Internet address: http://www.bls.gov USDL 09-0222
Technical information: (202) 691-5654 For Release: 10:00 A.M. EST
Media contact: (202) 691-5902 Tuesday, March 3, 2009
INTERNATIONAL COMPARISONS OF MANUFACTURING PRODUCTIVITY AND UNIT
LABOR COST TRENDS 2007, REVISED
Manufacturing labor productivity increased in 2007 in 14 of the
17 economies compared by the U.S. Department of Labor's Bureau of
Labor Statistics. The Republic of Korea and Taiwan had the largest
productivity increases of 8.7 percent each. The United States
productivity increase of 4.7 percent was the fourth largest.
Singapore, included for the first time in these comparisons, had the
steepest decline (-4.0 percent) of the three economies where
productivity declined. (See chart 1.)
Over the 2000-2007 period, of the 17 economies studied, only
Korea, Taiwan, and Sweden had greater productivity growth in
manufacturing than the United States. Average annual growth rates for
selected measures over various time periods are shown in tables A and
B.
The data presented for the United States differ from those
appearing in BLS Productivity and Costs news releases. (See technical
notes.) They also do not reflect the annual benchmark revision of
the BLS Current Employment Statistics program data released on
February 6, 2009.
PRINTED COPY CONTAINS CHART AT THIS POINT:
Chart 1. Percent change in manufacturing output per hour, 2006-
2007
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Changes in unit labor costs can be expressed either in national
currency units or in U.S. dollars. Expressed in national currency
units, manufacturing unit labor costs increased in ten and declined
in seven of the economies in 2007. The decline for the United States
(-1.1 percent) was the fifth steepest decline among the economies
compared. However, expressed in U.S. dollars, manufacturing unit
labor costs increased in 14 of the economies and declined in 3,
including the United States. The U.S. manufacturing sector improved
its competitiveness against all economies compared except Taiwan and
Japan. Declines in the dollar's exchange rate reversed the direction
of movement in four countries and had the largest impact on
Australia, from +3.2 percent increase in unit labor costs in national
currency to +15.0 percent increase in unit labor costs expressed in
U.S. dollars. This difference can be explained by the strong
appreciation of the Australian dollar relative to the U.S. dollar.
(See chart 2.)
PRINTED COPY CONTAINS CHART AT THIS POINT:
Chart 2. Percent change in manufacturing unit labor costs, 2006-
2007
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Table A. Output per hour, hourly compensation, unit labor costs, and related measures
Manufacturing, 17 countries or areas, 2006-2007
Percent change
---------------------------------------------------------------------------------------------------------------
Output Total Hourly Unit Labor Costs
Country per Total Employ- Average compen- compen- National U.S. Exchange
or area Hour Output hours ment hours sation sation currency dollars rate(1)
---------------------------------------------------------------------------------------------------------------
United States 4.7 2.9 -1.7 -1.7 0.0 1.7 3.5 -1.1 -1.1 --
Canada 2.7 -0.9 -3.5 -3.4 -0.1 -0.1 3.6 0.8 6.5 5.6
Australia 1.9 3.3 1.3 1.8 -0.5 6.6 5.3 3.2 15.0 11.4
Japan 3.5 3.6 0.2 0.5 -0.4 -0.1 -0.2 -3.6 -4.8 -1.2
Korea, Republic of 8.7 6.5 -2.1 -1.3 -0.8 5.5 7.8 -0.9 1.8 2.7
Singapore -4.0 5.8 10.2 9.9 0.2 5.6 -4.2 -0.2 5.2 5.4
Taiwan 8.7 10.4 1.5 1.4 0.1 4.6 3.0 -5.2 -6.2 -1.1
Belgium 4.4 2.6 -1.7 -0.9 -0.8 3.5 5.3 0.8 10.1 9.1
Denmark 0.4 3.6 3.2 1.8 1.4 5.9 2.6 2.2 11.7 9.2
France 2.6 1.2 -1.3 -1.3 0.0 1.6 2.9 0.3 9.5 9.1
Germany 4.9 6.1 1.2 1.2 -0.1 2.8 1.6 -3.1 5.7 9.1
Italy -0.5 1.0 1.5 0.9 0.6 3.7 2.1 2.6 12.0 9.1
Netherlands 2.8 3.2 0.4 0.2 0.3 3.4 2.9 0.2 9.3 9.1
Norway -0.2 5.3 5.5 5.0 0.5 10.5 4.8 5.0 15.0 9.5
Spain 3.8 2.8 -1.0 -0.6 -0.4 3.8 4.9 1.0 10.3 9.1
Sweden 0.5 2.3 1.8 0.6 1.2 6.7 4.8 4.2 13.8 9.1
United Kingdom 2.6 0.7 -1.9 -2.2 0.4 -1.2 0.7 -1.9 6.5 8.6
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(1) Value of foreign currency relative to the U.S. dollar.
Additional data available
Annual indexes of the variables shown in table A are estimated
for the time period 1950-2007 and are available at
http://www.bls.gov/ilc/. However, for analytical purposes, the
international comparisons in this release go back to 1979.
For further information, contact the Division of International
Labor Comparison, formerly called the Division of Foreign Labor
Statistics, in the Office of Productivity and Technology by phone at
202-691-5654, by e-mail at ilchelp@bls.gov, or by mail at Bureau of
Labor Statistics, 2 Massachusetts Avenue, NE, Room 2150, Washington,
DC 20212.
Singapore
With this news release, Singapore becomes the seventeenth economy
included in the international comparisons of manufacturing
productivity and unit labor costs. The main source of Singapore's
economic data is the Singapore Department of Statistics. The data
comply with international standards of national accounts and
industrial classification. All provided series: output, employment,
hours, and compensation are available from 1990 forward.
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Manufacturing productivity, output, and labor input
In 2007, manufacturing productivity increased in 14 of the 17
economies compared. The United States increase of 4.7 percent was the
fourth largest among the 17 economies. This increase was slightly
above the 4.0 percent U.S. average annual increase since 1979. Korea
and Taiwan led in productivity growth (+8.7 percent each), followed
by Germany (+4.9 percent). Singapore's productivity decline of 4.0
percent significantly exceeded the declines in Italy and Norway (-
0.5 and -0.2 percent respectively). Among the economies compared,
Singapore also recorded the largest reversal from high manufacturing
productivity growth rates in the nineties to the steepest decline in
2007. (See tables A and B.)
Between 2000 and 2007, productivity gains in the U.S.
manufacturing sector were mainly due to declines in total hours. To a
lesser degree, the productivity gains of the European manufacturing
sectors compared here were also due to declines in total hours. By
contrast, productivity gains in Korea and Taiwan were mainly due to
increases in output.
Manufacturing output increased in 16 of the 17 economies in 2007.
Taiwan was the leader in the growth of output with a +10.4 percent
increase. In 2007, growth in manufacturing output in Germany, Norway,
and Taiwan was noticeably higher than their average annual rates of
increase over the 1979-2007 period, while the U.S. increase remained
at 2.9 percent. Canada was the only economy that had a decline (-0.9
percent) in manufacturing output in 2007.
While 16 of the manufacturing economies had increases in 2007 in
output, 10 had increases in total hours worked. Singapore and Norway
had the largest increases in total hours worked of 10.2 and 5.5
percent, respectively. Canada had the steepest decline (-3.5 percent)
in hours in 2007. The United States and Belgium had the fourth
steepest decline in hours worked (-1.7 percent).
For the period 2000-2007, total hours worked in manufacturing
declined in 16 of the 17 economies. The United Kingdom had the
steepest average annual decline (-3.9 percent), followed by the
United States (-3.1 percent). Singapore was the only economy that
experienced growth (+3.7 percent) in total hours worked in this
period.
In 2007, manufacturing employment increased in 10 of the 17
economies. Singapore had the largest increase in employment (+9.9
percent) - almost double the next largest growth in Norway (+5.0
percent). Canada had the largest decline in employment (-3.4
percent), followed by the United Kingdom (-2.2 percent) and the
United States (-1.7 percent).
Over the 2000-2007 period, the United Kingdom and the United
States experienced the steepest average annual declines in
manufacturing employment (-4.0 and -3.0 percent respectively).
In 2007 average hours worked in manufacturing declined in 7 of
the 17 economies and increased in 8, while the United States and
France showed no change in average hours worked. This compares to 11
economies with declining average annual hours over the 2000-2007
period.
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Manufacturing hourly compensation and unit labor costs
Total labor compensation in manufacturing increased in 14 of the
17 economies in 2007. The largest increases were in Norway (+10.5
percent) and Sweden (+6.7 percent). U. S. compensation rose by 1.7
percent. Total labor compensation declined in the United Kingdom,
Canada and Japan. (See tables A and B.)
Hourly compensation in manufacturing increased also in 15 of the
17 economies in 2007, with Singapore and Japan as the exceptions. The
largest increase was in Korea (+7.8 percent), followed by Australia
and Belgium (+5.3 percent each). The U.S. increase of 3.5 percent in
hourly compensation was below its average annual increase since 1979.
(See tables A and B.)
Expressed in national currencies, unit labor costs increased in
ten economies in 2007 and decreased in seven. The largest increase
occurred in Norway (+5.0 percent) and the largest decline was in
Taiwan (-5.2 percent). Unit labor costs in U.S. manufacturing
decreased by 1.1 percent, compared to an average annual increase of
0.6 percent since 1979.
Expressed in U.S. dollars, manufacturing unit labor costs
increased in 14 economies in 2007 and declined in 3, including the
United States. Steeper declines occurred in Taiwan and Japan. Thus,
the manufacturing sector in the United States improved its cost
competitiveness against all economies compared except Taiwan and
Japan.
The unit labor costs of four economies, Germany, the United
Kingdom, Singapore, and Korea, went from decreases to increases when
computed on a U.S. dollar basis. Australia and Norway had the largest
currency appreciations in 2007. Australia also showed the largest
difference, from +3.2 percent increase in unit labor costs in
national currency to +15.0 percent increase in unit labor costs
expressed in U.S. dollars.
Movements in exchange rates are often the dominant force behind
changes in comparative unit labor costs and international
competitiveness. In 2007, the U.S. dollar weakened against most of
the currencies being compared. The exceptions were the currencies of
Japan and Taiwan, which depreciated against the dollar. This
depreciation of the U.S. dollar against most currencies continues a
trend that began in 2001. In 2007, the dollar fell 9.1 percent
against the euro, following a decline of 0.9 percent in 2006.
-6-
Table B. Output per hour, hourly compensation, unit labor costs, and related measures
Manufacturing, 17 countries or areas, 1979-2007
Average annual rates of change(1)
--------------------------------------------------------------------------------------------------------
Country or area 1979-2007 1979-1990 1990-1995 1995-2000 2000-2007 2005-2006 2006-2007
--------------------------------------------------------------------------------------------------------
Output per hour
United States 4.0 2.8 3.7 5.6 5.0 4.7 4.7
Canada 2.4 2.1 3.4 3.8 1.3 2.2 2.7
Australia 2.2 2.3 1.3 3.4 1.9 1.0 1.9
Japan 3.6 3.8 3.3 3.4 3.7 1.0 3.5
Korea, Republic of NA NA 9.4 10.8 7.6 10.1 8.7
Singapore NA NA 6.9 6.5 1.7 2.4 -4.0
Taiwan 5.8 6.1 4.7 5.6 6.4 6.8 8.7
Belgium 3.4 4.2 3.1 2.4 3.1 3.7 4.4
Denmark 2.4 2.2 2.7 1.8 2.7 4.6 0.4
France 3.8 3.8 3.4 4.6 3.5 4.0 2.6
Germany (2) 3.1 2.1 2.9 3.7 4.3 8.4 4.9
Italy 2.2 3.4 3.8 1.4 -0.2 -0.4 -0.5
Netherlands 3.4 3.3 3.7 3.3 3.2 3.2 2.8
Norway 1.8 1.9 0.1 1.4 3.0 -2.0 -0.2
Spain 2.5 3.3 3.1 0.8 2.1 2.0 3.8
Sweden 4.5 2.1 5.5 6.8 6.0 9.4 0.5
United Kingdom 3.6 4.1 2.8 2.7 4.1 5.1 2.6
Output
United States 2.9 2.2 3.6 5.4 1.8 5.5 2.9
Canada 2.1 1.9 2.2 6.2 -0.2 -0.4 -0.9
Australia 1.5 1.6 0.8 2.6 1.1 -0.9 3.3
Japan 2.7 4.7 0.4 1.2 2.3 3.5 3.6
Korea, Republic of 8.8 10.7 8.2 7.9 6.9 8.5 6.5
Singapore NA NA 8.0 6.7 5.5 11.9 5.8
Taiwan 6.1 7.4 4.4 5.8 5.7 7.2 10.4
Belgium 1.8 2.6 0.6 2.3 1.0 2.8 2.6
Denmark 1.3 1.3 2.1 1.7 0.6 4.1 3.6
France 1.6 1.5 0.6 3.4 1.2 1.1 1.2
Germany (2) 1.4 1.2 -1.0 2.2 2.9 7.3 6.1
Italy 1.5 2.6 1.6 1.2 -0.2 1.2 1.0
Netherlands 2.2 2.4 2.0 3.3 1.4 2.7 3.2
Norway 0.9 -0.5 0.7 1.4 2.9 3.0 5.3
Spain 2.2 2.1 0.6 5.0 1.5 1.9 2.8
Sweden 3.8 1.7 3.8 7.4 4.6 7.9 2.3
United Kingdom 0.7 0.9 0.5 1.3 0.1 1.8 0.7
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Continued on next page
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Table B. Output per hour, hourly compensation, unit labor costs, and related measures
Manufacturing, 17 countries or areas, 1979-2007
Average annual rates of change(1)
--------------------------------------------------------------------------------------------------------
Country or area 1979-2007 1979-1990 1990-1995 1995-2000 2000-2007 2005-2006 2006-2007
--------------------------------------------------------------------------------------------------------
Total hours
United States -1.1 -0.6 -0.1 -0.1 -3.1 0.7 -1.7
Canada -0.3 -0.2 -1.2 2.3 -1.5 -2.5 -3.5
Australia -0.7 -0.7 -0.5 -0.9 -0.8 -1.9 1.3
Japan -0.9 0.8 -2.8 -2.1 -1.4 2.4 0.2
Korea, Republic of NA NA -1.1 -2.6 -0.7 -1.4 -2.1
Singapore NA NA 1.0 0.2 3.7 9.3 10.2
Taiwan 0.3 1.2 -0.3 0.1 -0.6 0.3 1.5
Belgium -1.6 -1.6 -2.4 -0.1 -2.1 -0.9 -1.7
Denmark -1.0 -1.0 -0.7 -0.1 -2.0 -0.4 3.2
France -2.1 -2.2 -2.8 -1.1 -2.3 -2.8 -1.3
Germany (2) -1.6 -0.9 -3.8 -1.4 -1.3 -1.1 1.2
Italy -0.7 -0.8 -2.1 -0.2 -0.1 1.6 1.5
Netherlands -1.1 -0.9 -1.7 0.0 -1.8 -0.5 0.4
Norway -0.8 -2.3 0.6 0.0 -0.1 5.1 5.5
Spain -0.3 -1.2 -2.4 4.1 -0.6 -0.1 -1.0
Sweden -0.7 -0.4 -1.7 0.5 -1.3 -1.4 1.8
United Kingdom -2.8 -3.1 -2.3 -1.4 -3.9 -3.1 -1.9
Employment
United States -1.2 -0.8 -0.5 0.0 -3.0 -0.6 -1.7
Canada -0.4 -0.3 -1.5 2.2 -1.4 -2.7 -3.4
Australia -1.3 -1.3 -2.3 -1.1 -0.7 -1.2 1.8
Japan -0.6 1.0 -1.6 -2.0 -1.5 1.5 0.5
Korea, Republic of NA NA -0.8 -2.5 0.4 0.3 -1.3
Singapore NA NA 0.7 -0.1 3.5 8.6 9.9
Taiwan 0.9 2.0 -0.3 0.4 0.2 1.1 1.4
Belgium -1.5 -1.6 -2.2 -0.6 -1.6 -1.1 -0.9
Denmark -1.0 -0.4 -1.2 -1.2 -1.7 -0.1 1.8
France -1.6 -1.8 -2.5 -0.3 -1.8 -1.9 -1.3
Germany (2) -1.2 -0.1 -4.2 -0.8 -1.0 -0.8 1.2
Italy -0.7 -0.8 -1.9 -0.2 0.2 0.9 0.9
Netherlands -1.0 -0.6 -1.6 0.1 -1.8 -0.6 0.2
Norway -0.9 -2.2 0.4 0.2 -0.4 5.0 5.0
Spain 0.1 -0.7 -2.0 3.3 0.5 -0.2 -0.6
Sweden -1.4 -1.0 -3.5 0.2 -1.4 -0.8 0.6
United Kingdom -2.8 -2.9 -2.7 -1.2 -4.0 -2.7 -2.2
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Continued on next page
-8-
Table B. Output per hour, hourly compensation, unit labor costs, and related measures
Manufacturing, 17 countries or areas, 1979-2007
Average annual rates of change(1)
--------------------------------------------------------------------------------------------------------
Country or area 1979-2007 1979-1990 1990-1995 1995-2000 2000-2007 2005-2006 2006-2007
--------------------------------------------------------------------------------------------------------
Average hours
United States 0.1 0.2 0.4 -0.1 -0.1 1.3 0.0
Canada 0.1 0.1 0.3 0.1 -0.1 0.1 -0.1
Australia 0.6 0.6 1.9 0.3 -0.2 -0.7 -0.5
Japan -0.3 -0.2 -1.3 -0.1 0.1 0.9 -0.4
Korea, Republic of NA NA -0.2 -0.1 -1.1 -1.7 -0.8
Singapore NA NA 0.3 0.3 0.2 0.6 0.2
Taiwan -0.6 -0.8 0.0 -0.3 -0.8 -0.8 0.1
Belgium -0.1 0.0 -0.2 0.5 -0.6 0.2 -0.8
Denmark 0.0 -0.5 0.6 1.1 -0.3 -0.3 1.4
France -0.5 -0.5 -0.3 -0.8 -0.5 -0.9 0.0
Germany (2) -0.4 -0.9 0.4 -0.6 -0.3 -0.2 -0.1
Italy -0.1 0.1 -0.2 0.0 -0.3 0.7 0.6
Netherlands -0.1 -0.2 0.0 -0.1 0.0 0.1 0.3
Norway 0.0 -0.1 0.2 -0.2 0.3 0.1 0.5
Spain -0.4 -0.5 -0.4 0.8 -1.1 0.2 -0.4
Sweden 0.7 0.7 1.9 0.3 0.1 -0.6 1.2
United Kingdom 0.0 -0.2 0.4 -0.1 0.1 -0.4 0.4
Total labor compensation(3): National currency basis
United States 3.5 4.9 3.4 4.5 0.8 4.9 1.7
Canada 4.4 6.5 2.4 5.2 1.9 0.4 -0.1
Australia NA NA 3.2 3.1 4.6 4.8 6.6
Japan 1.7 5.5 0.7 -1.0 -1.4 1.3 -0.1
Korea, Republic of 13.5 19.6 17.6 5.4 7.3 7.0 5.5
Singapore NA NA 8.7 2.4 3.8 6.7 5.6
Taiwan 7.4 13.5 6.8 3.6 1.7 3.5 4.6
Belgium 2.7 4.4 1.3 1.9 1.6 2.7 3.5
Denmark 4.3 7.0 2.3 2.8 2.5 4.4 5.9
France 3.5 6.7 1.6 1.7 1.3 1.9 1.6
Germany (2) 2.7 4.6 2.4 1.6 0.9 3.0 2.8
Italy 6.3 11.6 3.9 2.4 2.9 3.6 3.7
Netherlands 2.8 3.2 2.7 3.4 1.8 2.3 3.4
Norway 5.4 6.4 4.1 5.1 4.9 11.6 10.5
Spain 6.8 10.1 5.5 5.6 3.6 4.2 3.8
Sweden 5.4 8.8 1.9 5.3 2.7 1.5 6.7
United Kingdom 3.8 7.1 1.5 3.3 0.7 3.1 -1.2
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Continued on next page
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Table B. Output per hour, hourly compensation, unit labor costs, and related measures
Manufacturing, 17 countries or areas, 1979-2007
Average annual rates of change(1)
--------------------------------------------------------------------------------------------------------
Country or area 1979-2007 1979-1990 1990-1995 1995-2000 2000-2007 2005-2006 2006-2007
--------------------------------------------------------------------------------------------------------
Hourly compensation(3): National currency basis
United States 4.6 5.5 3.5 4.7 4.0 4.1 3.5
Canada 4.7 6.8 3.6 2.9 3.5 3.1 3.6
Australia NA NA 3.7 4.0 5.5 6.7 5.3
Japan 2.7 4.6 3.6 1.2 0.0 -1.1 -0.2
Korea, Republic of NA NA 18.9 8.1 8.1 8.6 7.8
Singapore NA NA 7.6 2.2 0.1 -2.4 -4.2
Taiwan 7.1 12.1 7.1 3.4 2.3 3.2 3.0
Belgium 4.4 6.1 3.8 2.0 3.8 3.6 5.3
Denmark 5.4 8.1 2.9 2.9 4.7 4.9 2.6
France 5.8 9.1 4.5 2.8 3.7 4.9 2.9
Germany (2) 4.4 5.6 6.4 3.1 2.2 4.1 1.6
Italy 7.1 12.5 6.1 2.7 3.0 2.0 2.1
Netherlands 3.9 4.1 4.5 3.4 3.6 2.8 2.9
Norway 6.3 9.0 3.4 5.2 5.0 6.1 4.8
Spain 7.2 11.4 8.2 1.4 4.2 4.3 4.9
Sweden 6.1 9.1 3.7 4.8 4.1 2.9 4.8
United Kingdom 6.8 10.5 3.9 4.7 4.8 6.4 0.7
Unit labor costs(3): National currency basis
United States 0.6 2.6 -0.2 -0.8 -1.0 -0.6 -1.1
Canada 2.2 4.6 0.3 -0.9 2.2 0.9 0.8
Australia NA NA 2.4 0.5 3.5 5.7 3.2
Japan -0.9 0.8 0.3 -2.2 -3.5 -2.0 -3.6
Korea, Republic of 4.3 8.1 8.7 -2.4 0.4 -1.4 -0.9
Singapore NA NA 0.6 -4.1 -1.6 -4.7 -0.2
Taiwan 1.2 5.6 2.3 -2.1 -3.8 -3.4 -5.2
Belgium 0.9 1.8 0.7 -0.4 0.6 -0.1 0.8
Denmark 2.9 5.7 0.2 1.1 2.0 0.3 2.2
France 1.9 5.1 1.0 -1.7 0.1 0.9 0.3
Germany (2) 1.3 3.3 3.4 -0.5 -2.0 -4.0 -3.1
Italy 4.8 8.8 2.2 1.2 3.1 2.4 2.6
Netherlands 0.5 0.8 0.7 0.1 0.3 -0.4 0.2
Norway 4.4 6.9 3.3 3.7 1.9 8.3 5.0
Spain 4.5 7.8 4.9 0.5 2.0 2.3 1.0
Sweden 1.5 6.9 -1.8 -1.9 -1.9 -5.9 4.2
United Kingdom 3.1 6.2 1.1 1.9 0.6 1.3 -1.9
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Continued on next page
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Table B. Output per hour, hourly compensation, unit labor costs, and related measures
Manufacturing, 17 countries or areas, 1979-2007
Average annual rates of change(1)
--------------------------------------------------------------------------------------------------------
Country or area 1979-2007 1979-1990 1990-1995 1995-2000 2000-2007 2005-2006 2006-2007
--------------------------------------------------------------------------------------------------------
Unit labor costs(3): U.S. dollar basis
United States 0.6 2.6 -0.2 -0.8 -1.0 -0.6 -1.1
Canada 2.5 4.6 -2.9 -2.4 7.0 7.8 6.5
Australia NA NA 1.3 -4.2 9.1 4.5 15.0
Japan 1.3 4.6 9.4 -4.8 -4.8 -7.3 -4.8
Korea, Republic of 1.9 4.4 6.9 -9.5 3.3 5.8 1.8
Singapore NA NA 5.7 -7.8 0.3 -0.1 5.2
Taiwan 1.6 8.5 2.7 -5.3 -4.5 -4.5 -6.2
Belgium 0.9 0.6 3.3 -7.9 6.5 0.8 10.1
Denmark 2.8 4.1 2.2 -6.1 7.9 1.2 11.7
France 1.4 2.7 2.8 -8.4 6.0 1.8 9.5
Germany (2) 2.2 4.5 5.9 -8.0 3.7 -3.1 5.7
Italy 2.8 5.2 -3.9 -3.7 9.1 3.3 12.0
Netherlands 1.3 1.7 3.3 -7.6 6.2 0.5 9.3
Norway 3.9 4.9 3.1 -2.9 8.1 8.9 15.0
Spain 2.3 3.8 0.8 -6.6 8.0 3.2 10.3
Sweden -0.1 3.8 -5.4 -6.7 2.5 -4.7 13.8
United Kingdom 2.9 4.5 -1.4 1.1 4.7 2.6 6.5
Exchange rates(4)
United States -- -- -- -- -- -- --
Canada 0.3 0.0 -3.2 -1.6 4.8 6.8 5.6
Australia -1.0 -3.2 -1.1 -4.7 5.4 -1.2 11.4
Japan 2.2 3.8 9.1 -2.7 -1.3 -5.3 -1.2
Korea, Republic of -2.3 -3.4 -1.7 -7.3 2.8 7.3 2.7
Singapore NA NA 5.0 -3.9 2.0 4.8 5.4
Taiwan 0.3 2.7 0.3 -3.3 -0.7 -1.2 -1.1
Belgium 0.0 -1.2 2.5 -7.6 5.8 0.9 9.1
Denmark -0.1 -1.5 2.0 -7.1 5.8 0.9 9.2
France -0.4 -2.2 1.8 -6.8 5.8 0.9 9.1
Germany (2) 0.9 1.1 2.5 -7.5 5.8 0.9 9.1
Italy -1.9 -3.3 -6.0 -4.9 5.8 0.9 9.1
Netherlands 0.8 0.9 2.6 -7.6 5.8 0.9 9.1
Norway -0.5 -1.9 -0.3 -6.4 6.0 0.5 9.5
Spain -2.1 -3.7 -3.9 -7.1 5.8 0.9 9.1
Sweden -1.6 -2.9 -3.7 -4.9 4.5 1.3 9.1
United Kingdom -0.2 -1.6 -2.4 -0.8 4.1 1.3 8.6
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NA=data not available
(1) Rates of change based on the compound rate method.
(2) Data for years before 1991 pertain to the former West Germany.
(3) Adjusted for employment taxes and government subsidies to estimate the actual cost to employers.
(4) Value of foreign currency relative to the U.S. dollar.
-11-
Trade-weighted unit labor costs
BLS constructs indexes of U.S. unit labor cost trends relative to
a competitors' index, which is a trade-weighted average of unit labor
cost trends in the other economies, in order to take account of
differences in the relative importance of foreign economies to U.S.
trade in manufactured goods. Relative trade-weighted unit labor cost
indexes are calculated on both a national currency and a U.S. dollar
basis.
In this release, the relative U.S. trade-weighted indexes are
estimated against 14 economies for which comparable data are
available over the period of comparison. Australia and Singapore have
been omitted because unit labor cost data are not available before
1990. The indexes underlying this chart are shown in table C.
Chart 3 begins in 1979, a year in which U.S. manufacturing output
reached a business cycle peak.
PRINTED COPY CONTAINS CHART AT THIS POINT:
Chart 3. U.S. manufacturing unit labor costs relative to 14(1)
other economies, 1979-2007
In the chart, the dotted line shows that, on a national currency
basis, U.S. unit labor costs tended to fall more or increase less
than unit labor costs in the other economies from 1979 until 1998.
After that, the year-to-year fluctuations do not follow a clear
trend.
The solid line compares the unit labor costs on a U.S. dollar
basis. From 1979 to 1985, and again from 1995 to 2001, U.S. unit
labor costs on a U.S. dollar basis generally rose more or declined
less than in the other economies, due to the appreciation of the
dollar. Since 2001, relative U.S. unit labor costs declined with the
weakening of the U.S. dollar.
-12-
Table C. U.S. manufacturing unit labor
costs relative to 14(1) competitors, 1979-2007
----------------------------------------------------------------
Unit Labor Costs Unit Labor Costs
National Currency Basis U.S. Dollar Basis
Year Own Competitors' Own Competitors'
Index Index Ratio Index Index Ratio
----------------------------------------------------------------
1979 100.0 100.0 100.0 100.0 100.0 100.0
1980 112.7 111.4 101.2 112.7 110.0 102.5
1981 117.6 120.9 97.3 117.6 108.8 108.2
1982 127.4 131.3 97.1 127.4 108.3 117.6
1983 122.7 133.6 91.8 122.7 106.2 115.5
1984 123.8 133.5 92.7 123.8 99.6 124.3
1985 126.2 136.0 92.8 126.2 97.7 129.2
1986 130.1 141.5 91.9 130.1 117.0 111.2
1987 125.4 144.6 86.7 125.4 133.6 93.9
1988 126.4 147.4 85.8 126.4 146.0 86.6
1989 129.4 151.3 85.5 129.4 147.8 87.5
1990 133.3 157.9 84.4 133.3 161.1 82.7
1991 136.7 166.1 82.3 136.7 170.7 80.1
1992 137.8 169.6 81.3 137.8 175.2 78.7
1993 136.7 170.4 80.3 136.7 167.6 81.6
1994 134.1 167.8 79.9 134.1 164.7 81.4
1995 131.6 169.6 77.6 131.6 174.3 75.5
1996 129.0 171.4 75.3 129.0 170.4 75.7
1997 127.1 169.1 75.2 127.1 156.5 81.2
1998 125.7 170.1 73.9 125.7 146.4 85.9
1999 124.4 166.7 74.6 124.4 146.3 85.0
2000 126.1 162.3 77.7 126.1 137.8 91.5
2001 127.7 167.8 76.1 127.7 134.1 95.3
2002 123.8 168.2 73.6 123.8 135.9 91.1
2003 124.6 167.7 74.3 124.6 152.2 81.9
2004 119.9 166.6 72.0 119.9 163.4 73.4
2005 119.7 164.9 72.6 119.7 166.9 71.7
2006 119.0 164.0 72.6 119.0 169.8 70.1
2007 117.7 162.7 72.3 117.7 177.2 66.4
----------------------------------------------------------------
(1) Australia and Singapore have been omitted from this table
because data are not available before 1990.
-13-
Technical Notes
The comparisons in this release are based on data available to
the Bureau of Labor Statistics as of the end of January 2009 from the
national statistical offices of the 17 economies compared.
Definitions. Labor productivity is defined as real output per
hour worked. Although the labor productivity measure presented in
this release relates output to the hours worked of persons employed
in manufacturing, it does not measure the specific contributions of
labor as a single factor of production. Rather, it reflects the joint
effects of many influences, including new technology, capital
investment, capacity utilization, energy use, and managerial skills,
as well as the skills and efforts of the workforce.
Unit labor costs are defined as the cost of labor input required
to produce one unit of output. They are computed as compensation in
nominal terms divided by real output. Unit labor costs can also be
computed by dividing hourly compensation by output per hour, that is,
by labor productivity.
Methodology. BLS constructs trends of manufacturing labor
productivity and unit labor costs from three basic aggregate
measures: output, total labor hours, and total compensation. The
hours and compensation measures, as well as the employment measures,
refer to employees (wage and salary earners) in Belgium and Taiwan.
For all other economies, the measures refer to all employed persons,
including employees, self-employed persons, and unpaid family
workers.
In general, the measures relate to total manufacturing as defined
by the International Standard Industrial Classification (ISIC).
However, the measures for France include parts of mining. Data for
the United States are in accordance with the North American Industry
Classification System (NAICS 97), except compensation data before
1987. Canadian data are in accordance with NAICS 97 starting in 1961.
The data for the most recent years are based on the United
Nations System of National Accounts 1993 (SNA 93). For earlier years,
data were compiled according to previously used systems.
To obtain historical time series, BLS may link together data
series which were compiled according to different accounting systems
by national statistical offices.
Output. For most of the economies, the output measures are real
value added in manufacturing, based on national accounts. However,
output for Japan prior to 1970 and for the Netherlands prior to 1960
are indexes of industrial production. The manufacturing value added
measures for the United Kingdom are essentially identical to their
indexes of industrial production.
Most economies now estimate manufacturing real output using
moving price weights, as recommended by SNA 93. However, many earlier
time periods within the historical real output series have been
estimated using fixed price weights, with the weights updated
periodically (for example, every 5 or 10 years). Taiwan and Korea
still use fixed price weights to estimate real output.
-14-
Measures of real output also may differ among economies because
of different approaches to quality adjustments.
For the United States, the output measure for the manufacturing
sector is a chain-weighted index of real gross product originating
(deflated value added) produced by the Bureau of Economic Analysis
(BEA) of the U.S. Department of Commerce. For more information on the
U.S. measure, see "Improved Estimates of Gross Product by Industry
for 1947-98," Survey of Current Business, June 2000, pp. 24-38 and
"Gross Domestic Product by Industry for 1947-86. New Estimates Based
on the North American Industry Classification System," Survey of
Current Business, December 2005, pp. 70-84.
The U.S. manufacturing output series used for international
comparisons differs from the manufacturing output series that BLS
publishes as part of its major sector productivity and costs measures
for the United States. The international comparisons program uses a
value added output concept, while the major sector series is on a
sectoral output basis. Sectoral output is gross output less intra-
sector sales and transfers. The U.S. major sector productivity and
costs measures can be found at http://www.bls.gov/lpc/home.htm. For
information on sectoral output, see "Measurement of productivity
growth in U.S. manufacturing," Monthly Labor Review, July 1995, pp.
13-28.
Value added measures have been used for the international
comparisons series because the data are more readily available from
the economies' national accounts, whereas sectoral output would
require a complex estimation procedure. Even though BLS has
determined that sectoral output is the correct concept for U.S.
measures of productivity, there are other considerations that may
make value added a better concept for international comparisons of
labor productivity, such as differences among economies in the extent
of vertical integration of industries.
Labor Input. For the most recent years, the term "hours" refers
to hours worked. For some earlier years, BLS uses other hours
measures.
For the United States, the employment and hours data series
beginning with 1987 are taken from the NAICS-based manufacturing all-
employed series published by BLS as part of the major sector
productivity and cost measures. For the period before 1987, these
series are linked to NAICS-based, employees-only data from the
Current Employment Statistics (CES) program.
For most other economies, recent years' aggregate hours series
are obtained from national statistical offices, usually from national
accounts. However, for some earlier years, BLS calculates the
aggregate hours series using employment figures published with the
national accounts, or other comprehensive employment series, and data
on average hours worked.
Compensation (Labor Cost). The compensation measures are from
national accounts. Compensation includes employer expenditures for
legally required insurance programs and contractual and private
benefit plans, in addition to all payments made in cash or in kind
directly to employees. When data for the self-employed are not
available, total compensation is estimated by assuming the same
average compensation for the self-employed as for employees.
-15-
Labor cost is defined as compensation plus employment taxes minus
employment subsidies, i.e. the cost to employers of using labor. For
most economies, labor cost is the same as compensation. However, for
Australia, Canada, France, Singapore, and Sweden, compensation is
increased to account for important taxes on payroll or employment.
For the United Kingdom, compensation is reduced between 1967 and 1991
to account for subsidies.
Data for Germany. German data prior to 1991 pertain to the former
West Germany. The data series are linked in 1991.
Data for Australia. Australian data are published by fiscal
years, which run from July 1 through June 30. The Australian Bureau
of Statistics provides unpublished calendar-year data for real value
added, employment, and hours worked. For compensation, BLS estimates
calendar-year series using two-year moving averages of the data for
fiscal years. Manufacturing compensation data are not available for
years prior to 1990.
Data for Recent Years. The measures for recent years may be
estimates based on various current indicators until national accounts
and other preferred statistics become available.
Trade-Weighted Measures. The trade weights used to calculate the
relative unit labor cost indexes of the United States and the other
economies are based on the relative dollar value of U.S. trade in
manufactured commodities (exports plus imports) with each economy in
2007. The trade data are compiled by the U.S. Census Bureau.
The following weights were used for the entire period for which
trade-weighted unit labor cost measures are produced:
Weight Weight
Canada 36.12 Germany 10.64
Japan 16.00 Italy 3.54
Korea 6.09 Netherlands 3.68
Taiwan 4.84 Norway 0.54
Belgium 3.02 Spain 1.36
Denmark 0.65 Sweden 1.42
France 4.82 United Kingdom 7.28
Level Comparisons. The BLS measures are limited to trend
comparisons. BLS does not prepare level comparisons of manufacturing
productivity and unit labor costs because of data limitations and
technical problems in comparing the levels of manufacturing output
among economies. Each economy measures manufacturing output in its
own currency units. To compare outputs among economies, a common unit
of measure is needed. Market exchange rates are not suitable as a
basis for comparing output levels. What is needed are purchasing
power parities, which are the number of foreign currency units
required to buy goods and services equivalent to what can be bought
with one unit of U.S. currency.
-16-
Purchasing power parities, for most economies, are available for
total gross domestic product (GDP) from the Organization for Economic
Cooperation and Development (OECD). However, these parities are
derived for expenditures made by consumers, business, and government
for goods and services - not for value added by industry. Therefore,
they do not provide purchasing power parities by industry. The
parities developed for total GDP are not suitable for each component
industry, such as manufacturing.
European exchange rates. On Jan. 1, 1999, 11 European countries
joined the European Monetary Union (EMU). In subsequent years several
other European countries became EMU members. The euro, the official
currency of the EMU, was established at fixed conversion rates to the
previous national currencies of EMU members. Data on manufacturing
value added and labor compensation for euro-area countries are now
reported in euros.
In order to maintain historical continuity of data series, data
for euro-area countries for years before 1999 have been converted to
euros by applying the fixed euro/national currency conversion rates.
For countries and years where output, compensation, and exchange
rates are converted from national currency units into euros, the
following fixed conversion rates are used:
1 euro equals: 40.3399 Belgian francs 1936.27 Italian lire
6.55957 French francs 2.20371 Netherlands guilders
1.95583 German marks 166.386 Spanish pesetas
The currency exchange rates cited in this publication are annual
averages of daily buying rates in New York City.
United States Department of Labor
