International comparisons of labor productivity and unit labor costs in manufacturing, 2000 U.S. Department of Labor Bureau of Labor Statistics April 2002 Report 962 In 2000, U.S. manufacturing output per hour grew by 5.5 percent over the preceding year, the fifth largest increase among the 13 countries for which comparable data are available-the United States, Canada, Japan, Korea, Taiwan, and 8 European countries. Manufacturing labor productivity grew in all of the countries; increases ranged from 1.1 percent in Norway to 10.7 percent in Korea. (See table A and chart 1.) The U.S. productivity measure posted its second highest growth rate since 1995. (Average annual growth rates for selected measures, years, and periods are found in tables A and B.) U.S. manufacturing unit labor costs increased by 1.4 percent in 2000, the largest annual increase since 1993. This is the second time that U.S. unit labor costs have increased since that year. Only 2 of the 14 countries for which comparable data are available, Canada and Norway, had larger increases in unit labor costs expressed in national currency units. Unit labor costs in the Netherlands also increased by 1.4 percent. In all the other countries, manufacturing unit labor costs in national currency units declined in 2000. In U.S. dollars, unit labor costs in 2000 fell in all of the other countries except Canada and Korea. (See table A and chart 2.) This report examines comparative trends in manufacturing output per hour, unit labor costs, and related measures in 2000, the most recent year for which comparative data are available. Annual indexes of these variables also are estimated for the period 1950-2000. 1/ The complete historical index series for PRINTED COPY CONTAINS CHART AT THIS POINT: Chart 1. Percent change in manufacturing output per hour in 13 countries or areas, 2000 Table A. Changes in manufacturing productivity and unit labor costs in 14 countries or areas, 1999-2000 [In percent] Output Total Hourly Unit labor costs per Employ- Average compen- compen- National U.S. Exchange Country or area hour Output Hours ment hours sation sation currency dollar rate 1/ United States 5.5 4.1 - 1.4 - 0.6 - 0.8 5.5 7.0 1.4 1.4 --- Canada 1.2 5.7 4.4 4.4 .0 8.0 3.5 2.2 2.2 0.0 Japan 5.7 5.5 -.1 -1.7 1.6 -.8 -.6 -6.0 -.8 5.5 Korea 10.7 15.4 4.2 5.5 -1.2 10.8 6.3 -4.0 1.0 5.2 Taiwan 5.3 7.3 1.9 2.1 -.2 3.5 1.6 -3.5 -.3 3.4 Belgium 3.0 3.6 .6 .3 .3 3.0 2.3 -.6 -13.9 -13.3 Denmark NA 5.0 NA -.7 NA 3.3 NA -1.7 -15.1 -13.7 France 6.2 3.3 -2.7 .7 -3.4 3.0 5.9 -.3 -13.6 -13.3 Germany 6.2 6.1 -.1 .7 -.9 3.1 3.2 -2.8 -15.8 -13.3 Italy 3.8 3.4 -.4 -.2 -.2 2.8 3.2 -.5 -13.8 -13.3 Netherlands 4.1 4.7 .6 .7 -.1 6.2 5.6 1.4 -12.1 -13.3 Norway 1.1 -2.7 -3.8 -2.7 -1.1 1.1 5.0 3.9 -8.0 -11.4 Sweden 4.8 6.3 1.5 1.3 .2 4.1 2.6 -2.1 -11.7 - 9.8 United Kingdom 5.4 1.9 -3.3 -3.6 .4 .5 3.9 -1.4 -7.6 - 6.3 NA = not available. 1/ Value of foreign currency relative to the U.S. dollar. the variables underlying the Bureau of Labor Statistics (BLS) international comparisons are shown in tables 1 through 15. With this report, comparative hours measures and labor productivity estimates for Korea and Taiwan are being released by BLS for the first time. The data presented here update preliminary estimates for 2000 that were released on August 31, 2001; a summary of revisions is contained in table 16. The historical series of the variables also are available at the BLS Division of Foreign Labor Statistics Web site at: http://stats.bls.gov/fls/home.htm. Comparative growth, 1999-2000 Output per hour. Labor productivity (output per hour worked) in U.S. manufacturing grew 5.5 percent in 2000. The productivity increase resulted from output growth of 4.1 percent combined with a 1.4-percent decrease in labor input (as measured by total hours).2/ Productivity gains in five other countries-Japan, France, Germany, Italy, and the United Kingdom-were achieved by a similar combination of an increase in output accompanied by a decline in hours worked. Norway experienced a gain in productivity even though output decreased, because hours worked declined at a faster rate than did output. In all other countries for which comparable data are available, productivity gains were realized due to a larger increase in output than in hours worked. (See table A and chart 1.) The 4.1-percent increase in output placed the United States behind 8 of the 14 economies compared. The largest increases in output were in Korea (15.4 percent) and Taiwan (7.3 percent). In Europe, Sweden (6.3 percent) and Germany (6.1 percent) achieved the largest output increases in 2000. Only Norway experienced a decline in manufacturing output for the year. Of the 13 countries for which data on total hours worked are available, hours worked declined in 7 (the United States, Japan, France, Germany, Italy, Norway, and the United Kingdom) and increased in the remaining six. The increase in Canadian total hours worked, 4.4 percent, was the highest among the countries. Average hours worked in 2000 declined in eight countries, rose in four, and remained unchanged in Canada. The 1.4-percent decline in total hours worked in the United States was the result of declines both in employment (0.6 percent) and in average hours worked (0.8 percent). The decreases in total hours worked in Italy and Norway also were caused by declines in both employment and average hours worked. In Belgium and Sweden, the increase in total hours worked was composed of increases in both employment and average hours. In all other countries, growth in employment was offset by declines in average hours, or growth in average hours was offset by declines in employment. Unit labor costs and hourly compensation. U.S. manufacturing hourly compensation increased 7 percent in 2000, the highest rate of growth among the countries compared. The next three largest increases in hourly compensation were in Korea (6.3 percent), France (5.9 percent), and the Netherlands (5.6 percent). Only Japan experienced a decline in hourly compensation in 2000. (See table A.) Unit labor costs (labor compensation per unit of output), expressed in national currency units, declined in 10 of the 14 countries in 2000. The largest declines occurred in Japan (6.0 percent), Korea (4.0 percent), and Taiwan (3.5 percent). The United States, Canada, the Netherlands, and Norway experienced PRINTED COPY CONTAINS CHART AT THIS POINT: Chart 2. Percent change in manufacturing unit labor costs in 14 countries or areas, 1999-2000 increases in unit labor costs. (See table A and chart 2.) The measure of unit labor costs is equivalent to compensation per hour divided by output per hour. In the United States, Korea, France, and the Netherlands, the relatively large increases in hourly compensation were offset by increases in output per hour, resulting in only modest increases or declines in unit labor costs. Norway's increase in unit labor costs (3.9 percent) was the largest among the countries for which data are compared, because hourly compensation increases were only modestly offset by productivity growth. To compare changes in competitiveness across economies in terms of U.S. dollars, unit labor costs in national currency units must be adjusted for changes in the currencies' exchange rates against the dollar. When a foreign currency depreciates against the U.S. dollar, fewer dollars must be paid in exchange for each national currency unit. This will lead to a smaller increase or a larger decline in unit labor costs converted from the foreign currency into U.S. dollars. Movements in the currency markets in 2000 had a noticeable impact on comparative unit labor costs expressed in U.S. dollars. The European countries showed sharp decreases in unit labor costs expressed in U.S. dollars that were due largely to the relative strength of the dollar against European currencies in 2000. For the Euro member countries (Belgium, France, Germany, Italy, and the Netherlands), as well as Denmark and Sweden, the declines all were over 10 percent. Unlike Europe, Japan and Taiwan experienced decreases in unit labor costs expressed in U.S. dollars in 2000 that were smaller than decreases in unit labor costs denominated in national currency units; in Korea, dollar-denominated unit labor costs actually rose. For each of the three Asian countries, unit labor cost movements reflected a strengthening of the national currencies against the U.S. dollar. (See table A and chart 2.) Trade-weighted unit labor costs To take account of differences in the relative importance of foreign economies to U.S. trade in manufactured goods, BLS constructs indexes of U.S. unit labor cost trends relative to a trade-weighted average of unit labor cost trends in the other economies. These measures are shown in chart 3. (Note that the earliest data in the chart relate to 1979 because U.S. manufacturing output reached a peak during that year, declining in 1980.) The construction of the trade-weighted indexes is a three-step process. First, the indexes of unit labor costs for all economies are rebased to a common year (in this case, 1979 = 100). Second, for each year, a "competitors" index is calculated as the weighted geometric mean of the indexes for all competitor economies; the weights reflect each country's importance in terms of U.S. trade in manufactured goods. Finally, the U.S. index number for each year is divided by the "competitors" index number (and multiplied by 100) to obtain a relative ratio of the United States to the competitors. This process is used to calculate the relative trade-weighted unit labor cost indexes on both a national currency and a U.S. dollar basis. In this report, the relative U.S. trade- PRINTED COPY CONTAINS CHART AT THIS POINT: Chart 3. U.S. manufacturing unit labor costs relative to those of 12 competitors, 1979-2000 weighted indexes are estimated against 12 economies for which comparable data are available over the 1979-2000 period; the indexes underlying this chart are shown in table C. In chart 3, the solid line indicates that U.S. unit labor costs rose faster than "competitors" costs from 1979 to 1986 on a U.S. dollar basis. In most years from 1986 to 1995, U.S. costs either rose at a slower rate than the "competitors" costs or fell at a faster rate. From 1996 to 1998, however, the strength of the U.S. dollar caused relative U.S. unit labor costs to rise. After a dip in 1999, the index of relative U.S. unit labor costs rose again in 2000. Measuring productivity and unit labor cost trends in manufacturing Labor productivity is defined as real output per hour worked. Although the labor productivity measure presented in the report relates output to the hours worked of persons employed in manufacturing, it does not measure the specific contributions of labor as a single factor of production. Rather, it reflects the joint effects of many influences, including new technology, capital investment, capacity utilization, energy use, and managerial skills, as well as the skills and efforts of the workforce. Unit labor costs are defined as the cost of labor input required to produce one unit of output. They are computed as labor compensation in nominal terms divided by real output. BLS constructs trend indexes of manufacturing labor productivity, hourly compensation costs, and unit labor costs from three basic aggregate measures- output, total labor hours, and total compensation. The hours and compensation measures refer to employees (wage and salary earners) in Belgium, Denmark, Italy, and Taiwan. For all other countries, the measures refer to all employed persons, including employees, self-employed persons, and unpaid family workers. For all of the countries, the term "hours" refers to hours worked, and not to hours paid. In general, the measures relate to total manufacturing as defined by the International Standard Industrial Classification (ISIC). However, the measures for Denmark include mining and exclude the manufacture of handicrafts from 1960 to 1966. The comparisons in this report make use of data made available to BLS as of November 2001 by the statistical agencies of the individual countries. For some countries, the data for the most recent years are based on the European System of Integrated National Accounts (ESA 95) or on the United Nations System of National Accounts 1993 (SNA 93). For other countries, data were compiled according to previously used systems. To obtain historical time series, BLS may link together data series that were compiled according to different accounting systems by the countries' statistical agencies. Output. For most countries, the output measures are value added in manufacturing from the national accounts. However, output for Japan prior to 1970 and for the Netherlands prior to 1960 are indexes of industrial production. The manufacturing value added measures for the United Kingdom are essentially identical to that country's indexes of industrial production. In this report, manufacturing output data for the United States from 1977 forward are the gross product originating (value added) measures prepared by the Bureau of Economic Analysis (BEA) of the U.S. Department of Commerce. U. S. gross product originating is a chain-type annual-weighted series.3/ Comparable manufacturing output data are not available prior to 1977. The gross product originating series differs from the manufacturing output series that BLS publishes as one of its quarterly measures of U.S. productivity and costs. The quarterly measures are on a sectoral output basis rather than a value added basis. Sectoral output is gross output less intrasector sales and transfers.4/ A value added concept has been used for the international comparisons series because the data are more readily available from the countries' national accounts, whereas sectoral output would require a complex estimation procedure. Also, although BLS has determined that sectoral output is the correct concept for U.S. measures of single factor productivity (output per hour), there are other considerations that may make value added a better concept for international comparisons, such as differences among countries in the extent of vertical integration of industries. Estimation of manufacturing real output using moving price weights is becoming prevalent. For example, the output measure for manufacturing in the United States is the chain-weighted index of real gross product originating, based on annually changing price weights. However, real output for many earlier periods within the historical real output series has been estimated using fixed price weights, with the weights updated periodically (for example, every 5 or 10 years). Measures of real output also may differ among countries because of differences in approaches to estimating the prices of high-technology products such as computers and, in general, of products that undergo rapid quality change. Labor input. The aggregate hours worked series used for France (from 1970 forward), Norway, Sweden, and Canada are series published with the national accounts. For the former West Germany after 1959 and Germany from 1991, BLS uses estimates of aggregate hours worked, which were developed by a research institute of the German Ministry of Labor for use with the national accounts employment figures. For the United Kingdom from 1992, an index of total manufacturing hours is used, derived from published quarterly indexes of manufacturing hours. For other countries and for the United Kingdom before 1992 and the former West Germany before 1959, BLS constructs its own estimates of average hours, using employment figures published with the national accounts, or other comprehensive employment series, and estimates of average annual hours worked. For this report, Italian employment is based on a new series of the number of employees in manufacturing, instead of on labor units, as in previous releases. The new estimates of total hours worked in the manufacturing sector in Korea from 1985 to 2000 are based on an employed persons series and an average annual hours worked series. The data are prepared by the Korean Productivity Center (KPC) according to the System of National Accounts 1993 (SNA 93). The resulting hours worked series is the same as that used by the KPC to calculate manufacturing productivity. The KPC publishes the employed persons series, the average hours series, and the aggregate hours series as indexes in the Korean Quarterly Productivity Review. The new estimates of aggregate hours worked in the manufacturing sector in Taiwan from 1973 to 2000 are based on the number of employees and average annual hours worked data from the monthly "Employees' Earnings Survey" conducted by the Taiwan Directorate General of Budget Accounting and Statistics (DGBAS). The survey covers all establishments with two or more employees in the entire territory of Taiwan. The results are published in the Taiwan Yearbook of Earnings and Productivity Statistics. Compensation (labor cost). The compensation measures are from national accounts data. Compensation includes employer expenditures for legally required insurance programs and contractual and private benefit plans, in addition to all payments made in cash or in kind directly to employees. For Canada, France, and Sweden, compensation is increased to account for important taxes on payroll or employment. For the United Kingdom, compensation is reduced between 1967 and 1991 to account for subsidies. When data for the self-employed are not available, total compensation is estimated by assuming the same hourly compensation for self-employed and employees; in this report, this procedure is used for the first time to adjust Korean manufacturing compensation to an all- persons basis. Real compensation for the United States is derived using the Consumer Price Index research series (CPI-U-RS). Data for Germany. After the reunification of Germany in 1991, the German Federal Statistical Office began to publish economic statistical series for the unified German territory, while continuing temporarily to produce data for the territory of former West Germany. Beginning with the data estimates for 1999 (released in October 2000), the international comparisons of manufacturing productivity and unit labor costs produced by BLS have included separate series for unified Germany and for the former West Germany. The West German estimates end with 1998, the last year for which the German Statistical Office has published the necessary underlying data. Current indicators. The measures for recent years may be based on current indicators of output (such as industrial production indexes), employment, average hours, and hourly compensation until national accounts and other statistics, normally used for the long-term measures, become available. Trade-weighted measures. The trade weights for Canada, Japan, and the European countries were obtained by rescaling a series of weights, developed by the International Monetary Fund, based on average trade flows over the 1989-91 period. These weights are based on aggregate trade data for total manufacturing and take account of both bilateral trade and the relative importance of "third country" markets. The 1989-91 weights do not include Korea and Taiwan. BLS developed weights for Korea and Taiwan by using data from an earlier study from the International Monetary Fund and other sources. The weight used for Germany is based on the trade weight of the former West Germany. The following weights were used for the entire period for which trade-weighted unit labor cost measures are produced: Country Weight Country Weight Canada 25.31 Italy 4.60 Japan 30.57 Netherlands 2.25 Belgium 2.14 Norway .48 Denmark .48 Sweden 1.89 France 5.90 United Kingdom 8.99 Germany 11.61 Taiwan 5.79 Level comparisons. BLS measures are limited to trend comparisons. BLS does not prepare level comparisons of manufacturing productivity and unit labor costs because of data limitations and technical problems in comparing the levels of manufacturing output among countries. Each country measures manufacturing output in its own currency units. To compare outputs among countries, a common unit of measure is needed. Market exchange rates are not suitable as a basis for comparing output levels. What is needed are purchasing power parities, which are the number of foreign currency units required to buy goods and services equivalent to those that can be bought with one unit of U.S. currency. Purchasing power parities are available for total gross domestic product (GDP) from the Organization for Economic Cooperation and Development. However, these parities are derived for expenditures made by consumers, business, and government for goods and services-not for value added by industry. Therefore, they do not yield purchasing power parities by industry. The parities developed for total GDP are not suitable for component industries, such as manufacturing. European exchange rates. On January 1, 1999, 11 European countries joined the European Monetary Union (EMU). Greece joined on January 1, 2001. Currencies of EMU members are established at fixed conversion rates to the euro, the official currency of the EMU. Exchange rates between the national currencies of EMU countries and the U.S. dollar are no longer reported; only the exchange rate between the euro and the U.S. dollar is available. In this report, 2000 exchange rates in national currencies for Belgium, France, Germany, Italy, and the Netherlands are calculated by determining the number of euros per U.S. dollar and then converting the euros into national currencies at fixed conversion rates. 1 euro equals: 40.3399 Belgian francs 1936.27 Italian lire 6.55957 French franc 2.20371 Netherlands 1.95583 German marks guilders In 2000, 1 euro was equal to 0.9232 U.S. dollars. The currency exchange rates cited in this publication are annual averages of daily buying rates in New York City. 1/ Because the value added output data for U.S. manufacturing industries are not available prior to 1977, U.S. measures of output, output per hour, and unit labor costs begin with 1977. Also, productivity measures for Denmark are not available after 1993 due to a lack of comparable hours data, and data for Germany for years prior to 1991 relate to the former West Germany. 2/ In this report, U.S. manufacturing output is real gross product originating in manufacturing, published by BEA in November 2001. The preliminary 2000 growth estimate for U.S. manufacturing output (published in the news release USDL 01-280 in August 2001) was based on the Federal Reserve Board Index of Industrial Production for Manufacturing. 3/ For more information on the U.S. measure, see Sherlene K.S. Lum, Brian C. Moyer, and Robert E. Yuskavage, "Improved Estimates of Gross Product by Industry for 1947-98," Survey of Current Business, June 2000, pp. 24-38. 4/ For information on sectoral output, see William Gullickson, "Measurement of productivity growth in U.S. manufacturing," Monthly Labor Review, July 1995, pp. 13-28. Table B. Changes in output per hour, hourly compensation, unit labor costs, and related measures for manufacturing, 14 countries or areas, 1979-2000 [Average annual rates of change 1/] Country or area 1979-2000 1979-85 1985-90 1990-95 1995-2000 1999-2000 Output per hour United States 3.4 3.5 2.4 3.3 4.6 5.5 Canada 2.1 3.4 .5 3.3 .9 1.2 Japan 3.7 3.5 4.3 3.3 3.9 5.7 Korea NA NA 8.2 9.7 11.6 10.7 Taiwan 5.9 5.1 7.9 5.3 5.5 5.3 Belgium 3.8 6.0 2.2 3.2 3.3 3.0 Denmark NA 2.1 .5 NA NA NA France 3.7 3.0 3.4 4.1 4.2 6.2 Germany NA NA NA NA 2.6 6.2 Italy 2.7 3.5 2.4 3.5 1.1 3.8 Netherlands 3.3 4.4 2.2 3.7 2.5 4.1 Norway 1.4 2.4 1.4 1.1 .4 1.1 Sweden 3.6 3.1 1.9 5.2 4.3 4.8 United Kingdom 3.7 4.4 4.6 3.3 2.3 5.4 Output United States 3.0 2.2 2.5 3.1 4.4 4.1 Canada 2.6 1.9 1.8 2.0 4.7 5.7 Japan 3.0 4.7 4.8 .4 1.7 5.5 Korea 9.2 8.3 12.2 8.4 8.0 15.4 Taiwan 6.6 8.2 7.0 5.0 5.7 7.3 Belgium 2.3 2.6 2.5 .6 3.3 3.6 Denmark 1.8 2.9 -.2 2.2 1.9 5.0 France 1.5 -.4 2.6 1.1 2.9 3.3 Germany NA NA NA NA 1.3 6.1 Italy 1.7 .9 3.2 1.5 1.2 3.4 Netherlands 2.3 1.8 3.2 1.6 2.7 4.7 Norway .3 .6 -1.6 1.7 .4 -2.7 Sweden 2.9 2.2 1.4 3.1 4.9 6.3 United Kingdom .8 -1.2 3.4 .5 1.0 1.9 Continued on next page. Table B. Changes in output per hour, hourly compensation, unit labor costs, and related measures for manufacturing, 14 countries or areas, 1979-2000--Continued [Average annual rates of change 1/] Country or area 1979-2000 1979-85 1985-90 1990-95 1995-2000 1999-2000 Total hours United States -0.4 -1.2 0.0 -0.1 -0.2 -1.4 Canada .5 -1.5 1.3 -1.3 3.8 4.4 Japan -.7 1.1 .5 -2.8 -2.1 -.1 Korea NA NA 3.7 -1.2 -3.2 4.2 Taiwan .6 2.9 -.8 -.3 .2 1.9 Belgium -1.4 -3.2 .4 -2.5 -.1 .6 Denmark NA .8 -.6 NA NA NA France -2.1 -3.3 -.8 -2.9 -1.3 -2.7 Germany NA NA NA NA -1.3 -.1 Italy -1.0 -2.5 .8 -1.9 .1 -.4 Netherlands -.9 -2.5 1.0 -2.0 .2 .6 Norway -1.1 -1.8 -2.9 .6 -.1 -3.8 Sweden -.7 -.8 -.5 -2.0 .6 1.5 United Kingdom -2.8 -5.3 -1.2 -2.8 -1.3 -3.3 Employment United States -0.6 -1.4 -0.1 -0.6 -0.1 -0.6 Canada .3 -1.3 1.2 -1.5 3.4 4.4 Japan -.3 1.2 .8 -1.6 -1.9 -1.7 Korea NA NA 5.4 -.9 -3.1 5.5 Taiwan 1.1 4.1 -.5 -.3 .5 2.1 Belgium -1.5 -2.6 -.3 -2.2 -.6 .3 Denmark -.2 1.0 -.2 -1.2 -.5 -.7 France -1.6 -2.3 -.9 -2.7 -.4 .7 Germany NA NA NA NA -.8 .7 Italy -1.1 -2.3 -.2 -1.8 .3 -.2 Netherlands -.8 -2.2 1.2 -2.0 .4 .7 Norway -1.0 -1.8 -2.7 .3 .3 -2.7 Sweden -1.3 -1.2 -.8 -3.5 .4 1.3 United Kingdom -2.5 -4.6 -.9 -3.1 -1.1 -3.6 Continued on next page. Table B. Changes in output per hour, hourly compensation, unit labor costs, and related measures for manufacturing, 14 countries or areas, 1979-2000--Continued [Average annual rates of change 1/] Country or area 1979-2000 1979-85 1985-90 1990-95 1995-2000 1999-2000 Average hours United States 0.2 0.2 0.1 0.4 -0.1 -0.8 Canada .1 -.2 .1 .3 .4 .0 Japan -.4 .0 -.3 -1.3 -.1 1.6 Korea NA NA -1.6 -.2 -.1 -1.2 Taiwan -.5 -1.1 -.4 .0 -.3 -.2 Belgium .0 -.6 .7 -.3 .6 .3 Denmark NA -.3 -.5 NA NA NA France -.5 -1.0 .1 -.2 -.9 -3.4 Germany NA NA NA NA -.5 -.9 Italy .1 -.1 1.0 -.1 -.2 -.2 Netherlands -.2 -.3 -.2 .0 -.2 -.1 Norway -.1 .0 -.2 .3 -.3 -1.1 Sweden .6 .4 .3 1.6 .2 .2 United Kingdom -.3 -.8 -.3 .3 -.2 .4 Total labor compensation in manufacturing 2/: national currency basis United States 4.3 5.8 3.9 3.4 3.7 5.5 Canada 5.4 7.5 5.6 2.4 5.8 8.0 Japan 2.8 5.9 5.1 .7 -1.0 -.8 Korea NA NA 19.9 16.8 3.8 10.8 Taiwan 9.6 15.9 10.6 6.8 4.2 3.5 Belgium 3.1 4.7 4.0 1.3 2.0 3.0 Denmark 4.9 9.0 4.6 2.3 3.2 3.3 France 4.0 9.1 3.6 .7 1.7 3.0 Germany NA NA NA NA 1.2 3.1 Italy 7.3 13.0 8.2 4.0 3.2 2.8 Netherlands 2.7 2.3 3.1 1.9 3.6 6.2 Norway 5.5 8.0 4.7 4.0 5.0 1.1 Sweden 6.0 8.9 7.9 1.9 4.8 4.1 United Kingdom 5.1 6.3 8.1 2.5 3.2 .5 Continued on next page. Table B. Changes in output per hour, hourly compensation, unit labor costs, and related measures for manufacturing, 14 countries or areas, 1979-2000--Continued [Average annual rates of change 1/] Country or area 1979-2000 1979-85 1985-90 1990-95 1995-2000 1999-2000 Hourly compensation 2/: national currency basis United States 4.7 7.2 3.9 3.5 3.9 7.0 Canada 4.9 9.1 4.2 3.7 2.0 3.5 Japan 3.6 4.7 4.6 3.7 1.1 -.6 Korea NA NA 15.6 18.2 7.3 6.3 Taiwan 8.9 12.6 11.5 7.1 4.0 1.6 Belgium 4.6 8.1 3.7 3.9 2.1 2.3 Denmark NA 8.1 5.3 NA NA NA France 6.2 12.8 4.5 3.7 3.0 5.9 Germany NA NA NA NA 2.6 3.2 Italy 8.3 15.9 7.4 6.0 3.1 3.2 Netherlands 3.7 5.0 2.1 4.0 3.4 5.6 Norway 6.7 10.0 7.8 3.4 5.1 5.0 Sweden 6.7 9.8 8.4 3.9 4.2 2.6 United Kingdom 8.0 12.2 9.4 5.4 4.5 3.9 Unit labor costs: national currency basis United States 1.2 3.6 1.4 0.2 -0.7 1.4 Canada 2.8 5.5 3.7 .4 1.1 2.2 Japan -.2 1.1 .3 .4 -2.6 -6.0 Korea NA NA 6.9 7.8 -3.9 -4.0 Taiwan 2.9 7.1 3.4 1.7 -1.5 -3.5 Belgium .8 2.0 1.5 .7 -1.2 -.6 Denmark 3.1 5.9 4.8 .0 1.3 -1.7 France 2.5 9.5 1.0 -.4 -1.2 -.3 Germany NA NA NA NA -.1 -2.8 Italy 5.5 12.0 4.8 2.4 1.9 -.5 Netherlands .4 .5 -.1 .3 .9 1.4 Norway 5.3 7.4 6.4 2.3 4.7 3.9 Sweden 3.0 6.5 6.4 -1.2 -.1 -2.1 United Kingdom 4.2 7.5 4.5 2.0 2.2 -1.4 Continued on next page. Table B. Changes in output per hour, hourly compensation, unit labor costs, and related measures for manufacturing, 14 countries or areas, 1979-2000--Continued [Average annual rates of change 1/] Country or area 1979-2000 1979-85 1985-90 1990-95 1995-2000 1999-2000 Unit labor costs: U.S. dollar basis United States 1.2 3.6 1.4 0.2 -0.7 1.4 Canada 1.6 2.8 7.0 -2.8 -.5 2.2 Japan 3.2 -.3 10.8 9.5 -5.3 -.8 Korea NA NA 11.1 6.0 -11.0 1.0 Taiwan 3.6 5.3 11.8 2.0 -4.7 -.3 Belgium -1.1 -9.3 13.8 3.3 -8.7 -13.9 Denmark 1.0 -5.8 16.7 2.1 -5.9 -15.1 France .0 -3.3 11.6 1.3 -8.0 -13.6 Germany NA NA NA NA -7.6 -15.8 Italy 1.0 -2.5 15.1 -3.7 -3.1 -13.8 Netherlands -.4 -7.6 12.7 2.9 -6.8 -12.1 Norway 2.5 -1.7 13.3 2.0 -2.0 -8.0 Sweden -.6 -5.2 14.7 -4.8 -5.0 -11.7 United Kingdom 2.5 -1.0 11.4 -.4 1.3 -7.6 Exchange rates 3/ United States --- --- --- --- --- --- Canada -1.1 -2.5 3.2 -3.2 -1.6 0.0 Japan 3.4 -1.5 10.5 9.1 -2.7 5.5 Korea -4.0 -9.2 3.9 -1.7 -7.3 5.2 Taiwan .7 -1.7 8.2 .3 -3.3 3.4 Belgium -1.9 -11.1 12.2 2.5 -7.6 -13.3 Denmark -2.0 -11.0 11.4 2.0 -7.1 -13.7 France -2.4 -11.7 10.5 1.8 -6.8 -13.3 Germany NA NA NA NA -7.5 -13.3 Italy -4.3 -12.9 9.8 -6.0 -4.9 -13.3 Netherlands -.8 -8.0 12.7 2.6 -7.6 -13.3 Norway -2.6 -8.4 6.6 -.3 -6.4 -11.4 Sweden -3.6 -11.0 7.8 -3.7 -4.9 -9.8 United Kingdom -1.6 -7.9 6.6 -2.4 -.8 -6.3 NA = not available. 1/ Rates of change based on the compound rate method. 2/ Adjusted to include employment taxes that are not compensation to employees but are labor costs to employers. 3/ Value of foreign currency relative to the U.S. dollar. Table C. U.S. manufacturing unit labor costs relative to those of 12 competitors, 1979-2000 Unit labor costs: Unit labor costs: national currency basis U.S. dollar basis Year Own Competitors' Own Competitors' index index Ratio index index Ratio 1979 100.0 100.0 100.0 100.0 100.0 100.0 1980 111.4 110.6 100.8 111.4 110.3 101.0 1981 116.5 118.8 98.1 116.5 109.3 106.6 1982 124.2 126.9 97.9 124.2 105.7 117.6 1983 121.6 128.7 94.4 121.6 104.2 116.6 1984 121.0 129.1 93.7 121.0 98.6 122.7 1985 123.4 130.7 94.4 123.4 96.9 127.2 1986 128.9 136.5 94.4 128.9 123.2 104.6 1987 122.8 138.2 88.8 122.8 141.6 86.7 1988 122.5 138.5 88.5 122.5 152.8 80.2 1989 128.0 141.5 90.4 128.0 150.8 84.9 1990 132.4 147.2 89.9 132.4 163.0 81.2 1991 138.0 153.3 90.0 138.0 172.9 79.9 1992 141.3 156.8 90.2 141.3 181.0 78.1 1993 142.3 157.7 90.2 142.3 177.6 80.1 1994 139.2 155.0 89.8 139.2 177.5 78.4 1995 134.0 154.3 86.8 134.0 186.7 71.8 1996 132.1 154.9 85.3 132.1 177.9 74.3 1997 129.9 153.4 84.7 129.9 163.7 79.4 1998 131.2 156.0 84.1 131.2 157.6 83.2 1999 127.6 154.3 82.6 127.6 160.8 79.3 2000 129.3 151.2 85.5 129.3 153.1 84.5