Multifactor Productivity Trends News Release

For release 10:00 am (EDT) March 21, 2018	USDL-18-0452
Technical information:	(202) 691-5606  •  mfpweb@bls.gov  •  www.bls.gov/mfp
Media contact:	        (202) 691-5902  •  PressOffice@bls.gov 

MULTIFACTOR PRODUCTIVITY TRENDS – 2017 

Private nonfarm business sector multifactor productivity increased 0.9 percent
in 2017, the U.S. Bureau of Labor Statistics reported today. (See chart 1, 
table A.) This 2017 increase reflects a 2.9-percent increase in output and 
a 2.0-percent increase in the combined inputs of capital and labor. Capital
services grew by 2.2 percent and labor input–which is the combined effect 
of hours worked and labor composition–grew by 1.9 percent. The increase in
multifactor productivity followed a 0.6-percent decrease in 2016. 
(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 increased at a 0.8-percent
annual rate in 2017. A 2.7-percent increase in output outpaced a 2.0-percent
increase in the combined inputs of capital and labor in 2017. 
(See table A, table 2.)
 
2017 Multifactor Productivity Trends

Multifactor productivity in the private nonfarm business sector grew at
an average annual rate of 0.8 percent from 1987 to 2017. For the 2007-17 
period, multifactor productivity grew at an average annual rate of 0.5 percent
as combined inputs increased 1.1 percent and output increased 1.6 percent. 
The increase in combined inputs reflected a 1.7-percent average annual percent
increase in capital services along with an 0.8-increase in labor input. 
(See table A.)

In the 2007-17 period, labor productivity decelerated to an average annual 
rate of 1.2 percent, as compared to the average annual rate of 2.7 percent 
in the 2000-07 period. 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. 

Between the 2000-07 and 2007-17 periods, labor productivity growth declined
1.5 percentage points, reflecting a 1.2-percent slowdown in the growth of 
output. Additionally, the 2007-2017 period experienced decelerations in 
multifactor productivity growth, the contribution of capital intensity, 
and the contribution of labor composition. The contribution of capital 
intensity grew 0.5 percentage points in the 2007-2017 period, the slowest
growth, as viewed over the 1987-2017 sub periods. (See chart 2.) Multifactor
productivity increased 0.5 percentage points in the 2007-17 period compared 
to a growth rate of 1.4 percent in the 2000-07 period, a 0.9-percentage point
decline.  (See chart 2, table B.) The contributions of labor composition
slightly decelerated by 0.1 percentage points between the 2000-07 period
and the 2007-17 period, to 0.2 percent. (See chart 2, table B.) 

2015-16 Revisions

In 2016, the multifactor productivity growth rate in the private nonfarm
business sector was revised downward from an average annual rate of -0.2 
percent to an average annual rate of -0.6 percent due to a downward revision
to output of -0.2 percent and an upward revision to combined inputs of 
0.2 percent. In 2015, the multifactor productivity growth rate in the 
private nonfarm business sector was revised upward from an average annual
rate of 0.6 percent to an average annual rate of 0.9 percent due to revisions
in output. (See table D.)

2016 Capital Services 

The deceleration of capital services since 2000 is largely due to a
deceleration in the growth of equipment and intellectual property products.
The average annual rate of growth of equipment decelerated from the peak 
in the 1995-2000 period, from 9.1 percent to 2.2 percent in the more recent
2007-16 period.  The average annual rate of growth of intellectual property 
products decelerated from a peak of 8.4 percent in 1995-2000 to 3.2 percent
in 2007-16. (See chart 3, table C.)

Within equipment, growth in computers decelerated from a 13.5-percent average
annual rate in 2000-07 to 4.8 percent in 2007-16. (See chart 4, table C.) 
Within intellectual property products, software decelerated from a 7.7-percent
average annual rate of growth in 2000-07 period to 3.8 percent in 2007-16. 
(See chart 5, table C.) 

In 2016, the annual growth of computers decreased for the first time in the
series, to -0.1 percent. Computers steadily accelerated from 1992 to 1999. 
From 2008 forward, the annual growth in computers steadily slowed until the
2016 decline of -0.1 percent. Communications equipment is defined as 
telecommunication parts and equipment that send and receive information. From 
1994 to 2000, communications equipment annual growth steadily accelerated.
After reaching a peak of 14.7-percent annual growth in 2000, growth has 
slowed but remains positive in communication equipment. Starting in 2012, 
the annual growth in communication equipment began to outpace the annual 
growth in computers for the first time in the series. (See chart 6.) 
 
Table A.   Productivity, output, and inputs in the private nonfarm business
and private business sectors for selected periods,1987-2017

Compound annual growth rates


                              1987- 1987- 1990- 1995- 2000- 2007- 2015- 2016-
                              2017  1990  1995  2000  2007  2017  2016  2017

Private nonfarm business1

Productivity
  Multifactor Productivity2    0.8   0.5   0.4   1.3   1.4   0.5  -0.6   0.9
  Labor productivity3          1.9   1.4   1.7   2.7   2.7   1.2   0.0   1.2
  Output per unit of
    capital                   -0.5  -0.6  -0.6  -0.9  -0.5  -0.1  -1.1   0.6


Output                         2.8   3.2   3.0   5.0   2.8   1.6   1.5   2.9
Combined inputs4               2.0   2.8   2.5   3.7   1.4   1.1   2.1   2.0
   Labor input5                1.4   2.2   2.0   2.5   0.5   0.8   1.8   1.9
     Hours                     0.9   1.8   1.3   2.2   0.1   0.4   1.5   1.6
     Labor Composition6        0.4   0.4   0.7   0.3   0.4   0.4   0.3   0.3
   Capital services            3.3   3.9   3.5   6.0   3.3   1.7   2.5   2.2
Analytic ratio
   Capital intensity7          2.4   2.0   2.2   3.7   3.2   1.3   1.1   0.6


Private business1

Productivity
  Multifactor Productivity2    0.9   0.6   0.4   1.5   1.4   0.5  -0.5   0.8
  Labor productivity3          2.0   1.6   1.6   2.9   2.7   1.2   0.1   1.2
  Output per unit of
    capital                   -0.4  -0.5  -0.4  -0.7  -0.4  -0.1  -0.9   0.5


Output                         2.8   3.2   2.9   5.1   2.8   1.6   1.6   2.7
Combined inputs4               2.0   2.7   2.5   3.5   1.4   1.1   2.0   2.0
   Labor input5                1.3   2.1   2.1   2.4   0.5   0.8   1.8   1.8
     Hours                     0.9   1.6   1.3   2.1   0.1   0.4   1.5   1.5
     Labor Composition6        0.4   0.4   0.7   0.3   0.4   0.4   0.3   0.3
   Capital services            3.2   3.8   3.4   5.8   3.2   1.7   2.5   2.2
Analytic ratio
   Capital intensity7          2.3   2.1   2.0   3.7   3.2   1.3   1.0   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,1987-2017

Compound annual growth rates



                    1987- 1987- 1987- 1990- 1995- 2000- 2007- 2007- 2015- 2016-
                    2016  2017* 1990  1995  2000  2007  2016  2017* 2016  2017*

Private nonfarm 
   business1

Labor productivity2  1.9   1.9   1.4   1.7   2.7   2.7   1.2   1.2   0.0   1.2

Contribution of
capital intensity3   0.8   0.8   0.7   0.7   1.2   1.1   0.5   0.5   0.4   0.2

   Contribution of
   information 
   processing 
   equipment(IPE)4   0.3    NA   0.3   0.3   0.6   0.3   0.1    NA   0.1    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   0.3   0.3   0.1    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   0.1    NA

Contribution of 
labor composition7   0.3   0.3   0.3   0.5   0.2   0.3   0.2   0.2   0.2   0.2

Multifactor 
productivity8        0.8   0.8   0.5   0.4   1.3   1.4   0.4   0.5  -0.6   0.9

  Contribution of 
  R&D to 
  multifactor 
  productivity 


Private business1

Labor productivity2  2.0   2.0   1.6   1.6   2.9   2.7   1.2   1.2   0.1   1.2

Contribution of
capital intensity3   0.8   0.8   0.7   0.7   1.2   1.1   0.5   0.5   0.4   0.3

   Contribution of
   information 
   processing 
   equipment(IPE)4   0.3    NA   0.3   0.3   0.6   0.3   0.1    NA   0.1    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   0.3   0.3   0.1    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   0.1    NA

Contribution of 
labor composition7   0.3   0.3   0.3   0.5   0.2   0.3   0.2   0.2   0.2   0.2

Multifactor 
productivity8        0.9   0.9   0.6   0.4   1.5   1.4   0.5   0.5  -0.5   0.8

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

Compound annual growth rates

                        1987-   1987-   1990-   1995-   2000-   2007-   2015-
                        2016    1990    1995    2000    2007    2016    2016

Private nonfarm business1

All Assets               3.3     3.9     3.5     6.0     3.3     1.7     2.5

  Equipment              4.5     3.9     4.3     9.1     4.6     2.2     3.4

    Information
    Processing
    Equipment (IPE)      8.8     8.8     8.5    18.6     8.6     4.0     3.3

      Computers &
      related equipment 16.1    18.7    17.2    40.6    13.5     4.8    -0.1

      Communication
      equipment          7.0     6.2     5.3    10.7     8.5     5.0     6.0

      Other IPE          2.4     2.0     3.2     3.3     2.3     1.7     2.7

    All other equipment  2.5     1.7     2.2     4.8     2.8     1.4     3.4

  Structures             1.6     2.9     2.0     2.2     1.2     0.9     1.1

  Intellectual property
  products (IPP)         5.8     8.3     7.2     8.4     5.1     3.2     4.4

      Research
         &    
      Development        3.8     5.6     4.2     4.6     2.9     3.1     3.3

      Software          10.1    18.5    15.0    15.9     7.7     3.8     6.2

      Artistic
      Originals          3.3     3.9     3.6     4.1     3.6     2.2     2.0

  Rental residential     1.2     1.9     0.9     1.8     2.2    -0.1     0.4
  capital

  Inventories            2.6     3.4     2.3     4.4     2.3     1.9     3.2

  Land                   0.6     1.5     1.3     1.3     0.7    -0.5     0.8

Private business1

All Assets               3.3     3.8     3.4     5.8     3.2     1.6     2.5

  Equipment              4.4     3.6     4.1     9.0     4.6     2.2     3.4

    Information
    Processing
    Equipment (IPE)      8.8     8.8     8.5    18.6     8.6     4.0     3.4

      Computers &
      related equipment 16.1    18.7    17.2    40.6    13.5     4.8    -0.1

      Communication
      equipment          7.0     6.2     5.3    10.7     8.5     5.0     6.0

      Other IPE          2.6     2.0     3.2     3.4     2.5     2.0     2.9

    All other equipment  2.4     1.4     2.0     4.7     2.8     1.5     3.4

  Structures             1.6     2.8     1.9     2.1     1.2     0.9     1.1

  Intellectual property
  products (IPP)         5.8     8.3     7.2     8.4     5.1     3.2     4.4

      Research
         &    
      Development        3.8     5.6     4.2     4.6     2.9     3.1     3.3

      Software          10.1    18.5    15.0    15.9     7.7     3.8     6.2

      Artistic
      Originals          3.3     3.9     3.6     4.1     3.6     2.2     2.0

  Rental residential     1.2     1.9     0.9     1.8     2.2    -0.1     0.4
  capital

  Inventories            2.5     3.0     2.3     4.2     2.2     1.8     3.1

  Land                   0.6     3.0     1.1     0.9     0.7    -0.7     0.4

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 2015-2016 and 2014-2015 periods                                            

                                                                               
                                                           Inputs              
                                                                               
                          Multifactor   Real value-  Combined         Capital 
  Sector                  productivity1 added output inputs2   Labor3 services
                                                                               
              Annual percent change, 2015-2016                                 
Private nonfarm business                                                       
 Previous                  -0.2           1.7          1.9       1.6    2.4   
 Revised                   -0.6           1.5          2.1       1.8    2.5   
Private business                                                               
 Previous                  -0.1           1.8          1.9       1.6    2.3   
 Revised                   -0.5           1.6          2.0       1.8    2.5   
                                                                               
              Annual percent change, 2014-2015                                 
Private nonfarm business                                                       
 Previous                   0.6           3.2          2.5       2.6    2.5   
 Revised                    0.9           3.5          2.5       2.4    2.6   
Private business                                                               
 Previous                   0.5           3.2          2.6       2.7    2.4   
 Revised                    0.9           3.5          2.6       2.6    2.5   
                                                                               
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, custom, and own-account software. 
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. 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 1, 2018 “Productivity and Costs” news release
(USDL-18-0153).

The estimates of 2016 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 1, 2018 “Productivity and Costs” news release (USDL-18-0153).
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. 

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 74 percent of GDP in
2016. 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 January 29, 2018. The estimates of 2016 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 February 1, 2018 “Productivity and Costs” news release 
(USDL-18-0153). 
 
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 1987-2017 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    1.6     0.7     1.1     4.6     3.2     3.9     3.4       1.0
1989    0.9    -0.5     0.0     3.7     3.4     4.2     3.7       1.4

1990    1.8    -1.9     0.3     1.5     0.1     3.5     1.2       3.8
1991    1.8    -3.6    -0.7    -0.5    -1.3     3.2     0.2       5.6
1992    4.4     1.3     3.0     4.0     0.2     2.7     1.0       3.0
1993    0.2    -0.3    -0.5     3.2     3.8     3.5     3.7       0.5
1994    0.8     0.8     0.5     4.6     4.3     3.8     4.2       0.0

1995    1.2    -0.9     0.0     3.6     3.0     4.5     3.5       2.2
1996    2.1    -0.3     1.1     4.6     2.7     4.9     3.5       2.5
1997    1.9    -0.4     0.9     5.2     3.6     5.6     4.3       2.3
1998    3.0    -0.9     1.5     5.3     2.6     6.3     3.8       3.9
1999    3.7    -1.0     1.8     5.6     2.4     6.7     3.8       4.8

2000    3.0    -2.0     1.3     4.4     1.4     6.5     3.1       5.1
2001    2.9    -3.8     0.5     0.9    -1.6     4.8     0.4       7.0
2002    4.5    -1.5     2.0     1.8    -1.9     3.4    -0.2       6.1
2003    3.7     0.4     2.1     3.2     0.1     2.8     1.0       3.3
2004    3.1     1.9     2.6     4.5     1.5     2.6     1.9       1.2

2005    2.1     0.6     1.5     3.8     1.7     3.2     2.2       1.5
2006    0.9    -0.2     0.3     3.3     2.6     3.4     2.9       1.1
2007    1.7    -0.6     0.5     2.4     1.2     3.0     1.9       2.3
2008    0.8    -3.7    -1.3    -1.3    -1.4     2.5     0.0       4.7
2009    3.4    -4.8    -0.4    -4.1    -6.2     0.7    -3.7       8.5

2010    3.3     3.3     3.3     3.2    -0.1     0.0    -0.1       0.0
2011    0.1     1.0     0.2     2.2     2.6     1.2     2.0      -0.9
2012    0.8     1.8     0.9     3.1     2.7     1.3     2.2      -0.9
2013    0.3     0.1     0.1     2.1     2.0     1.9     2.0       0.1
2014    1.0     1.0     1.0     3.3     2.4     2.3     2.4       0.0

2015    1.3     0.8     0.9     3.5     2.4     2.6     2.5       0.4
2016    0.0    -1.1    -0.6     1.5     1.8     2.5     2.1       1.1
2017    1.2     0.6     0.9     2.9     1.9     2.2     2.0       0.6

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



Table 2. Private business sector: productivity and related measures
for the 1987-2017 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     0.3     0.9     4.3     3.1     3.9     3.4       1.2
1989    1.1    -0.3     0.3     3.8     3.3     4.1     3.6       1.4

1990    2.1    -1.7     0.5     1.6    -0.1     3.3     1.1       3.8
1991    1.8    -3.4    -0.7    -0.5    -1.2     3.0     0.2       5.3
1992    4.6     1.7     3.2     4.2     0.3     2.5     1.0       2.9
1993    0.2    -0.4    -0.6     2.9     3.6     3.4     3.6       0.6
1994    0.7     1.1     0.5     4.9     4.7     3.7     4.4      -0.4

1995    0.8    -1.1    -0.3     3.2     3.0     4.3     3.5       1.9
1996    2.5     0.0     1.4     4.7     2.5     4.7     3.3       2.5
1997    2.2    -0.1     1.1     5.3     3.4     5.4     4.1       2.3
1998    3.1    -0.9     1.5     5.2     2.4     6.1     3.6       4.0
1999    3.9    -0.9     1.9     5.6     2.2     6.5     3.6       4.8

2000    3.1    -1.7     1.4     4.5     1.4     6.3     3.0       4.9
2001    3.0    -3.7     0.4     0.8    -1.7     4.7     0.3       7.0
2002    4.4    -1.3     2.0     1.8    -1.9     3.2    -0.2       5.8
2003    3.9     0.6     2.3     3.2     0.0     2.6     0.9       3.3
2004    3.2     1.9     2.6     4.5     1.4     2.6     1.8       1.3

2005    2.1     0.6     1.5     3.8     1.7     3.3     2.3       1.5
2006    1.0    -0.2     0.4     3.2     2.5     3.5     2.9       1.2
2007    1.5    -0.7     0.4     2.2     1.2     2.9     1.8       2.2
2008    0.9    -3.4    -1.2    -1.2    -1.3     2.3     0.0       4.4
2009    3.5    -4.4    -0.3    -3.9    -6.1     0.6    -3.7       8.3

2010    3.3     3.2     3.3     3.2    -0.1     0.0    -0.1       0.0
2011    0.0     0.8     0.1     2.1     2.6     1.3     2.1      -0.8
2012    0.6     1.5     0.7     2.9     2.7     1.4     2.2      -0.8
2013    0.7     0.3     0.4     2.3     1.8     1.9     1.9       0.3
2014    0.9     1.0     0.9     3.3     2.5     2.2     2.4      -0.2

2015    1.2     1.0     0.9     3.5     2.6     2.5     2.6       0.2
2016    0.1    -0.9    -0.5     1.6     1.8     2.5     2.0       1.0
2017    1.2     0.5     0.8     2.7     1.8     2.2     2.0       0.7

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



Table 3. Private nonfarm business sector: indexes of productivity and related
measures, 1987-2017 period1

Indexes 2009=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    61.4    123.5   83.7    53.5    78.0    43.3    63.9      49.7
1988    62.4    124.4   84.7    55.9    80.5    45.0    66.1      50.2
1989    62.9    123.7   84.7    58.0    83.2    46.8    68.5      50.8

1990    64.0    121.4   84.9    58.9    83.3    48.5    69.3      52.8
1991    65.2    117.0   84.3    58.5    82.3    50.0    69.4      55.7
1992    68.1    118.6   86.8    60.9    82.5    51.4    70.2      57.4
1993    68.2    118.2   86.4    62.9    85.6    53.2    72.8      57.7
1994    68.7    119.1   86.8    65.8    89.3    55.2    75.8      57.7

1995    69.6    118.0   86.8    68.1    92.0    57.7    78.5      59.0
1996    71.0    117.6   87.7    71.2    94.5    60.5    81.2      60.4
1997    72.4    117.2   88.5    74.9    97.9    63.9    84.6      61.8
1998    74.6    116.2   89.8    78.9   100.5    67.9    87.9      64.2
1999    77.4    115.0   91.4    83.3   102.8    72.5    91.2      67.3

2000    79.7    112.7   92.5    87.0   104.3    77.2    94.0      70.7
2001    82.0    108.4   93.0    87.7   102.6    80.9    94.3      75.6
2002    85.6    106.8   94.8    89.3   100.6    83.6    94.1      80.2
2003    88.8    107.2   96.9    92.1   100.8    85.9    95.1      82.9
2004    91.6    109.2   99.4    96.2   102.3    88.1    96.8      83.9

2005    93.5    109.9  100.9    99.9   104.0    90.9    99.0      85.1
2006    94.4    109.7  101.3   103.2   106.8    94.1   101.9      86.0
2007    95.9    109.0  101.8   105.6   108.1    96.9   103.8      88.0
2008    96.7    105.0  100.4   104.3   106.6    99.3   103.8      92.1
2009   100.0    100.0  100.0   100.0   100.0   100.0   100.0     100.0

2010   103.3    103.3  103.3   103.2    99.9   100.0    99.9     100.0
2011   103.4    104.3  103.5   105.5   102.5   101.1   102.0      99.1
2012   104.3    106.2  104.5   108.8   105.3   102.5   104.2      98.2
2013   104.5    106.4  104.6   111.1   107.4   104.4   106.2      98.3
2014   105.6    107.5  105.6   114.8   109.9   106.8   108.7      98.3

2015   106.9    108.4  106.6   118.8   112.6   109.6   111.5      98.7
2016   106.9    107.2  105.9   120.5   114.6   112.4   113.8      99.7
2017   108.2    107.9  106.8   123.9   116.8   114.9   116.1     100.4

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



Table 4. Private business sector: indexes of productivity and related
measures, 1987-2017 period1

Indexes 2009=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    60.6    120.2   82.5    53.4    78.8    44.4    64.7      50.4
1988    61.5    120.6   83.3    55.7    81.2    46.2    66.9      51.0
1989    62.2    120.3   83.5    57.8    83.9    48.1    69.3      51.7

1990    63.4    118.2   83.9    58.8    83.9    49.7    70.0      53.7
1991    64.6    114.2   83.4    58.5    82.8    51.2    70.1      56.5
1992    67.5    116.1   86.0    60.9    83.1    52.5    70.8      58.1
1993    67.6    115.6   85.5    62.7    86.1    54.2    73.3      58.5
1994    68.1    116.9   85.9    65.8    90.1    56.2    76.6      58.2

1995    68.7    115.6   85.6    67.8    92.9    58.7    79.2      59.4
1996    70.4    115.6   86.8    71.0    95.2    61.4    81.8      60.8
1997    71.9    115.5   87.8    74.8    98.5    64.7    85.2      62.2
1998    74.1    114.5   89.1    78.7   100.8    68.7    88.3      64.7
1999    77.0    113.6   90.8    83.1   103.0    73.2    91.5      67.8

2000    79.3    111.6   92.1    86.8   104.5    77.8    94.2      71.1
2001    81.7    107.5   92.6    87.5   102.7    81.4    94.5      76.0
2002    85.3    106.0   94.4    89.1   100.8    84.0    94.3      80.4
2003    88.6    106.6   96.6    91.9   100.8    86.2    95.2      83.1
2004    91.5    108.7   99.2    96.1   102.3    88.5    96.9      84.2

2005    93.4    109.3  100.7    99.8   104.0    91.3    99.1      85.5
2006    94.3    109.0  101.1   103.1   106.7    94.5   102.0      86.5
2007    95.8    108.3  101.5   105.3   107.9    97.2   103.8      88.5
2008    96.6    104.7  100.3   104.1   106.5    99.4   103.8      92.3
2009   100.0    100.0  100.0   100.0   100.0   100.0   100.0     100.0

2010   103.3    103.2  103.3   103.2    99.9   100.0    99.9     100.0
2011   103.3    104.1  103.4   105.4   102.4   101.3   102.0      99.2
2012   103.9    105.6  104.1   108.5   105.2   102.7   104.2      98.4
2013   104.6    106.0  104.5   111.0   107.1   104.7   106.2      98.7
2014   105.5    107.1  105.4   114.6   109.8   107.0   108.7      98.6

2015   106.8    108.1  106.4   118.6   112.6   109.7   111.5      98.7
2016   106.8    107.2  105.9   120.5   114.6   112.4   113.8      99.7
2017   108.1    107.7  106.7   123.8   116.7   114.9   116.0     100.3

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 21, 2018