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Economic News Release
PRINT:Print

Multifactor Productivity Trends News Release

For release 10:00 am    (ET) Tuesday, March 23, 2021	USDL-21-0547
Technical information:	(202) 691-5606  •  mfpweb@bls.gov  •  www.bls.gov/mfp
Media contact:	        (202) 691-5902  •  PressOffice@bls.gov


MULTIFACTOR PRODUCTIVITY TRENDS – 2020 

Private nonfarm business sector multifactor productivity decreased 1.7 percent 
in 2020, the U.S. Bureau of Labor Statistics reported today. (See table A.) 
This 2020 decrease reflects a 4.2-percent decrease in output and a 2.5-percent 
decrease in the combined inputs of capital and labor. Capital services grew by
2.4 percent and labor input–which is the combined effect of hours worked and 
labor composition–decreased by 5.2 percent. (See table 1.)

Multifactor productivity (MFP) 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
workers. 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 decreased 1.7 percent 
in 2020, as output decreased 4.1 percent and combined inputs decreased 2.4 
percent. (See table A, table 2.) 

Multifactor Productivity Trends

The 1.7-percent decline in nonfarm private business sector MFP in 2020 was the
result of combined inputs decreasing  (-2.5 percent) less than the decrease
in real value added output (-4.2 percent). The 1.7-percent decline in MFP is 
the largest decline in the measure since the Great Recession period of 2007-09,
which is also the last time both private nonfarm business output and private 
nonfarm business combined inputs decreased. 

The components of combined inputs can be broken down into capital services, 
hours worked, and labor composition. The 2020 capital services growth of 2.4 
percent was similar to the Great Recession’s capital services growth of 2.0 
percent. Hours worked experienced its largest decline since 2009 at 6.5 
percent. Labor composition in 2020 had a record growth of 1.6 percent which 
outpaced the 2007-09 recessionary growth by almost a full percentage point.

Labor Productivity Trends

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 the composition of labor. In 2020, 
private nonfarm business labor productivity increased 2.5 percent, the 
highest since a 3.4-percent increase in 2010. 

For private nonfarm business in 2020, the contribution of capital intensity 
to labor productivity was 3.3 percentage points, the largest contribution 
in the history of the series which began in 1948. 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 is. The 2020 increase in the contribution of capital 
intensity was due to a 6.5-percent decline in hours worked. 

The contribution of labor composition of 1.0 percentage points in 2020 is 
the largest annual contribution to labor productivity since the series began 
in 1948. The labor composition index estimates the effect of shifts in the age,
education, and gender composition of the workforce on hours worked. The 2020 
growth in the contribution of labor composition was again due to the large 
hours decline of 6.5 percent and a shift in the composition of the workforce 
to older and more educated employees.


Capital Services Trends

Capital services in the private nonfarm business sector increased at an average
annual rate of 3.0 percent in 2019, the latest year of available detailed 
capital data. This was the largest single year of growth since 2015 when 
capital services grew 3.1 percent. The high capital services growth in 2019
was driven by intellectual property products and equipment. Intellectual 
property products grew 5.8 percent in 2019, larger than the average annual 
growth rate of 4.5 percent in the 2007-19 business cycle. Equipment grew 3.6 
percent in 2019, slightly higher than the 2007-19 business cycle average annual
growth rate of 3.2 percent. (See table C.)


The 2007-19 business cycle continued the slowdown in capital services growth. 
Its average annual growth rate of 2.4 percent is almost half of the peak
average annual growth rate of 4.7 percent in the 1990-2000 business cycle, 
and 1.1-percentage points lower than the previous 2000-07 business cycle. 
(See table C.)



Table A.   Productivity, output, and inputs in the private nonfarm business
and private business sectors for selected periods,1987-2020

Compound annual growth rates


                              1987- 1987- 1990- 2000- 2007- 2018- 2019-
                              2020  1990  2000  2007  2019  2019  2020

Private nonfarm business1

Productivity
  Multifactor Productivity2    0.7   0.4   1.0   1.4   0.5   0.7  -1.7
  Labor productivity3          2.0   1.4   2.2   2.7   1.4   1.8   2.5
  Output per unit of
    capital                   -0.7  -0.5  -0.6  -0.6  -0.4  -0.5  -6.4


Output                         2.7   3.2   4.0   2.9   2.0   2.5  -4.2
Combined inputs4               1.9   2.8   3.0   1.5   1.5   1.8  -2.5
   Labor input5                1.2   2.3   2.2   0.5   0.9   1.0  -5.2
     Hours                     0.7   1.8   1.7   0.1   0.5   0.7  -6.5
     Labor Composition6        0.5   0.5   0.5   0.4   0.4   0.3   1.6
   Capital services            3.4   3.8   4.7   3.5   2.4   3.0   2.4
Analytic ratio
   Capital intensity7          2.7   2.0   2.9   3.4   1.8   2.3   9.5


Private business1

Productivity
  Multifactor Productivity2    0.8   0.5   1.0   1.4   0.5   0.7  -1.7
  Labor productivity3          2.0   1.6   2.3   2.8   1.4   1.8   2.5
  Output per unit of
    capital                   -0.6  -0.5  -0.5  -0.6  -0.3  -0.5  -6.4


Output                         2.7   3.2   4.0   2.9   2.0   2.5  -4.1
Combined inputs4               1.9   2.7   2.9   1.4   1.5   1.8  -2.4
   Labor input5                1.1   2.2   2.2   0.4   0.9   1.0  -5.1
     Hours                     0.7   1.6   1.7   0.1   0.5   0.7  -6.4
     Labor Composition6        0.5   0.5   0.5   0.4   0.4   0.3   1.5
   Capital services            3.3   3.7   4.5   3.4   2.3   3.0   2.4
Analytic ratio
   Capital intensity7          2.7   2.0   2.8   3.4   1.8   2.2   9.5


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,1987-2020

Compound annual growth rates



                    1987- 1987- 1987- 1990- 2000- 2007- 2018- 2019-
                    2019  2020* 1990  2000  2007  2019  2019  2020*

Private nonfarm 
   business1

Labor productivity2  2.0   2.0   1.4   2.2   2.7   1.4   1.8   2.5

Contribution of
capital intensity3   0.9   0.9   0.6   0.9   1.1   0.7   0.9   3.3

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

   Contribution of 
   research and
   development
   (R&D)5            0.1    NA   0.1   0.1   0.1   0.1   0.2    NA

   Contribution of 
   intellectual 
   property 
   products (IPP)
   excluding R&D6    0.2    NA   0.2   0.2   0.2   0.2   0.3    NA

   Contribution of 
   capital 
   services 
   excluding IPP
   and IPE           0.2    NA   0.1   0.2   0.4   0.2   0.3    NA

Contribution of 
labor composition7   0.3   0.3   0.4   0.3   0.2   0.2   0.2   1.0

Multifactor 
productivity8        0.8   0.7   0.4   1.0   1.4   0.5   0.7  -1.7

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


Private business1

Labor productivity2  2.0   2.0   1.6   2.3   2.8   1.4   1.8   2.5

Contribution of
capital intensity3   0.8   0.9   0.7   0.9   1.1   0.7   0.8   3.3

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

   Contribution of 
   research and
   development
   (R&D)5            0.1    NA   0.1   0.1   0.1   0.1   0.2    NA

   Contribution of 
   intellectual 
   property 
   products (IPP)
   excluding R&D6    0.2    NA   0.2   0.2   0.2   0.2   0.3    NA

   Contribution of 
   capital 
   services 
   excluding IPP
   and IPE           0.2    NA   0.1   0.2   0.4   0.2   0.3    NA

Contribution of 
labor composition7   0.3   0.3   0.4   0.3   0.3   0.2   0.2   1.0

Multifactor 
productivity8        0.9   0.8   0.5   1.0   1.4   0.5   0.7  -1.7

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, 1987-2019

Average annual growth rates

    		                1987-   1987-   1990-   2000-   2007-   2018-
		                2019    1990    2000    2007    2019    2019

Private nonfarm business1	
						
All assets		         3.5	 3.8	 4.7	 3.5	 2.4	 3.0

  Equipment		         4.6	 3.8	 6.5	 4.9	 3.2	 3.6
   
    Information 
    Processing 
    Equipment (IPE)	         9.4	 8.5	13.0	 9.5	 6.8	 6.6
	  
      Computers & 
      related equipment	        15.6	18.4	28.1	14.4	 6.1	 5.8
		 
      Communication 
      equipment			 9.1	 6.2	 7.9	 9.7	10.4	 9.6
		 
      Other IPE			 3.0	 2.1	 3.3	 3.2	 2.9	 4.1
	  
    All other equipment	 	 2.5	 1.7	 3.5	 2.9	 1.7	 2.5
	
  Structures		         1.6	 2.9	 2.1	 1.3	 1.0	 1.2
  
  Intellectual property 
  products (IPP)	  	 5.9	 7.8	 7.4	 5.5	 4.5	 5.8
  
      Research 
	     &
      Development	 	 4.5	 5.8	 5.4	 4.2	 3.5	 4.4
	  
      Software			10.3	17.0	13.9	 8.2	 6.8	 8.9
	  
      Artistic 
      Originals			 3.1	 3.8	 3.7	 3.6	 2.0	 2.1
	  
  Rental residential 
  capital			 1.1	 2.0	 1.4	 2.2	 0.1	 0.5
  
  Inventories		  	 2.7	 3.2	 3.5	 2.2	 2.2	 3.4
  
  Land				 0.8 	 1.3	 1.3	 0.7	 0.4	 1.3
							
Private business1				
			
All assets			 3.4	 3.7	 4.5	 3.4	 2.3	 3.0
  
  Equipment			 4.5	 3.5	 6.3	 4.9	 3.2	 3.5
    
	Information
    Processing 
    Equipment (IPE)		 9.5	 8.5	13.0	 9.6	 6.8	 6.6
	
      Computers & 
      related equipment	        15.6	18.4	28.1	14.4	 6.1	 5.8
	  
      Communication
      equipment			 9.1	 6.2	 7.9	 9.7	10.4	 9.6
	  
      Other IPE			 3.1	 2.1	 3.4	 3.3	 3.1	 4.0
      
	All other equipment      2.4	 1.4	 3.3	 2.8     1.8	 2.5
   
   Structures			 1.5	 2.8	 2.0	 1.2	 1.0	 1.2
   
  Intellectual Property 
  Products (IPP)		 5.9	 7.8	 7.4	 5.5	 4.5	 5.8
   
      Research
	     &
      Development		 4.5	 5.8	 5.4	 4.2	 3.5	 4.4
      
	  Software		10.3	17.0	13.9	 8.2	 6.8	 8.9
      
	  Artistic 
      Originals			 3.1	 3.8	 3.7	 3.6	 2.0	 2.1
   
  Rental residential 
  capital	 		 1.1	 2.0	 1.4	 2.2	 0.1	 0.5
  
  Inventories		 	 2.6	 2.7	 3.4	 2.1	 2.1	 3.1
  
  Land				 0.8	 3.0	 1.0	 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 the Technical Notes in this release.


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.

Additional detail on information processing equipment and intellectual property
products are available in table C. 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 61 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 March 4, 2021 “Productivity and Costs” news release 
(www.bls.gov/news.release/archives/ prod2_03042021.htm).


The estimates of 2020 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 March 4, 2021 “Productivity
and Costs” news release (www.bls.gov/news.release/archives/prod2_03042021.htm).
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. 
These cell estimates are smoothed using a three year moving average to address
missing observations and reduce volatility.

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.
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 26, 2021. The estimates of 2020 
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 4, 2021 “Productivity and Costs” news 
release (www.bls.gov/news.release/archives/prod2_ 03042021.htm). 
 
 
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 for the private business and private nonfarm business sector can be 
downloaded at www.bls.gov/mfp/mprdload.htm, including data that links 1948-87
SIC data to NAICS data from 1987 forward. 



Table 1. Private nonfarm business sector: productivity and related measures
for the 1987-2020 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     0.8     1.0     4.6     3.4     3.8     3.5       0.9
1989    0.9    -0.4     0.2     3.7     3.2     4.1     3.5       1.3

1990    1.7    -1.9     0.1     1.5     0.4     3.4     1.4       3.7
1991    1.8    -3.5    -0.4    -0.5    -1.6     3.1    -0.1       5.5
1992    4.4     1.5     2.9     4.0     0.5     2.6     1.1       2.9
1993    0.2    -0.3    -0.4     3.1     3.6     3.4     3.6       0.4
1994    0.8     0.7     0.4     4.6     4.3     3.9     4.1       0.1

1995    1.2    -1.0     0.2     3.5     2.7     4.5     3.3       2.2
1996    2.1    -0.3     1.0     4.5     2.9     4.8     3.5       2.4
1997    1.9    -0.3     0.9     5.1     3.5     5.4     4.2       2.1
1998    3.1    -0.7     1.5     5.4     2.6     6.1     3.8       3.8
1999    3.8    -0.7     2.1     5.7     2.1     6.5     3.5       4.6

2000    3.3    -1.7     1.5     4.7     1.7     6.5     3.2       5.1
2001    2.9    -3.9     0.5     0.9    -1.6     4.9     0.4       7.1
2002    4.4    -1.6     2.0     1.7    -2.0     3.4    -0.3       6.2
2003    3.9     0.4     2.3     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     1.9     3.4     2.4       1.7
2006    1.1    -0.2     0.5     3.5     2.6     3.7     3.0       1.4
2007    1.8    -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    3.8    -4.7     0.2    -3.6    -6.6     1.1    -3.8       8.9

2010    3.4     2.5     2.7     3.3     0.5     0.8     0.6       0.9
2011   -0.1     0.3    -0.1     2.0     2.4     1.7     2.2      -0.4
2012    0.8     1.2     0.7     3.2     2.7     2.0     2.4      -0.4
2013    0.5    -0.2     0.1     2.3     2.0     2.5     2.2       0.8
2014    0.8     0.4     0.6     3.2     2.5     2.8     2.6       0.5

2015    1.6     0.7     1.1     3.8     2.4     3.1     2.6       0.9
2016    0.4    -1.2    -0.4     1.8     1.7     3.0     2.2       1.6
2017    1.2     0.0     0.5     2.8     1.9     2.7     2.2       1.2
2018    1.5     0.6     0.9     3.5     2.4     2.8     2.6       0.8
2019    1.8    -0.5     0.7     2.5     1.0     3.0     1.8       2.3

2020    2.5    -6.4    -1.7    -4.2    -5.2     2.4    -2.5       9.5

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



Table 2. Private business sector: productivity and related measures
for the 1987-2020 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     3.4       1.1
1989    1.1    -0.2     0.4     3.8     3.1     4.0     3.4       1.3

1990    2.0    -1.6     0.4     1.6     0.2     3.2     1.2       3.7
1991    1.7    -3.4    -0.5    -0.5    -1.5     2.9    -0.1       5.3
1992    4.6     1.8     3.1     4.2     0.5     2.4     1.1       2.8
1993    0.1    -0.4    -0.5     2.9     3.4     3.3     3.4       0.5
1994    0.6     1.0     0.4     4.8     4.7     3.8     4.4      -0.4

1995    0.8    -1.1    -0.1     3.1     2.7     4.3     3.2       1.9
1996    2.4     0.1     1.3     4.7     2.6     4.6     3.3       2.4
1997    2.1     0.0     1.2     5.2     3.4     5.2     4.0       2.1
1998    3.1    -0.7     1.6     5.2     2.5     5.9     3.6       3.8
1999    4.0    -0.6     2.3     5.7     1.9     6.3     3.4       4.6

2000    3.4    -1.4     1.6     4.8     1.7     6.3     3.2       4.9
2001    3.0    -3.8     0.5     0.8    -1.8     4.8     0.3       7.1
2002    4.4    -1.4     2.0     1.8    -1.9     3.2    -0.3       5.9
2003    4.0     0.5     2.5     3.3    -0.2     2.8     0.8       3.4
2004    3.0     1.5     2.3     4.3     1.5     2.8     2.0       1.5

2005    2.2     0.5     1.5     4.0     1.9     3.5     2.4       1.8
2006    1.2    -0.3     0.4     3.5     2.5     3.8     3.0       1.5
2007    1.7    -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    3.9    -4.4     0.3    -3.5    -6.5     1.0    -3.8       8.7

2010    3.4     2.5     2.7     3.3     0.5     0.8     0.6       0.9
2011   -0.1     0.1    -0.2     1.9     2.4     1.8     2.2      -0.3
2012    0.7     1.0     0.6     3.1     2.7     2.1     2.5      -0.3
2013    0.9     0.0     0.4     2.5     1.8     2.5     2.1       0.9
2014    0.7     0.4     0.5     3.2     2.6     2.7     2.7       0.3

2015    1.5     0.9     1.1     3.8     2.5     2.9     2.7       0.6
2016    0.4    -1.0    -0.3     1.9     1.7     2.9     2.2       1.4
2017    1.2     0.0     0.5     2.7     1.8     2.7     2.2       1.2
2018    1.6     0.7     1.0     3.5     2.3     2.8     2.5       0.9
2019    1.8    -0.5     0.7     2.5     1.0     3.0     1.8       2.2

2020    2.5    -6.4    -1.7    -4.1    -5.1     2.4    -2.4       9.5

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



Table 3. Private nonfarm business sector: indexes of productivity and related
measures, 1987-2020 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    58.1    118.6   79.8    48.5    74.4    40.9    60.8      49.0
1988    59.0    119.5   80.7    50.8    76.8    42.5    62.9      49.4
1989    59.5    119.0   80.8    52.6    79.3    44.2    65.1      50.0

1990    60.6    116.8   80.9    53.4    79.6    45.7    66.0      51.9
1991    61.7    112.6   80.5    53.1    78.3    47.2    66.0      54.7
1992    64.4    114.3   82.8    55.3    78.7    48.4    66.7      56.4
1993    64.5    113.9   82.5    57.0    81.6    50.0    69.1      56.6
1994    65.0    114.7   82.8    59.6    85.1    52.0    72.0      56.6

1995    65.7    113.6   83.0    61.7    87.3    54.3    74.4      57.9
1996    67.1    113.3   83.8    64.5    89.8    56.9    77.0      59.3
1997    68.4    113.0   84.6    67.8    93.0    60.0    80.2      60.5
1998    70.5    112.2   85.9    71.5    95.5    63.7    83.2      62.8
1999    73.2    111.4   87.7    75.5    97.5    67.8    86.1      65.7

2000    75.6    109.5   89.0    79.1    99.1    72.2    88.9      69.0
2001    77.8    105.3   89.4    79.8    97.5    75.8    89.3      73.9
2002    81.3    103.6   91.2    81.2    95.5    78.4    89.0      78.5
2003    84.4    104.0   93.4    83.9    95.5    80.7    89.8      81.2
2004    86.8    105.5   95.4    87.4    97.0    82.9    91.6      82.3

2005    88.7    106.0   96.8    90.9    98.8    85.7    93.8      83.7
2006    89.7    105.8   97.3    94.1   101.4    88.9    96.7      84.8
2007    91.4    104.9   97.8    96.4   102.7    91.9    98.6      87.1
2008    92.4    100.9   96.7    95.4   101.2    94.6    98.7      91.6
2009    96.0     96.1   96.8    92.0    94.6    95.7    95.0      99.8

2010    99.3     98.6   99.4    95.0    95.0    96.4    95.6     100.7
2011    99.2     98.8   99.3    96.9    97.3    98.1    97.6     100.4
2012   100.0    100.0  100.0   100.0   100.0   100.0   100.0     100.0
2013   100.5     99.8  100.1   102.3   102.0   102.5   102.2     100.8
2014   101.4    100.1  100.6   105.5   104.6   105.4   104.9     101.2

2015   103.0    100.8  101.8   109.5   107.1   108.6   107.7     102.1
2016   103.4     99.6  101.4   111.5   108.9   111.9   110.1     103.7
2017   104.6     99.7  101.9   114.6   111.0   115.0   112.5     104.9
2018   106.1    100.3  102.8   118.6   113.6   118.3   115.4     105.8
2019   108.0     99.8  103.6   121.6   114.8   121.9   117.4     108.3

2020   110.7     93.4  101.8   116.5   108.8   124.8   114.5     118.6

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



Table 4. Private business sector: indexes of productivity and related
measures, 1987-2020 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    115.8   78.9    48.6    75.2    42.0    61.6      49.6
1988    58.4    116.3   79.6    50.7    77.6    43.6    63.7      50.2
1989    59.0    116.1   79.9    52.7    80.0    45.4    65.9      50.8

1990    60.2    114.2   80.2    53.5    80.2    46.8    66.7      52.7
1991    61.3    110.4   79.8    53.2    78.9    48.2    66.7      55.5
1992    64.1    112.4   82.3    55.5    79.3    49.4    67.4      57.1
1993    64.2    111.9   81.9    57.1    82.0    51.0    69.7      57.3
1994    64.6    113.1   82.3    59.8    85.9    52.9    72.7      57.1

1995    65.1    111.8   82.2    61.7    88.2    55.2    75.1      58.2
1996    66.7    111.8   83.3    64.6    90.5    57.7    77.6      59.6
1997    68.1    111.8   84.2    67.9    93.6    60.8    80.7      60.9
1998    70.2    111.1   85.5    71.5    95.9    64.4    83.6      63.2
1999    73.0    110.5   87.5    75.6    97.8    68.4    86.4      66.1

2000    75.5    108.9   88.9    79.2    99.4    72.8    89.2      69.4
2001    77.8    104.8   89.3    79.9    97.7    76.2    89.4      74.3
2002    81.2    103.3   91.1    81.3    95.8    78.7    89.2      78.6
2003    84.5    103.8   93.4    84.0    95.6    80.9    89.9      81.3
2004    87.0    105.4   95.6    87.6    97.1    83.1    91.7      82.5

2005    88.9    105.9   97.0    91.1    98.9    86.0    93.9      84.0
2006    90.0    105.6   97.4    94.3   101.4    89.3    96.7      85.2
2007    91.5    104.7   97.9    96.5   102.6    92.2    98.6      87.4
2008    92.6    100.9   96.8    95.5   101.2    94.6    98.7      91.7
2009    96.2     96.5   97.1    92.2    94.6    95.5    95.0      99.7

2010    99.4     98.9   99.7    95.2    95.1    96.3    95.5     100.6
2011    99.3     99.0   99.4    97.0    97.4    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    100.0  100.4   102.5   101.8   102.5   102.1     100.9
2014   101.6    100.4  100.9   105.7   104.5   105.3   104.8     101.2

2015   103.1    101.3  102.0   109.8   107.1   108.4   107.6     101.8
2016   103.6    100.2  101.7   111.8   109.0   111.6   110.0     103.3
2017   104.8    100.2  102.2   114.9   111.0   114.6   112.4     104.5
2018   106.5    100.9  103.2   118.9   113.5   117.8   115.2     105.5
2019   108.3    100.4  104.0   121.9   114.7   121.3   117.2     107.9

2020   111.0     94.0  102.2   116.8   108.8   124.3   114.4     118.1

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 23, 2021