Multifactor productivity in private nonfarm business

May 25, 2012

Private nonfarm business sector multifactor productivity increased at a 0.5-percent annual rate in 2011. This reflects a 2.4-percent increase in output, and a 1.9-percent increase in the combined inputs of capital and labor (its largest annual rate of growth since 2006).

Compound annual growth rates for multifactor productivity, output, and combined inputs in the private nonfarm business sector for selected periods, 1987–2011
[Chart data]

Multifactor productivity in the private nonfarm business sector grew 0.9 percent annually from 1987 to 2011. This was primarily due to output rising at a 2.8-percent annual rate, faster than the 1.9-percent increase in combined inputs.

For the 2007–2011 period, multifactor productivity grew 0.4 percent as combined inputs fell 0.5 percent, a larger decrease than the 0.1-percent decline in output.

The 2011 gains in output and combined inputs, 2.4 and 1.9 percent respectively, more closely resembled the long-term trend from 1987 to 2011 than during the 2007–2011 period.

These data are from the Multifactor Productivity program. To learn more, see “Preliminary Multifactor Productivity Trends – 2011,” news release USDL-12-0893 (HTML) (PDF). Multifactor productivity measures the change in output per unit of combined capital and labor input. It is designed to measure 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.

SUGGESTED CITATION

Bureau of Labor Statistics, U.S. Department of Labor, The Economics Daily, Multifactor productivity in private nonfarm business on the Internet at http://www.bls.gov/opub/ted/2012/ted_20120525.htm (visited July 23, 2016).

OF INTEREST

Recent editions of Spotlight on Statistics

  • A look at healthcare spending, employment, pay, benefits, and prices
    As one of the largest U.S. industries, healthcare is steadily growing to meet the needs of an increasing population with an increasing life expectancy. This Spotlight looks at how much people spend on healthcare, current and projected employment in the industry, employer-provided healthcare benefits, healthcare prices, and pay for workers in healthcare occupations.

  • Employment and Wages in Healthcare Occupations
    Healthcare occupations are a significant percentage of U.S. employment. Some of the largest and highest paying occupations are in healthcare. This Spotlight examines employment and wages for healthcare occupations.

  • Fifty years of looking at changes in peoples lives
    Longitudinal surveys help us understand long-term changes, such as how events that happened when a person was in high school affect labor market success as an adult.