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Multifactor Productivity Trends News Release

For release 10:00 am (EDT) March 20, 2019	USDL-19-0450
Technical information:	(202) 691-5606  •  mfpweb@bls.gov  •  www.bls.gov/mfp
Media contact:	        (202) 691-5902  •  PressOffice@bls.gov

	MULTIFACTOR PRODUCTIVITY TRENDS – 2018 

Private nonfarm business sector multifactor productivity increased 1.0 percent
in 2018, the U.S. Bureau of Labor Statistics reported today. 
(See chart 1, table A.) This 2018 increase reflects a 3.5-percent 
increase in output and a 2.6-percent increase in the combined inputs
of capital and labor. Capital services grew by 2.9 percent and labor
input–which is the combined effect of hours worked and labor 
composition–grew by 2.4 percent. Multifactor productivity increased
0.4 percent in 2017. (See table 1.)

Multifactor productivity is calculated by dividing an index of 
real output by an index of combined units of labor input and 
capital services. Multifactor productivity annual measures differ
from BLS quarterly labor productivity (output per hour worked) measures
because the former also includes the influences of capital services
and shifts in the composition of the workforce. Measures for the most 
recent year of this release are preliminary estimates. See the Technical
Notes for additional information.

Private business sector multifactor productivity also increased at a 
1.0-percent annual rate in 2018. A 3.5-percent increase in output 
outpaced a 2.5-percent increase in the combined inputs of capital and
labor in 2018. (See table A, table 2.) 

2018 Multifactor Productivity Trends

The 1.0-percent growth of multifactor productivity in the nonfarm business
sector is 0.2 percentage point higher than the average annual rate of 0.8 
percent from the 1987-2018 period. For the 2007-18 period, reflecting the
most recent business cycle, multifactor productivity grew at an average 
annual rate of 0.4 percent as output grew 1.9 percent and combined inputs rose
1.5 percent. The average annual increase in combined inputs reflected a 
2.3-percent increase in capital services along with a 0.9-percent increase
in labor input. (See table A.)

The 1.0-percent multifactor productivity increase was the largest increase 
since the 2010 increase of 2.6 percent. Over the last 8 years, labor 
productivity growth has been at or below the 1.3 annual percent growth rate of
2018. Labor productivity growth can be viewed as the sum of three components: 
multifactor productivity growth, the contribution of capital intensity, 
and the contribution of shifts in labor composition. The contribution of 
capital intensity grew 0.7 percentage points in the 2007-18 period and 
remains the largest contributor to labor productivity growth in the period. 
(See chart 2.) The contributions of labor composition decelerated slightly 
between the 2000-07 period and the 2007-18 period, to 0.2 percent. 
(See chart 2, table B.) 

Revisions to 2017 Multifactor Productivity Growth

In 2017, the multifactor productivity growth rate in the private nonfarm 
business sector was revised down from an average annual rate of 0.9 percent 
to an average annual rate of 0.4 percent due to a downward revision to output
of 0.2 percentage point and an upward revision to combined inputs of 0.3 
percentage point. In 2016, the multifactor productivity growth rate in 
the private nonfarm business sector remained as previously published, 
declining at an average annual rate of 0.6 percent. (See table D.)

Historical Revisions to Capital Services and Labor Input 1987-2017

The capital services and labor input estimates in this release reflect 
important data source revisions to capital and an improvement in
methodology to estimating labor composition. 

The capital measures in this release reflect the July 27, BEA 2018 
Comprehensive Update of the National Income and Product Accounts (NIPA)
as well as the November 1, 2018 Gross Domestic Product by Industry: 
Second Quarter 2018. Historical revisions in these accounts had a notable 
impact on the measures of capital services due to the following:
•	Incorporation of an estimate of the value of capital services 
in measures of own-account investment in software and in R&D beginning
with 2007, bringing these measures into greater alignment with economic theory.
•	A reclassification of R&D for software from private fixed investment
in software to private fixed investment in R&D beginning with 1987,
resolving an inconsistency between the NIPA measures of R&D and the 
source data underlying the NIPA measures.

The labor composition component of labor input incorporated a revised 
smoothing methodology to better account for missing data. Additionally,
an educational attainment distinction of college/no college has been added.
The impact to the long-term growth estimates from the labor composition 
update were negligible; however, year to year estimates can show moderate 
revisions. These revisions span the entire period and are mostly derived 
from the improved smoothing method rather than a change to any trends. 

The impact of these data source and methodology revisions in the recent 
period can be seen on Table D.  

The impact of the revisions to capital services span the 1987-2017 time 
series. Average annual growth of capital services in the long term has 
been revised up 0.2 percent. In the most recent business cycle, 2007-17,
the revisions were more pronounced with a 0.6-percentage point increase 
in the average annual growth. (See Chart 3.)

The revision to capital services in the most recent business cycle can be
attributed to the changes in the source data treatment of software and 
research and development (R&D). Software and R&D assets, along with artistic
originals, make up the intellectual property products category of capital 
which experienced a 1.1-percentage point upward revision over the 2007-16
period. A comparison of the latest business cycle and the long term growth 
in the intellectual property products category depicting the most notable 
revisions are found in Chart 4.

Table A.   Productivity, output, and inputs in the private nonfarm business
and private business sectors for selected periods,1987-2018

Average annual growth rates


                              1987- 1987- 1990- 1995- 2000- 2007- 2016- 2017-
                              2018  1990  1995  2000  2007  2018  2017  2018

Private nonfarm business1

Productivity
  Multifactor Productivity2    0.8   0.4   0.6   1.4   1.4   0.4   0.4   1.0
  Labor productivity3          2.0   1.5   1.7   2.9   2.8   1.3   1.1   1.3
  Output per unit of
    capital                   -0.6  -0.6  -0.5  -0.8  -0.6  -0.5  -0.2   0.6


Output                         2.9   3.2   2.9   5.1   2.9   1.9   2.7   3.5
Combined inputs4               2.1   2.8   2.4   3.7   1.4   1.5   2.3   2.6
   Labor input5                1.4   2.3   1.8   2.5   0.4   0.9   1.9   2.4
     Hours                     0.9   1.7   1.2   2.2   0.1   0.5   1.6   2.2
     Labor Composition6        0.4   0.5   0.6   0.4   0.4   0.4   0.3   0.2
   Capital services            3.5   3.8   3.5   6.0   3.5   2.3   2.9   2.9
Analytic ratio
   Capital intensity7          2.6   2.1   2.3   3.7   3.4   1.8   1.3   0.7


Private business1

Productivity
  Multifactor Productivity2    0.9   0.5   0.5   1.6   1.4   0.4   0.4   1.0
  Labor productivity3          2.0   1.6   1.6   3.0   2.8   1.3   1.1   1.4
  Output per unit of
    capital                   -0.5  -0.5  -0.4  -0.6  -0.5  -0.4  -0.2   0.7


Output                         2.9   3.2   2.9   5.1   2.9   1.9   2.6   3.5
Combined inputs4               2.0   2.7   2.4   3.5   1.4   1.4   2.2   2.5
   Labor input5                1.3   2.1   1.9   2.4   0.4   0.9   1.8   2.3
     Hours                     0.9   1.6   1.3   2.0   0.0   0.6   1.5   2.1
     Labor Composition6        0.4   0.5   0.6   0.4   0.4   0.4   0.3   0.2
   Capital services            3.4   3.8   3.3   5.8   3.4   2.3   2.9   2.8
Analytic ratio
   Capital intensity7          2.5   2.1   2.1   3.7   3.4   1.7   1.3   0.7


1.  Excludes government enterprises.
2.  Output per combined units of labor input and capital services.
3.  Output per hour worked.
4.  The growth rate of each input is weighted by its share of current dollar
    costs.
5.  Hours at work by age, education, and gender group are weighted by each
    group’s share of total wages.
6.  Ratio of labor input to hours.
7.  Capital services per hour.

Table B. Labor productivity and the contributions of capital intensity, labor
composition, and multifactor productivity to labor productivity in the private
nonfarm business and private business sectors for selected periods,1987-2018

Average annual growth rates/ percentage point



                    1987- 1987- 1987- 1990- 1995- 2000- 2007- 2007- 2016- 2017-
                    2017  2018* 1990  1995  2000  2007  2017  2018* 2017  2018*

Private nonfarm 
   business1

Labor productivity
Growth2              2.0   2.0   1.5   1.7   2.9   2.8   1.3   1.3   1.1   1.3

Contribution of
capital intensity3   0.9   0.9   0.7   0.7   1.2   1.1   0.7   0.7   0.5   0.2

   Contribution of
   information 
   processing 
   equipment(IPE)4   0.3    NA   0.3   0.3   0.6   0.4   0.2    NA   0.2    NA

   Contribution of 
   research and
   development
   (R&D)5            0.1    NA   0.1   0.1   0.1   0.1   0.1    NA   0.1    NA

   Contribution of 
   intellectual 
   property 
   products (IPP)
   excluding R&D6    0.2    NA   0.2   0.2   0.2   0.2   0.2    NA   0.2    NA

   Contribution of 
   capital 
   services 
   excluding IPP
   and IPE           0.2    NA   0.1   0.2   0.2   0.4   0.2    NA   0.0    NA

Contribution of 
labor composition7   0.3   0.3   0.4   0.4   0.2   0.3   0.3   0.2   0.2   0.1

Multifactor 
productivity Growth8 0.8   0.8   0.4   0.6   1.4   1.4   0.3   0.4   0.4   1.0

  Contribution of 
  R&D to 
  multifactor 
  productivity 	     0.2    NA   0.2   0.2   0.2   0.2   0.1    NA   0.1    NA   


Private business1

Labor productivity
Growth2              2.0   2.0   1.6   1.6   3.0   2.8   1.3   1.3   1.1   1.4

Contribution of
capital intensity3   0.9   0.9   0.7   0.7   1.2   1.1   0.7   0.6   0.5   0.3

   Contribution of
   information 
   processing 
   equipment(IPE)4   0.3    NA   0.3   0.3   0.6   0.4   0.2    NA   0.2    NA

   Contribution of 
   research and
   development
   (R&D)5            0.1    NA   0.1   0.1   0.1   0.1   0.1    NA   0.1    NA

   Contribution of 
   intellectual 
   property 
   products (IPP)
   excluding R&D6    0.2    NA   0.2   0.2   0.2   0.2   0.2    NA   0.2    NA

   Contribution of 
   capital 
   services 
   excluding IPP
   and IPE           0.2    NA   0.2   0.1   0.2   0.4   0.2    NA   0.0    NA

Contribution of 
labor composition7   0.3   0.3   0.4   0.4   0.2   0.3   0.2   0.2   0.2   0.1

Multifactor 
productivity Growth8 0.9   0.9   0.5   0.5   1.6   1.4   0.4   0.4   0.4   1.0

1. Excludes government enterprises.
2. Output per hour worked.
3. Capital services per hour multiplied by capital's share of current dollar
   costs.
4. Information processing equipment per hour multiplied by its share of current
   dollar costs.
5. Research and development per hout multiplied by its share of current dollar
   costs.
6. Software and artistic originals per hour multiplied by their share of
   current dollar costs.
7. Labor composition multiplied by labor's share of current dollar costs.
8. Output per unit of combined labor and capital services.
*  NA identifies where data for the most recent year are not available.

Note: Multifactor productivity plus contribution of capital intensity and
labor composition may not sum to output per hour due to independent
rounding. Contributions of the components of capital intensity may not
sum to the total contribution of capital intensity due to independent
rounding.

Table C. Real capital services by asset type in the private nonfarm business 
and private business sectors for selected periods, 1987-2016

Average annual growth rates

                        1987-   1987-   1990-   1995-   2000-   2007-   2016-
                        2017    1990    1995    2000    2007    2017    2017

Private nonfarm business1

All Assets               3.5     3.8     3.5     6.0     3.5     2.3     2.9

  Equipment              4.9     3.9     4.3     9.3     5.0     3.2     3.9

    Information
    Processing
    Equipment (IPE)      9.9     8.7     8.6    18.8     9.6     7.0     7.0

      Computers &
      related equipment 16.7    18.5    17.4    40.7    14.6     6.9     3.9

      Communication
      equipment          9.0     6.2     5.3    10.7     9.6    10.7    12.6

      Other IPE          2.9     2.0     3.2     3.4     3.1     2.7     3.5

    All other equipment  2.5     1.7     2.2     4.8     2.9     1.6     2.6

  Structures             1.6     2.9     2.0     2.2     1.3     1.0     1.2

  Intellectual property
  products (IPP)         6.0     8.0     6.8     8.2     5.5     4.4     5.7

      Research
         &    
      Development        4.4     5.8     5.1     5.6     4.2     3.2     4.2

      Software          10.6    17.5    12.7    15.6     8.3     6.8     8.5

      Artistic
      Originals          3.2     3.8     3.5     4.0     3.6     2.2     2.3

  Rental residential     1.2     2.0     0.9     1.9     2.2     0.0     0.7
  capital

  Inventories            2.6     3.4     2.3     4.3     2.2     2.0     0.6

  Land                   0.8     1.4     1.3     1.2     0.7     0.1     1.2

Private business1

All Assets               3.4     3.8     3.3     5.8     3.4     2.2     2.9

  Equipment              4.8     3.6     4.1     9.1     4.9     3.2     3.8

    Information
    Processing
    Equipment (IPE)     10.0     8.7     8.6    18.8     9.6     7.1     6.9

      Computers &
      related equipment 16.7    18.5    17.4    40.7    14.6     6.9     3.9

      Communication
      equipment          9.0     6.2     5.3    10.7     9.6    10.7    12.6

      Other IPE          3.0     2.1     3.2     3.4     3.3     2.9     3.5

    All other equipment  2.4     1.4     2.0     4.7     2.8     1.6     2.6

  Structures             1.6     2.8     1.9     2.2     1.3     1.0     1.2

  Intellectual property
  products (IPP)         6.0     8.1     6.8     8.2     5.5     4.4     5.7

      Research
         &    
      Development        4.4     5.8     5.1     5.6     4.2     3.2     4.2

      Software          10.6    17.5    12.7    15.6     8.3     6.8     8.5

      Artistic
      Originals          3.2     3.8     3.5     4.0     3.6     2.2     2.3

  Rental residential     1.2     2.0     0.9     1.9     2.2     0.0     0.7
  capital

  Inventories            2.5     2.9     2.3     4.2     2.1     1.9     0.5

  Land                   0.7     2.9     1.1     0.8     0.7    -0.1     1.2

1. Excludes government enterprises.

Note: Real capital services by asset type are not available for the most
recent reference year. For a brief discussion of methods used in 
preparing these data, see Technical Notes in this release.

Table D. Previous and revised multifactor productivity and related measures for
the 2016-2017 and 2015-2016 periods                                            

                                                                               
                                                           Inputs              
                                                                               
                          Multifactor   Real value-  Combined         Capital 
  Sector                  productivity1 added output inputs2   Labor3 services
                                                                               
              Annual percent change, 2016-2017                                 
Private nonfarm business                                                       
 Revised                    0.4           2.7          2.3       1.9    2.9   
Private business                                                               
 Revised                    0.4           2.6          2.2       1.8    2.9   
                                                                               
              Annual percent change, 2015-2016                                 
Private nonfarm business                                                       
 Previous                   0.9           2.9          2.0       1.9    2.2   
 Revised                   -0.6           1.6          2.2       1.8    3.0   
Private business                                                               
 Previous                   0.8           2.7          2.0       1.8    2.2   
 Revised                   -0.5           1.6          2.2       1.8    2.9   
                                                                               
1. Output per combined units of labor input and capital services.              
2. The growth rate of each input is weighted by its share of current           
   dollar costs.                                                               
3. Hours at work by age, education, and gender group, weighted by each group’s 
   share of total wages.                                                       

Technical Notes

Capital Services  

Capital services are the services derived from the stock of physical assets
and intellectual property assets. There are 90 asset types for fixed business
equipment, structures, inventories, land, and intellectual property products.
Data on investment for fixed assets are obtained from the Bureau of Economic
Analysis (BEA). Data on inventories are estimated using information from BEA 
and the Internal Revenue Service (IRS) Corporation Income Returns. Data for
land in the farm sector are obtained from the U.S. Department of Agriculture 
(USDA). Nonfarm industry detail for land is based on IRS book value data.
Current-dollar value-added data, obtained from BEA, are used in estimating 
capital rental prices.

BLS provides additional detail in table C on information processing equipment
and intellectual property products. Information processing equipment is 
composed of three broad classes of assets: computers and related equipment, 
communications equipment, and other information processing equipment. 
Computers and related equipment includes mainframe computers, personal 
computers, printers, terminals, tape drives, storage devices, and integrated
systems. Communications equipment is not further differentiated. Other 
information processing equipment includes medical equipment and related 
instruments, electromedical instruments, nonmedical instruments, photocopying
and related equipment, and office and accounting machinery. Intellectual 
property products are composed of three broad classes of assets: software,
research and development, and artistic originals. Software is comprised 
of pre-packaged and custom. Research and development is creative work 
undertaken to increase the stock of knowledge for the purpose of discovering
or developing new products or improving existing ones.  Research and 
Development also includes own-account R&D for software which had previously
been classified in software. Artistic originals include theatrical movies,
long-lived television programs, books, music, and other forms of 
entertainment. Structures include nonresidential structures and 
residential capital that are rented out by profit-making firms or 
persons.

Financial assets are excluded from capital services measures, as are 
owner-occupied residential structures. The aggregate capital services
measures are obtained by Tornqvist aggregation of the capital stocks for
each asset type within each of 60 NAICS industry groupings using estimated
rental prices for each asset type. Each rental price reflects the nominal 
rate of return to all assets within the industry and rates of economic 
depreciation and revaluation for the specific asset; rental prices are 
adjusted for the effects of taxes. Current-dollar capital costs can be defined
as each asset’s rental price multiplied by its constant-dollar stock, 
adjusting for capital composition effects. 

Capital services measures constructed for the most recent year are 
preliminary and are based on less detail than the rest of the series. 
These measures consist of 6 asset types as opposed to the 90 asset types
for fixed business equipment, structures, inventories, land, and intellectual
property products included in estimates for all previous years. The assets 
included in the most recent year are structures, fixed business equipment, 
intellectual property products, inventories, rental residences, and land. 
Investments, depreciation, and capital income are estimated for each of these 
six aggregates. Capital services are calculated by a chained superlative 
Tornqvist index combining stocks of the six asset categories, weighted by 
capital income shares. See the June 2005 Monthly Labor Review article, 
“Preliminary estimates of multifactor productivity 
growth” located at www.bls.gov/opub/mlr/2005/06/art3full.pdf. 

Labor Input

Labor input in private business and private nonfarm business is obtained 
by a chained superlative Tornqvist aggregation of the hours worked, 
classified by age, education, and gender with weights determined by each
group’s share of the total wage bill. Hours paid of employees are largely
obtained from the Current Employment Statistics (CES) program. Weekly 
paid hours are adjusted to hours worked using data from the National 
Compensation Survey (NCS) for 1996 forward and data from the BLS Hours 
at Work survey, conducted for this purpose, prior to 1990. Between 1990 
and 1995, weekly paid hours are adjusted to hours at work using a combination
of NCS and Hours at Work survey data. Hours worked for nonproduction and 
supervisory workers are derived using data from the Current Population 
Survey (CPS), CES, and NCS. The hours worked of proprietors, unpaid family
workers, and farm employees are derived from the CPS. Hours worked data 
reflect estimates in the February 6, 2019 “Productivity and Costs” news 
release (USDL-19-0188).

The estimates of 2018 hours worked for the private nonfarm business and 
private business sectors are extrapolated from the hours worked reported
in the nonfarm business and business sectors, respectively, in the 
February 6, 2019 “Productivity and Costs” news release (USDL-19-0188). 
The growth rate of labor composition is defined as the difference between
the growth rate of weighted labor input and the growth rate of the hours 
of all persons.  The index of hours worked of all persons including 
employees, proprietors, and unpaid family workers, classified by age, 
education, and gender are weighted together using median wages to compute
the labor composition estimates reflecting the different skillset of the
work force. 

Additional information concerning data sources and methods of measuring
labor composition can be found in “Changes in the Composition of Labor
for BLS Multifactor Productivity Measures, 2014” (www.bls.gov/mfp/mprlabor.pdf). 

Combined Inputs

Labor input and capital services are combined using chained superlative 
Tornqvist aggregation, applying weights that represent each component's
average share of total costs. The chained superlative Tornqvist index 
uses changing weights; the share in each year is averaged with the preceding
year's share. Total costs are defined as the value of output less a portion 
of taxes on production and imports. Most taxes on production and imports, 
such as excise taxes, are excluded from costs; however, property and motor
vehicle taxes remain in total costs.
 
Capital Intensity

Capital intensity is the ratio of capital services to hours worked in the 
production process. The higher the capital to hours ratio, the more capital
intensive the production process becomes. 

In a production process, profit-maximizing/cost-minimizing firms adjust the
factor proportions of capital and labor when the price of one factor is less 
than the other factor; there is a tendency for the firms to substitute the 
less expensive factor for the more expensive one. In the short run, changes 
in hours worked are more variable than changes in capital services. Changes 
in hours worked in business cycles can result in volatility of the capital 
intensity ratio over short periods of time. In the long run an increase in wages
relative to the price of capital will induce the firm to substitute capital for 
labor, resulting in an increase in capital intensity. 

Rising labor costs are, in fact, an incentive for firms to introduce 
automated production processes. Industry estimates of capital to hours 
ratios can be obtained at www.bls.gov/mfp/mprdload.htm.

Value-Added Output

Private business sector output is a chain-type, current-weighted index 
constructed after excluding from gross domestic product (GDP) the following
outputs: general government, nonprofit institutions, private households 
(including owner-occupied housing), and government enterprises. This release
presents data for the private business and private nonfarm business sectors. 
The private business sector accounted for approximately 75 percent of GDP in
2017.    Additionally, the private nonfarm business sector excludes farms from
the private business sector, but includes agricultural services. Multifactor
productivity measures exclude government enterprises, while the BLS quarterly 
Productivity and Costs series include them. 

The output measures are based on the National Income and Product Accounts 
(NIPA) data released by BEA on February 28, 2019. The estimates of 2018 output
for the private nonfarm business and private business sectors are extrapolated
from the output reported in the nonfarm business and business sectors, 
respectively, in the March 7, 2019 “Productivity and Costs” news release 
(USDL-19-00358). 
 
Multifactor Productivity

Multifactor productivity measures describe the relationship between output 
in real terms and the inputs involved in its production. They do not measure
the specific contributions of labor or capital, or any other factor of
production. Rather, multifactor productivity 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. 

The multifactor productivity indexes for private business and private nonfarm
business are derived by dividing an output index by an index of combined 
inputs of capital services and labor input. The output indexes are computed
as chained superlative indexes (Fisher Ideal indexes) of components of real 
output.

Research and Development

The stock of research and development in private nonfarm business is 
derived by aggregating different vintages of constant dollar measures of
research and development expenditures and allowing for depreciation. 
Current dollar expenditures for privately financed research and development
are obtained from annual issues of Research and Development in Industry 
published by the National Science Foundation. BLS develops price deflators
and estimates of the rate of depreciation.

The research and development data in the private nonfarm business sector 
presented here show the effect of spillovers from economic units that conduct
research and development. BEA publishes measures of research and development
investments in each industry that include estimates of the direct returns to 
firms conducting such research and development activities. By combining the
direct returns to firms conducting research and development with the spillover
effect of other firms, a picture of the total overall effects of research and
development can be drawn.


Further description of these data and methods can be found in BLS Bulletin 
2331 (September 1989), "The Impact of Research and Development on Productivity
Growth" at www.bls.gov/mfp/mfparchive.htm. BLS measures of year-to-year 
contributions of research and development to the private nonfarm business 
sector and measures of the stock of research and development are available 
at www.bls.gov/mfp/rdtable.pdf.

Other Information

Comprehensive tables containing additional data beyond the scope of this
press release are available upon request at (202) 691-5606 or at 
www.bls.gov/mfp/mprdload.htm. More detailed information on methods, 
limitations, and data sources of capital and labor are provided in BLS 
Bulletin 2178 (September 1983), “Trends in Multifactor Productivity, 1948-81”
(www.bls.gov/mfp/mfparchive.htm) and on the BLS Multifactor Productivity 
website under the title “Technical Information About the BLS Multifactor 
Productivity Measures for Major Sectors and 18 NAICS 3-digit
Manufacturing Industries” (www.bls.gov/mfp/mprtech.pdf). General information
is available on the BLS website at www.bls.gov/mfp/mprover.htm. 
Additional data not contained in the release can be obtained at 
www.bls.gov/mfp. Comprehensive tables can be downloaded at 
www.bls.gov/mfp/mprdload.htm, including data that links 
1948-87 SIC data to NAICS data from 1987 forward. This file includes 
data for the private business and private nonfarm business sector. 

Table 1. Private nonfarm business sector: productivity and related measures
for the 1987-2018 period1

Annual percent change from previous year

                                                                              
               Output                                  Combined               
               per                                     units of               
               unit of Multi-                          labor and              
       Labor   capital factor   Value-         Capital capital                
       produc- servic- Product- added          Servic- servic-   Capital      
Year   tivity2 es      ivity3   Output4 Labor5 es6     es7       Intensity8   

1988    1.7     0.7     1.0     4.6     3.3     3.8     3.5       1.0
1989    0.9    -0.5     0.2     3.7     3.2     4.2     3.5       1.4

1990    1.8    -1.9     0.1     1.5     0.3     3.5     1.3       3.9
1991    1.9    -3.6    -0.4    -0.5    -1.7     3.2    -0.1       5.7
1992    4.5     1.4     2.9     4.0     0.4     2.6     1.1       3.0
1993    0.3    -0.3    -0.4     3.2     3.5     3.5     3.5       0.6
1994    0.8     0.8     0.5     4.6     4.3     3.8     4.1       0.0

1995    1.2    -0.9     0.3     3.5     2.6     4.5     3.2       2.2
1996    2.2    -0.3     1.0     4.5     2.8     4.9     3.5       2.5
1997    1.8    -0.4     0.8     5.1     3.6     5.6     4.2       2.3
1998    3.1    -0.9     1.5     5.4     2.6     6.3     3.8       4.0
1999    3.8    -0.9     2.1     5.7     2.1     6.7     3.6       4.8

2000    3.4    -1.6     1.5     4.7     1.6     6.5     3.1       5.1
2001    3.1    -3.8     0.6     0.9    -1.8     4.9     0.3       7.2
2002    4.5    -1.6     2.1     1.7    -2.0     3.4    -0.3       6.2
2003    3.9     0.4     2.4     3.3    -0.1     2.9     0.9       3.5
2004    2.9     1.5     2.2     4.2     1.6     2.7     2.0       1.4

2005    2.2     0.5     1.5     4.0     1.8     3.4     2.4       1.7
2006    1.2    -0.2     0.5     3.5     2.6     3.8     3.0       1.4
2007    1.9    -0.8     0.5     2.5     1.2     3.4     2.0       2.7
2008    1.2    -3.8    -1.2    -1.0    -1.4     2.9     0.1       5.2
2009    4.0    -4.7     0.3    -3.6    -6.7     1.1    -3.9       9.2

2010    3.3     2.5     2.6     3.3     0.6     0.8     0.7       0.8
2011   -0.1     0.3    -0.2     2.0     2.5     1.7     2.2      -0.4
2012    0.8     1.2     0.7     3.2     2.8     2.0     2.5      -0.4
2013    0.5    -0.3     0.0     2.3     2.0     2.5     2.2       0.8
2014    0.8     0.3     0.5     3.1     2.5     2.8     2.6       0.5

2015    1.3     0.5     0.9     3.5     2.4     3.0     2.7       0.8
2016    0.1    -1.4    -0.6     1.6     1.8     3.0     2.2       1.5
2017    1.1    -0.2     0.4     2.7     1.9     2.9     2.3       1.3
2018    1.3     0.6     1.0     3.5     2.4     2.9     2.6       0.7

See footnotes following table 4.
Source: Bureau of Labor Statistics



Table 2. Private business sector: productivity and related measures
for the 1987-2018 period1

Annual percent change from previous year

                                                                              
               Output                                  Combined               
               per                                     units of               
               unit of Multi-                          labor and              
       Labor   capital factor   Value-         Capital capital                
       produc- servic- Product- added          Servic- servic-   Capital      
Year   tivity2 es      ivity3   Output4 Labor5 es6     es7       Intensity8   

1988    1.5     0.4     0.8     4.3     3.2     3.9     3.5       1.2
1989    1.2    -0.3     0.4     3.8     3.1     4.1     3.4       1.5

1990    2.1    -1.7     0.4     1.6     0.1     3.3     1.2       3.9
1991    1.8    -3.4    -0.4    -0.5    -1.6     3.0    -0.1       5.4
1992    4.7     1.7     3.1     4.2     0.4     2.4     1.1       2.9
1993    0.2    -0.4    -0.4     2.9     3.3     3.3     3.3       0.6
1994    0.6     1.1     0.5     4.8     4.6     3.7     4.3      -0.5

1995    0.8    -1.1     0.0     3.1     2.7     4.3     3.2       1.9
1996    2.5     0.0     1.3     4.7     2.6     4.7     3.3       2.5
1997    2.0    -0.2     1.1     5.2     3.4     5.4     4.1       2.2
1998    3.1    -0.8     1.5     5.2     2.5     6.1     3.7       4.0
1999    4.0    -0.7     2.2     5.7     1.9     6.5     3.4       4.8

2000    3.5    -1.4     1.7     4.8     1.6     6.3     3.1       4.9
2001    3.1    -3.8     0.6     0.8    -1.9     4.8     0.2       7.2
2002    4.4    -1.4     2.1     1.8    -2.0     3.2    -0.3       5.9
2003    4.1     0.6     2.5     3.3    -0.2     2.7     0.8       3.5
2004    3.0     1.5     2.3     4.3     1.5     2.7     1.9       1.5

2005    2.3     0.5     1.5     4.0     1.8     3.5     2.4       1.8
2006    1.2    -0.3     0.5     3.5     2.5     3.8     3.0       1.6
2007    1.8    -0.8     0.5     2.4     1.1     3.2     1.9       2.6
2008    1.1    -3.6    -1.1    -1.0    -1.4     2.7     0.1       4.9
2009    4.1    -4.4     0.4    -3.5    -6.7     1.0    -3.9       8.9

2010    3.3     2.4     2.6     3.3     0.6     0.8     0.7       0.8
2011   -0.2     0.1    -0.3     1.9     2.5     1.8     2.2      -0.4
2012    0.7     1.0     0.6     3.1     2.7     2.1     2.5      -0.3
2013    0.9    -0.1     0.4     2.5     1.9     2.5     2.1       0.9
2014    0.7     0.3     0.4     3.1     2.6     2.8     2.7       0.3

2015    1.2     0.7     0.9     3.6     2.6     2.9     2.7       0.5
2016    0.1    -1.2    -0.5     1.6     1.8     2.9     2.2       1.4
2017    1.1    -0.2     0.4     2.6     1.8     2.9     2.2       1.3
2018    1.4     0.7     1.0     3.5     2.3     2.8     2.5       0.7

See footnotes following table 4.
Source: Bureau of Labor Statistics



Table 3. Private nonfarm business sector: indexes of productivity and related
measures, 1987-2018 period1

Indexes 2012=100

                                                                              
               Output                                  Combined               
               per                                     units of               
               unit of Multi-                          labor and              
       Labor   capital factor   Value-         Capital capital                
       produc- servic- Product- added          Servic- servic-   Capital      
Year   tivity2 es      ivity3   Output4 Labor5 es6     es7       Intensity8   

1987    57.5    119.4   79.5    48.5    75.0    40.7    61.0      48.2
1988    58.5    120.2   80.4    50.8    77.5    42.2    63.2      48.6
1989    59.0    119.6   80.5    52.6    80.0    44.0    65.4      49.3

1990    60.1    117.3   80.6    53.4    80.2    45.5    66.3      51.2
1991    61.2    113.1   80.3    53.1    78.8    47.0    66.2      54.1
1992    63.9    114.6   82.6    55.3    79.2    48.2    66.9      55.8
1993    64.1    114.3   82.3    57.0    82.0    49.9    69.3      56.1
1994    64.6    115.2   82.7    59.6    85.5    51.8    72.1      56.1

1995    65.4    114.1   82.9    61.7    87.7    54.1    74.5      57.3
1996    66.8    113.8   83.7    64.5    90.2    56.7    77.1      58.7
1997    68.0    113.3   84.4    67.8    93.4    59.9    80.3      60.0
1998    70.1    112.3   85.7    71.5    95.9    63.6    83.4      62.4
1999    72.8    111.3   87.4    75.5    97.9    67.9    86.4      65.4

2000    75.3    109.5   88.8    79.1    99.5    72.3    89.1      68.8
2001    77.6    105.3   89.3    79.8    97.7    75.8    89.4      73.7
2002    81.1    103.6   91.1    81.2    95.7    78.4    89.1      78.2
2003    84.2    104.0   93.3    83.9    95.6    80.6    89.9      81.0
2004    86.7    105.5   95.4    87.4    97.1    82.8    91.6      82.1

2005    88.6    106.1   96.9    90.9    98.9    85.7    93.8      83.5
2006    89.7    105.8   97.3    94.1   101.5    88.9    96.7      84.7
2007    91.3    105.0   97.9    96.4   102.6    91.9    98.6      87.0
2008    92.4    100.9   96.7    95.4   101.2    94.6    98.7      91.6
2009    96.1     96.2   96.9    92.0    94.4    95.6    94.9     100.0

2010    99.4     98.6   99.5    95.0    94.9    96.4    95.5     100.8
2011    99.2     98.9   99.3    96.9    97.3    98.0    97.6     100.4
2012   100.0    100.0  100.0   100.0   100.0   100.0   100.0     100.0
2013   100.5     99.7  100.0   102.3   102.0   102.5   102.2     100.8
2014   101.3    100.0  100.5   105.5   104.6   105.4   104.9     101.3

2015   102.6    100.5  101.4   109.2   107.1   108.7   107.7     102.1
2016   102.8     99.1  100.8   111.0   109.0   111.9   110.1     103.6
2017   103.9     98.9  101.2   114.0   111.1   115.2   112.6     105.0
2018   105.3     99.6  102.1   118.0   113.8   118.5   115.5     105.7

See footnotes following table 4.
Source: Bureau of Labor Statistics



Table 4. Private business sector: indexes of productivity and related
measures, 1987-2018 period1

Indexes 2012=100

                                                                              
               Output                                  Combined               
               per                                     units of               
               unit of Multi-                          labor and              
       Labor   capital factor   Value-         Capital capital                
       produc- servic- Product- added          Servic- servic-   Capital      
Year   tivity2 es      ivity3   Output4 Labor5 es6     es7       Intensity8   

1987    57.0    116.6   78.7    48.6    75.8    41.7    61.8      48.9
1988    57.8    117.0   79.3    50.7    78.3    43.4    64.0      49.4
1989    58.5    116.7   79.6    52.7    80.7    45.1    66.2      50.1

1990    59.7    114.7   79.9    53.5    80.8    46.6    66.9      52.1
1991    60.8    110.8   79.6    53.2    79.5    48.0    66.9      54.9
1992    63.7    112.7   82.0    55.4    79.8    49.2    67.6      56.5
1993    63.8    112.3   81.7    57.1    82.5    50.8    69.8      56.8
1994    64.2    113.5   82.1    59.8    86.3    52.7    72.9      56.6

1995    64.8    112.3   82.1    61.7    88.6    55.0    75.2      57.7
1996    66.4    112.3   83.2    64.6    90.9    57.5    77.7      59.1
1997    67.7    112.1   84.0    67.9    94.0    60.6    80.9      60.4
1998    69.9    111.2   85.3    71.5    96.3    64.3    83.8      62.8
1999    72.7    110.4   87.2    75.6    98.2    68.5    86.7      65.8

2000    75.2    108.9   88.7    79.2    99.8    72.8    89.4      69.1
2001    77.6    104.8   89.2    79.9    97.9    76.3    89.6      74.1
2002    81.0    103.3   91.0    81.3    96.0    78.7    89.3      78.4
2003    84.3    103.9   93.4    84.0    95.8    80.9    90.0      81.1
2004    86.9    105.5   95.5    87.6    97.2    83.1    91.7      82.3

2005    88.8    106.0   97.0    91.1    99.0    86.0    93.9      83.8
2006    89.9    105.6   97.4    94.3   101.5    89.2    96.7      85.1
2007    91.5    104.8   97.9    96.5   102.6    92.1    98.5      87.4
2008    92.6    101.0   96.8    95.5   101.2    94.6    98.7      91.7
2009    96.4     96.5   97.2    92.2    94.4    95.5    94.9      99.8

2010    99.5     98.9   99.7    95.2    95.0    96.3    95.5     100.6
2011    99.3     99.0   99.4    97.0    97.3    98.0    97.6     100.3
2012   100.0    100.0  100.0   100.0   100.0   100.0   100.0     100.0
2013   100.9     99.9  100.4   102.5   101.9   102.5   102.1     100.9
2014   101.6    100.3  100.8   105.7   104.5   105.4   104.9     101.3

2015   102.8    100.9  101.7   109.5   107.2   108.4   107.7     101.8
2016   102.9     99.7  101.1   111.3   109.1   111.6   110.1     103.2
2017   104.1     99.5  101.5   114.2   111.1   114.8   112.5     104.6
2018   105.5    100.1  102.5   118.1   113.6   118.0   115.3     105.3

See footnotes following table 4.
Source: Bureau of Labor Statistics



Footnotes, Tables 1-4

Source: The Bureau of Labor Statistics (BLS) develops productivity measures 
	using output and compensation data published by the Bureau of 
	Economic Analysis (BEA), hours data published by other BLS programs, 
	and capital data supplied by BEA and U.S. Department of Agriculture.
	Also see Technical Notes in this release.

(1)	The private business sector covers gross domestic product with the 
	exception of the output of general government, government 
	enterprises, non-profit institutions, the rental value of owner- 
	occupied real estate, and the output of paid employees of private
	households. The private nonfarm business sector further excludes
	farms but includes agricultural services.

(2)	Output per hour worked.

(3)	Output per combined units of labor input and capital services.

(4)	Gross domestic product originating in the sector, chained superlative
	index. 

(5)	Index of hours worked of all persons including employees, proprietors,
	and unpaid family workers, classified by age, education, and gender. 
	This chained superlative index is computed by combining changes in 
	the hours of each age, education, and gender group weighted by each
	group’s share of total wages.

(6)	A measure of the flow of capital services used in the sector. 
	Capital services measure the services derived from the stock of 
	physical assets and intellectual property products.
 
(7)	The growth rates of labor input and capital services are combined
	by weighting with their respective shares of current dollar costs 
	as weights, and aggregating into a chained superlative index.

(8)	Capital services per hour.


Last Modified Date: March 20, 2019