December 07, 2006 (The Editor’s Desk is updated each business day.)

Manufacturing multifactor productivity in 2002, 2003, and 2004

In the manufacturing sector, multifactor productivity grew just slightly faster in 2003 than in 2002, and fell in 2004.

[Chart data—TXT]

Multifactor productivity in manufacturing rose 3.9 percent in 2002. Until the slightly larger increase in 2003, this had been the largest rate of increase in the time series, which goes back to 1987. The multifactor productivity gain in 2002 reflected a decline in sectoral output and a decline in combined inputs.

Multifactor productivity in manufacturing grew at an annual rate of 4.0 percent in 2003. Combined inputs declined, but this decline was offset by an increase in sectoral output, the first increase in three years.

Multifactor productivity in manufacturing fell 1.0 percent in 2004, the steepest decline since 2001. The decline was the result of an increase in sectoral output that was more than offset by an increase in combined inputs.

These data are from the Multifactor Productivity program. Productivity data are subject to revision. To learn more, see "Multifactor Productivity Trends In Manufacturing, 2002, 2003 and 2004," news release USDL 06-2040. Multifactor productivity measures the joint influences of technological change, efficiency improvements, returns to scale, reallocation of resources, and other factors on economic growth, allowing for the effects of capital and labor.