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.
United States Department of Labor
