Multifactor productivity trends for detailed industries, 2011


For release 10:00 a.m. (EDT) Wednesday, September 25, 2013	USDL-13-1941

Technical Information:	(202) 691-5618  •  dipsweb@bls.gov  •  www.bls.gov/mfp 
Media Contact:	        (202) 691-5902  •  PressOffice@bls.gov


MULTIFACTOR PRODUCTIVITY TRENDS FOR DETAILED INDUSTRIES, 2011

Multifactor productivity -- defined as output per unit of combined inputs -- increased in 55 of the 86 
four-digit NAICS manufacturing industries in 2011, the U.S. Bureau of Labor Statistics reported today. 
(See table 1.) This was down from 2010, when multifactor productivity increased in 63 of those 
industries. However, more industries recorded increases in multifactor productivity in both 2010 and 
2011 than in any year since 2004.

Three manufacturing industries recorded double-digit percent increases in multifactor productivity:  
semiconductors and electronic components, other transportation equipment, and electric lighting 
equipment.

Multifactor productivity is measured in two transportation industries. Multifactor productivity increased 
1.2 percent in air transportation and decreased 1.6 percent in line-haul railroads. 

Multifactor productivity indexes relate the change in real output to the change in the combined inputs of 
labor, capital, and intermediate purchases consumed in producing that output. Multifactor productivity 
growth measures the extent to which output growth has exceeded the growth in inputs, and reflects the 
joint influences on economic growth of a variety of factors that are not specifically accounted for on the 
input side, including technological change, returns to scale, enhancements in managerial and staff skills, 
changes in the organization of production, and other efficiency improvements.

Fewer 4-digit NAICS industries exhibited increases in output or combined inputs in 2011 compared to 
the previous year. Output increased in 54 manufacturing industries in 2011, compared to 60 in 2010.  
However, the number of industries where output increased and the number of industries where 
combined inputs increased were much higher in 2011 compared to 2009.

Double-digit percent increases in output occurred in 15 industries. Increases in output were particularly 
large in turbine and power transmission equipment; metalworking machinery; agriculture, construction, 
and mining machinery; railroad rolling stock; and audio and video equipment. Multifactor productivity 
rose in each of those industries. Output declined the most in computer and peripheral equipment and in 
apparel knitting mills.

For some manufacturing industries, multifactor productivity rose despite falling output, as combined 
inputs fell more rapidly. This occurred in 12 of the industries studied, including other transportation 
equipment, household appliances, cutlery and handtools, and printing and related support activities.

Combined inputs of capital, labor, and intermediate purchases rose in 47 manufacturing industries in 
2011, compared to 54 industries in 2010. Purchases of intermediate inputs rose in 48 industries, labor 
hours rose in 51, and capital services rose in 25 industries. Industries with the largest increases in 
combined inputs were motor vehicles; audio and video equipment; agriculture, construction and mining 
machinery; and turbine and power transmission equipment.

Of the 39 industries where combined inputs fell in 2011, multifactor productivity rose in 31. Within this 
group, the largest declines in combined inputs occurred in other transportation equipment and household 
appliances. In both industries, the declines in combined inputs were primarily caused by decreases in 
intermediate purchases.

Among the largest 4-digit NAICS manufacturing industries (those with employment over 200,000), 
multifactor productivity increased the most in semiconductors and electronic components in 2011, as 
output increased much more than inputs.

In the air transportation industry, output increased 1.9 percent and combined inputs grew 0.7 percent. In 
line-haul railroads output rose 3.8 percent and combined inputs increased 5.5 percent.

Year-to-year movements in industry multifactor productivity may reflect cyclical changes in the 
economy as well as long-term trends. Long-term average annual changes in multifactor productivity are, 
however, more reliable indicators of historical trends in industry performance.

Historical Trends

Between 1987 and 2011, multifactor productivity increased in 49 of 86 manufacturing industries, fewer 
than in 2011. (See table 2.) Average annual rates of change in multifactor productivity for most 
manufacturing industries ranged between -1.9 and 2.0 percent over the long term.

In contrast, in 2011 multifactor productivity growth rates varied much more among industries. More 
industries recorded large productivity increases in 2011 than over the long-term; 40 industries posted 
multifactor productivity gains of 2.1 percent or more in 2011.

Table 3 presents the average annual percent changes in multifactor productivity by industry from 1987 to 
2011 and for various subperiods. Multifactor productivity increased in more industries between 2009 
and 2011 than over any of the previous subperiods shown; the number of industries posting increases in 
multifactor productivity in the latest period contrasts sharply with the number during the 2007-2009 
period.

From 1987 to 2011 multifactor productivity rose for both transportation industries. Multifactor 
productivity in air transportation grew at an average annual rate of 1.3 percent during this period, as 
output increased more than combined inputs. In line-haul railroads, multifactor productivity increased at 
an average of 1.9 percent per year as output rose and combined inputs was little changed over the period.

The industries included in this release are classified according to the 2007 NAICS. While the rates of 
change reported by BLS in this news release are rounded to one decimal place, all industry productivity 
percent changes are calculated using index numbers rounded to three decimal places.

This news release incorporates 2011 data and revisions to 2010 data from the Annual Survey of 
Manufactures published by the Census Bureau. This news release also incorporates the annual benchmark 
revisions of the BLS Current Employment Statistics (CES) survey published in February, 2013. All of 
the measures for 2011 in this release are preliminary and subject to revision.

Measures for the air transportation industry in this news release include, for the first time, an improved 
labor input series which relies on employment and hours from the CES program and hours from the 
Current Population Survey (CPS) to supplement employment data from the Department of 
Transportation (DOT). In addition, the capital measures for some assets in this industry are now, for the 
first time, based on a more detailed breakdown of equipment and structures assets from the Bureau of 
Economic Analysis (BEA). These revisions affect the air transportation measures for the full period 
studied.

Industry multifactor productivity and related indexes and rates can be accessed by visiting the 
Multifactor Productivity and Costs website at http://www.bls.gov/mfp. Additional data are available 
upon request by calling the Division of Industry Productivity Studies at 202-691-5618 or by sending a 
request by e-mail to dipsweb@bls.gov. Information in this report will be made available to sensory-
impaired individuals upon request. Voice phone: 202-691-5618; TDD message referral phone number: 1-
800-877-8339.  

Customers can subscribe to the industry productivity program’s news releases on the BLS website at 
https://subscriptions.bls.gov/accounts/USDOLBLS/subscriber/new.

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Last Modified Date: September 25, 2013