease of only 1.1 percent in 1974. With output declining much more than hours in that year, productivity posted a 7.9-percent decrease. In 1975, however, the rate of decline in hours accelerated to 12.6 percent, virtually matching the decrease in output. With the changes in output and hours offsetting each other, productivity showed no change for that year.

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1 Average annual rates of change are based on the linear least squares trends of the logarithms of the index numbers. The miscellaneous plastics products industry is composed of establishments primarily engaged in molding primary plastics for the trade and fabricating miscellaneous plastics products industry is composed of establishments primarily engaged in molding primary plastics for the trade and fabricating miscellaneous finished plastics products. The industry is designated as SIC 3079 in the Standard Industrial Classification Manual, 1972 Edition, issued by the Office of Management and Budget. Extension of the indexes appears in the annual BLS Bulletin, Productivity Measures for Selected Industries.

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