Multifactor productivity (MFP) is calculated as a ratio of output to a combination of inputs. Inputs can include labor, capital, materials, energy, and purchased services.
For major sector measures, MFP is the ratio of output to labor and capital (buildings, machines, inventories, land).
For industry measures, MFP is the ratio of output to labor, capital, energy, materials, and purchased services.
BLS combines each type of input into a single combined inputs index, with greater weight given to those that make up a larger proportion of total costs.
For example, an index of combined inputs for the car industry might include: