Manufacturing prices, productivity, and labor costs in five economies (EXCERPT), Monthly Labor Review Online, July 1995

Manufacturing prices, productivity, and labor costs in five economies

Bart van Ark

O ver the past decade, there have been significant changes in the competitive performance of the world's main industrial nations. Following a massive restructuring in many industries, U.S. manufacturing has shown a strong recovery from the slowdown in output and productivity growth that occurred during the 1970's. For manufacturing as a whole, the United States has clearly maintained its position as a leader in terms of the level of productivity during the 1980's and early 1990's. Since the mid 1980's, the U.S. export volume of manufactured products also has increased rapidly and the Nation's current account position has improved.

During the 1970's and 1980's, the Japanese share of the world output increased sharply in several industries, and productivity levels in Japan rose rapidly, especially in investment good industries. However, the Japanese economy currently faces a need for major restructuring, following a slowdown in domestic demand and a continuous appreciation of the yen. At the same time, the Japanese domestic market continues to be strongly protected against the potential exports of other nations.

The competitive performance of European countries has been diverse. During the 1980's, Germany¹ lost some of its edge in several manufacturing industries. Compared to Germany, France and the United Kingdom experienced a faster rise in productivity and a slower increase in labor cost. German manufactured exports have also grown more slowly than those of France and the United Kingdom since the mid-1980's.

This excerpt is from an article published in the July 1995 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 Throughout this article "Germany" refers to the former Federal Republic of Germany.

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