Technical Notes



TECHNICAL NOTES 

The comparisons in this release are based on data available to the Bureau of Labor 
Statistics as of September 1 from national statistical offices of the countries compared. 
Below is a summary of the concepts used in this release. For more information on the 
methodology used in this release, see the detailed technical notes at 
www.bls.gov/ilc/#productivity. 

Labor productivity is defined as real output in national currency per hour worked. Unit 
labor costs are defined as the cost of labor input required to produce one unit of output, 
and are computed as compensation in nominal terms divided by real output. 

BLS constructs the trends in this release from three basic measures: output, total labor 
hours, and total compensation. In general, the output measures are real value added and 
total labor hours refer to hours worked by all employed persons. Total compensation 
includes employer expenditures for direct pay, employer social insurance expenditures, and 
labor-related taxes and subsidies. 

In general, the measures relate to total manufacturing as defined by the International 
Standard Industrial Classification (ISIC). Data for the United States and Canada are in 
accordance with the North American Industry Classification System (NAICS), except for 
compensation data for the United States before 1987. For most countries, the measures are 
prepared according to the United Nations System of National Accounts 1993 (SNA 93) for the 
most recent years. For earlier years, data were compiled according to other systems of 
national accounts. 

The U.S. manufacturing output series used in this release differs from the manufacturing 
output series that BLS publishes as part of its major sector productivity and costs 
measures for the United States.(1)  The International Labor Comparisons program uses a value 
added output concept, while the major sector series is on a sectoral output basis, which 
is gross output less intra-sector sales and transfers. Even though BLS has determined that 
sectoral output is the correct concept for U.S. measures of productivity, there are other 
considerations that make value added the better concept for international comparisons of 
labor productivity, such as differences among countries in the extent of vertical 
integration of industries and the availability of value added data. 
       	
The BLS measures are limited to trend comparisons. BLS does not prepare level comparisons 
of manufacturing productivity because of data limitations and technical problems in 
comparing the levels of manufacturing output among countries.

For more information on the methodology used in this release, see the detailed technical 
notes at www.bls.gov/ilc/#productivity.

1.  For more information about sectoral output, see www.bls.gov/lpc/.

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Last Modified Date: December 06, 2012