Chapter 10.
Productivity Measures: Business Sector and Major
Subsectors
Description
of Measures BLS publishes three sets of productivity
measures for the major sectors and subsectors of the U.S.
economy, each using a distinct methodology. One measure
includes labor productivity for the major sectors of
business, nonfarm business, and nonfinancial corporations
and for the subsectors of total, durable, and nondurable
manufacturing. The second set includes multifactor
productivity for major sectors; and the third measures
multifactor productivity for total manufacturing and 20
2-digit Standard Industrial Classification manufacturing
industries. Each set of measures involves a comparison of
output and input measures.
The traditional measure of labor
productivityoutput per hourwas first
published in 1959, and represents the culmination of a
long series of developments in productivity measurement
in the Bureau.1
Output, measured net of price change and inter-industry
transactions2, is
compared to labor input, measured as hours at work in the
corresponding sector. These measures are prepared for the
business sector, the nonfarm business sector,
nonfinancial corporations, and manufacturing, along with
subsectors of durable and nondurable goods manufacturing.
These measures are available quarterly and are updated
and revised eight times a year.
The second set of measures covers multifactor
productivity for major U.S. sectors.3 In these measures, output is
again measured net of price changes and inter-industry
transactions, but the input measure is an aggregate of
hours at work and capital service flows. These measures
have been developed in recognition of the role capital
growth plays in output growth. They are updated annually.
Comparisons of output with a broader set of inputs
constitute the third set of measures.4 Because the scope of industries
within manufacturing is narrower than that of the nonfarm
business sector, output in manufacturing industries
includes shipments to both other producers and final
consumers.5
Consistent with such an output concept is an input
measure which includes intermediate inputs. Accordingly,
input includes labor and capital, and also energy,
nonenergy materials, and purchased business services.
These measures are available for a comprehensive set of
20 manufacturing industries (corresponding to the 2-digit
Standard Industrial Classification (SIC) level) as well
as for total manufacturing. As the focus narrows to more
specific industries, intermediate inputs take on an
increasingly important role in productivity measurement
and analysis. This set of measures consists of annual
data and is updated approximately every 2 years.
Footnotes 1 Trends in Output per Man-Hour in the Private
Economy, 1909-58, Bulletin 1249 (Bureau of Labor
Statistics, 1959). 2 The output measures represent deliveries of
final goods and services by the sector to domestic
households, investment, government and nonprofit
institutions, and net exports to other countries. These
measures are gross in the sense that neither capital
consumption allowances nor purchases of capital goods are
deducted, but they are net in the sense that
inter-industry transactions in intermediate materials and
services are excluded from output. These transactions are
excluded to avoid double counting. For example, the
output of the steel industry is excluded to the extent
that it is incorporated in final products such as
automobiles. 3 Trends in Multifactor Productivity, 1948-81,
Bulletin 2178 (Bureau of Labor Statistics, 1983). 4 These measures were first introduced in William
Gullickson and Michael J. Harper, "Multifactor
Productivity in 20 U.S. Manufacturing Industries,
1949-83," Monthly Labor Review, October 1987,
pp. 18-28. A similar measure for utility services
industries is in John L. Glaser, "Multifactor
Productivity in the Utility Services Industries," Monthly
Labor Review, May 1993, pp. 34-49. 5 In the more aggregate sectors, such as business
and nonfarm business, the delivery of goods to final
users closely corresponds to value added or gross product
originating (GPO). In less aggregate economic sectors,
such as manufacturing, where inter-industry transaction
represent a smaller proportion of goods and services
produced, deliveries include output which is not part of
final demand and more closely approximates a gross output
measure.
Next: Data
Sources and Estimating Procedures
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