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Historical, technical USDL 08-0687 information: (202) 691-5618 FOR RELEASE: 10:00 a.m. EDT Media contact: (202) 691-5902 Wednesday, May 21, 2008 Internet: http://www.bls.gov/lpc/home.htm PRODUCTIVITY AND COSTS BY INDUSTRY: SELECTED SERVICE-PROVIDING AND MINING INDUSTRIES, 2006 Labor productivity, defined as output per hour, rose in nearly two- thirds of the measured service-providing and mining industries in 2006, about the same proportion as in 2005. Output rose in 66 percent of the industries, while labor hours increased in 59 percent. Unit labor costs fell in approximately 20 percent of the industries in 2006. Over the period 1987 to 2006, labor productivity increased in 86 percent of the industries, significantly more than in 2006. Output grew in 91 percent, while hours increased in 66 percent of the industries. Unit labor costs fell in one quarter of the industries over the longer period. Productivity data for industries in manufacturing, retail trade, wholesale trade, and food services and drinking places are published in separate releases that can be accessed online at http://www.bls.gov/schedule/archives/prin_nr.htm. 2005-2006 change In 2006, output per hour increased in 27 of the 40 detailed service- providing industries and in one of the 4 detailed mining industries studied. (See table 1.) Three industries recorded double-digit productivity growth: video tape and disc rental (NAICS 53223), 22.4 percent; wireless telecommunications carriers (NAICS 5172), 14.1 percent; and truck, trailer, and RV rental and leasing (NAICS 53212), 11.8 percent. Productivity fell the most in amusement and theme parks (NAICS 71311), 11.1 percent, and in refrigerated warehousing and storage (NAICS 49312), 9.2 percent. Labor productivity fell 9.1 percent in the mining sector (NAICS 21) and 7.1 percent in coal mining (NAICS 2121). (Results for the mining sector as a whole are not consistent with changes in the detailed mining industries shown in table 1, because BLS does not publish measures for every detailed mining industry.) Unit labor costs, which reflect hourly compensation and productivity, rose in more than three-fourths of the service-providing industries in 2006, and in all of the mining industries. The biggest increases in unit labor costs occurred in mining, led by a 19.2 percent increase in oil and gas extraction (NAICS 211). Among the service-providing industries, the biggest increase occurred in hair, nail, and skin care services (NAICS 81211), 10.0 percent. Several service-providing industries reduced their unit labor costs in 2006. Wireless telecommunications carriers (NAICS 5172) and video tape and disc rental (NAICS 53223) recorded unit labor cost reductions of 19.8 and 8.2 percent, respectively. These were the two industries where productivity increased the most. Long-term trends Between 1987 and 2006, labor productivity increased in 34 of the 40 detailed service-providing industries and in all of the covered mining industries. Software publishers (NAICS 5112) recorded the greatest productivity growth over the period, 16.2 percent per year on average, followed by wireless telecommunications carriers (NAICS 5172), with growth of 9.7 percent. Labor productivity declined in more of the measured service-providing and mining industries in 2006 than over the longer-term period. Unit labor costs increased in three-quarters of the detailed service- providing industries and in all but one mining industry from 1987 to 2006. Unit labor costs grew most rapidly in oil and gas extraction (NAICS 211), 5.8 percent per year on average. The most rapid declines in unit labor costs occurred in the two industries with the fastest productivity growth, software publishers (NAICS 5112) and wireless telecommunications carriers (NAICS 5172), 9.4 and 6.4 percent, respectively. New Industries Productivity and cost measures for three new industries are presented here for the first time: warehousing and storage (NAICS 493), general warehousing and storage (NAICS 49311), and refrigerated warehousing and storage (NAICS 49312). Measures for these new industries were constructed using standard BLS methods as described in the Technical Note. Output measures for the warehousing and storage industries are based on detailed annual receipts data collected by the U.S. Bureau of the Census, deflated with BLS producer price indexes (PPIs). The labor hours measures reflect data from the BLS Current Employment Statistics (CES) survey and the Current Population Survey (CPS). The labor productivity measures for these industries begin in 1992. Revisions The measures in this news release incorporate current data from the Census Bureau’s 2006 Service Annual Survey and other sources. Measures in this release replace the mining and service industry series published in the news release Productivity and Costs by Industry: Selected Service-Providing and Mining Industries, 2005 (released June 8, 2007), and in table 50 of the Monthly Labor Review. All of the measures for 2006 in this release are preliminary and subject to revision. The industries included in this release are classified according to the 2002 NAICS. Industry productivity measures will be classified according to the 2007 NAICS in 2009, with the publication of data for 2007. Additional Information Industry productivity and related indexes and rates of change can be accessed electronically by visiting the Labor Productivity and Costs web site at http://www.bls.gov/lpc/home.htm. Data on industry employment, hours, labor compensation, value of production, and the implicit price deflator for output for these industries are available upon request by calling the Division of Industry Productivity Studies (202-691-5618) or by sending a request by e-mail to dipsweb@bls.gov. While the index numbers and 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 to three decimal places. Material in this report is in the public domain and, with appropriate credit, may be used without permission. 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.
Technical Note Labor Productivity The industry labor productivity measures describe the relationship between industry output and the labor time involved in its production. They show the changes from period to period in the amount of goods and services produced per hour. Although the labor productivity measures relate output to hours of employees or all persons in an industry, they do not measure the specific contribution of labor or any other factor of production. Rather, they reflect the joint effects of many influences, including changes in technology; capital investment; utilization of capacity, energy, and materials; the use of purchased services inputs, including contract employment services; the organization of production; managerial skill; and the characteristics and effort of the workforce. Long-term productivity trends tend to be more reliable indicators of the performance of an industry than are year-to-year changes. The annual changes in an industry’s output and use of labor may reflect cyclical changes in the economy as well as long-term trends. Output Industry output is measured as an annual-weighted index of the changes in the various products or services (in real terms) provided for sale outside the industry. Real industry output is usually derived by deflating nominal sales or values of production using BLS price indexes, but for some industries it is measured by physical quantities of output. Industry output measures are constructed primarily using data from the economic censuses and annual surveys of the U.S. Census Bureau, U.S. Department of Commerce, together with information on price changes primarily from BLS. Output measures for some mining and utilities industries are based on physical quantity data from the Energy Information Administration, U.S. Department of Energy, while output measures for some transportation industries are based on physical quantity data from the Bureau of Transportation Statistics, U.S. Department of Transportation. Other data sources for some industries include the U.S. Geological Survey, U.S. Department of the Interior; the U.S. Postal Service; the Federal Deposit Insurance Corporation; and the Postal Rate Commission. Labor Hours The primary source of industry employment and hours data is the BLS Current Employment Statistics (CES) survey. The CES provides monthly data on the number of total and nonsupervisory worker jobs held by wage and salary workers in nonfarm establishments, as well as data on the average weekly hours of nonsupervisory workers in those establishments. CES data are supplemented or further disaggregated for some industries using data from the BLS Quarterly Census of Employment and Wages (QCEW), the Bureau of the Census, or other sources. Data from the Current Population Survey (CPS) are also used to supplement the CES data. The industry productivity program estimates the average weekly hours of supervisory workers for each industry using data from the CPS together with the CES data. Data from the CPS are also used to estimate the employment and hours of self-employed and unpaid family workers in each industry. Other sources of employment and hours data for some service industries include the American Association of Railroads, the U.S. Department of Transportation, and the U.S. Postal Service. Hours of all workers in an industry are treated as homogeneous and are directly aggregated. Unit Labor Costs Unit labor costs represent the cost of labor input required to produce one unit of output. The unit labor cost indexes are computed by dividing an index of industry labor compensation by an index of real industry output. Unit labor costs also describe the relationship between compensation per hour and real output per hour (labor productivity). Increases in hourly compensation increase unit labor costs; increases in labor productivity offset compensation increases and lower unit labor costs. Compensation, defined as payroll plus supplemental payments, is a measure of the cost to the employer of securing the services of labor. Payroll includes salaries, wages, commissions, dismissal pay, bonuses, vacation and sick leave pay, and compensation in kind. Supplemental payments include legally required expenditures and payments for voluntary programs. The legally required portion consists primarily of Federal old age and survivors’ insurance, unemployment compensation, and workers’ compensation. Payments for voluntary programs include all programs not specifically required by legislation, such as the employer portion of private health insurance and pension plans.
Table 1. Percent change in output per hour, output, hours, compensation, and unit labor costs, 2005-2006 Percent change, 2005-2006 2006 --------------------------------------------------- NAICS Industry Employment Output Labor Unit labor code (thousands) per hour Output Hours compensation costs Mining Industries 21 Mining 619 -9.1 0.8 10.9 19.0 18.0 211 Oil and gas extraction 135 -7.0 0.7 8.2 20.0 19.2 2111 Oil and gas extraction 135 -7.0 0.7 8.2 20.0 19.2 212 Mining, except oil and gas 220 -3.0 1.1 4.2 8.9 7.7 2121 Coal mining 78 -7.1 0.0 7.7 9.9 9.8 2122 Metal ore mining 32 -5.1 3.7 9.3 18.6 14.4 2123 Nonmetallic mineral mining and quarrying 110 0.4 0.8 0.4 4.2 3.4 Service-Providing Industries Utilities 2211 Power generation and supply 396 0.9 0.3 -0.6 2.0 1.7 2212 Natural gas distribution 106 -2.6 -3.0 -0.5 6.3 9.7 Transportation and Warehousing 481 Air transportation 457 5.1 1.5 -3.5 -2.4 -3.8 482111 Line-haul railroads 186 3.1 4.7 1.5 5.3 0.6 48412 General freight trucking, long-distance 922 -0.8 1.5 2.4 5.1 3.5 48421 Used household and office goods moving 106 -1.5 -1.5 0.0 3.2 4.8 491 Postal service 770 0.1 -0.4 -0.5 4.4 4.8 4911 Postal service 770 0.1 -0.4 -0.5 4.4 4.8 492 Couriers and messengers 611 2.8 0.3 -2.4 3.6 3.3 493 Warehousing and storage 647 -2.1 7.8 10.1 9.4 1.5 4931 Warehousing and storage 647 -2.1 7.8 10.1 9.4 1.5 49311 General warehousing and storage 544 -3.3 6.8 10.4 10.3 3.4 49312 Refrigerated warehousing and storage 48 -9.2 0.3 10.4 6.0 5.7 Information 511 Publishing 944 4.5 1.8 -2.6 5.8 4.0 5111 Newspaper, book, and directory publishers 697 3.0 -2.3 -5.2 3.1 5.5 5112 Software publishers 247 1.9 6.7 4.7 9.9 3.0 51213 Motion picture and video exhibition 136 3.3 -0.6 -3.7 2.1 2.7 515 Broadcasting, except internet 338 6.6 7.5 0.9 2.8 -4.4 5151 Radio and television broadcasting 246 8.6 8.9 0.3 4.5 -4.0 5152 Cable and other subscription programming 92 3.2 5.5 2.3 -2.8 -7.9 5171 Wired telecommunications carriers 489 5.8 0.0 -5.5 2.8 2.8 5172 Wireless telecommunications carriers 203 14.1 23.2 7.9 -1.2 -19.8 5175 Cable and other program distribution 143 0.0 7.0 7.0 15.1 7.5 Finance and Insurance 52211 Commercial banking 1323 5.3 6.1 0.8 8.5 2.3 Real Estate and Rental and Leasing 532111 Passenger car rental 132 1.4 -1.9 -3.3 1.7 3.6 53212 Truck, trailer and RV rental and leasing 62 11.8 4.1 -6.9 5.0 0.9 53223 Video tape and disc rental 137 22.4 1.2 -17.3 -7.1 -8.2 Professional and Technical Services 541213 Tax preparation services 148 -3.7 -0.1 3.8 8.8 8.9 54131 Architectural services 230 -1.4 3.9 5.4 11.3 7.1 54133 Engineering services 920 0.7 4.6 3.9 9.7 4.8 54181 Advertising agencies 191 1.0 6.8 5.7 6.2 -0.6 541921 Photography studios, portrait 77 1.9 -2.7 -4.6 6.6 9.6 Administrative and Waste Services 56131 Employment placement agencies 305 6.1 4.7 -1.3 11.8 6.8 56151 Travel agencies 123 4.1 4.4 0.3 -1.3 -5.5 56172 Janitorial services 1182 -4.8 1.2 6.4 7.6 6.3 Health Care and Social Assistance 6215 Medical and diagnostic laboratories 211 1.6 6.8 5.1 7.3 0.5 621511 Medical laboratories 143 1.8 7.0 5.2 6.8 -0.2 621512 Diagnostic imaging centers 68 1.5 6.5 4.9 8.3 1.8 Arts, Entertainment, and Recreation 71311 Amusement and theme parks 134 -11.1 -1.8 10.4 1.7 3.5 71395 Bowling centers 79 4.2 2.0 -2.2 4.0 2.0 Accommodation and Food Services 7211 Traveler accommodation 1798 -2.8 0.9 3.7 3.4 2.5 Other Services 8111 Automotive repair and maintenance 1174 0.8 -0.1 -0.9 2.5 2.6 81211 Hair, nail and skin care services 924 -5.8 -3.2 2.8 6.5 10.0 81221 Funeral homes and funeral services 108 7.0 -2.1 -8.5 -1.3 0.9 8123 Drycleaning and laundry services 368 -0.8 2.4 3.2 5.8 3.3 81292 Photofinishing 28 1.8 -10.5 -12.1 -12.4 -2.1
Table 2. Average annual percent change in output per hour, output, hours, compensation, and unit labor costs, 1987-2006 Average annual percent change, 1987-2006 ---------------------------------------------------- NAICS Industry Output Labor Unit labor code per hour Output Hours compensation costs Mining Industries 21 Mining 0.1 -0.3 -0.4 4.4 4.7 211 Oil and gas extraction 1.2 -1.0 -2.2 4.8 5.8 2111 Oil and gas extraction 1.2 -1.0 -2.2 4.8 5.8 212 Mining, except oil and gas 2.5 1.1 -1.3 1.7 0.5 2121 Coal mining 2.9 0.1 -2.7 -0.1 -0.2 2122 Metal ore mining 2.9 2.0 -0.9 3.6 1.6 2123 Nonmetallic mineral mining and quarrying 1.6 1.6 0.0 3.3 1.7 Service-Providing Industries Utilities 2211 Power generation and supply 3.0 1.3 -1.7 3.1 1.9 2212 Natural gas distribution 3.0 1.0 -1.9 3.8 2.7 Transportation and Warehousing 481 Air transportation 3.0 3.4 0.4 3.1 -0.3 482111 Line-haul railroads 4.8 2.6 -2.1 1.2 -1.3 48412 General freight trucking, long-distance 1.4 3.3 1.9 3.8 0.5 48421 Used household and office goods moving -1.1 0.5 1.6 4.4 3.9 491 Postal service 1.1 1.2 0.1 4.1 2.9 4911 Postal service 1.1 1.2 0.1 4.1 2.9 492 Couriers and messengers -0.7 2.3 3.1 6.7 4.3 493 Warehousing and storage (1) 3.4 6.8 3.2 6.0 -0.7 4931 Warehousing and storage (1) 3.4 6.8 3.2 6.0 -0.7 49311 General warehousing and storage (1) 5.4 8.6 3.1 6.7 -1.7 49312 Refrigerated warehousing and storage (1) -0.4 3.7 4.0 4.5 0.8 Information 511 Publishing 4.3 4.8 0.5 5.8 0.9 5111 Newspaper, book, and directory publishers 0.3 -0.4 -0.7 3.6 4.0 5112 Software publishers 16.2 24.3 6.9 12.6 -9.4 51213 Motion picture and video exhibition 0.8 1.8 1.0 3.9 2.0 515 Broadcasting, except internet 1.2 2.7 1.4 5.2 2.4 5151 Radio and television broadcasting 0.6 0.9 0.3 4.3 3.4 5152 Cable and other subscription programming 2.5 8.1 5.5 10.6 2.3 5171 Wired telecommunications carriers 5.1 3.3 -1.7 2.4 -0.8 5172 Wireless telecommunications carriers 9.7 24.1 13.2 16.2 -6.4 5175 Cable and other program distribution 0.3 5.8 5.5 10.4 4.3 Finance and Insurance 52211 Commercial banking 2.4 2.2 -0.2 5.9 3.5 Real Estate and Rental and Leasing 532111 Passenger car rental 1.0 3.4 2.4 6.5 3.0 53212 Truck, trailer and RV rental and leasing 5.3 4.8 -0.6 3.8 -0.9 53223 Video tape and disc rental 4.5 6.1 1.6 4.5 -1.6 Professional and Technical Services 541213 Tax preparation services 1.0 4.1 3.1 4.5 0.4 54131 Architectural services 1.5 4.0 2.4 6.2 2.2 54133 Engineering services 1.3 3.5 2.2 6.8 3.1 54181 Advertising agencies 1.7 2.0 0.3 5.0 2.9 541921 Photography studios, portrait -0.2 2.4 2.6 5.0 2.5 Administrative and Waste Services 56131 Employment placement agencies (2) 2.8 5.5 2.7 9.1 3.5 56151 Travel agencies 4.1 3.1 -0.9 4.3 1.2 56172 Janitorial services 2.3 4.4 2.0 6.0 1.5 Health Care and Social Assistance 6215 Medical and diagnostic laboratories (2) 3.6 7.1 3.3 6.1 -0.9 621511 Medical laboratories (2) 2.8 5.9 3.0 5.2 -0.6 621512 Diagnostic imaging centers (2) 4.8 9.2 4.2 8.1 -1.0 Arts, Entertainment, and Recreation 71311 Amusement and theme parks -0.7 2.6 3.3 6.5 3.9 71395 Bowling centers 0.2 -1.0 -1.3 1.5 2.6 Accommodation and Food Services 7211 Traveler accommodation 1.4 2.7 1.3 5.6 2.8 Other Services 8111 Automotive repair and maintenance 1.4 2.4 1.0 4.4 2.0 81211 Hair, nail and skin care services 2.0 3.1 1.1 5.7 2.4 81221 Funeral homes and funeral services -0.2 0.2 0.4 4.6 4.4 8123 Drycleaning and laundry services 1.1 0.6 -0.5 3.2 2.5 81292 Photofinishing 0.9 -4.7 -5.6 -1.7 3.1 (1) For NAICS industries 493, 4931, 49311, and 49312, average annual percent changes are for 1992-2006. (2) For NAICS industries 56131, 6215, 621511, and 621512, average annual percent changes are for 1994-2006.