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Economic News Release
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Total Factor Productivity in Major Industries News Release

For release 10:00 a.m.  (ET) Thursday, November 18, 2021       USDL-21-2019
Technical information:  (202) 691-5606 • productivity@bls.gov • www.bls.gov/mfp
Media contact:		(202) 691-5902 • PressOffice@bls.gov

TOTAL FACTOR PRODUCTIVITY FOR MAJOR INDUSTRIES – 2020

Total factor productivity (TFP) declined in 16 out of 21 major industries 
measured in 2020, the U.S. Bureau of Labor Statistics (BLS) reported today.
These negative TFP trends were largely due to the economic downturn caused
by the COVID-19 pandemic. As with the Great Recession, the decline in TFP
growth was widespread across the economy but more severe in 2020 compared to
2008-09. In 2020, the largest industry declines were in arts, entertainment,
and recreation (-17.9 percent) and educational services (-10.9 percent),
while the largest TFP decline during the Great Recession was in the finance
and insurance industry (-5.5 percent). (See table 1).

The TFP declines in 2020 were primarily due to declines in real output 
outpacing declines in the combined inputs of capital, labor, energy,
materials, and purchased business services. Among the combined inputs,
labor contracted in 18 of 21 major industries measured and the combination
of energy, materials, and purchased business services (intermediate inputs)
declined in 15 of the industries measured. (See table 1). Out of the five 
industries with productivity growth, three industries had declines in both
output and combined inputs.

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|	Terminology Change for Multifactor Productivity Data		     |
|The BLS Productivity program will replace the term multifactor productivity |
|(MFP) with total factor productivity (TFP) beginning with this release.     |
|This is a change in terminology only and will not affect the data or        |
|methodology. The use of the term total factor productivity will improve the |
|visibility and accessibility of our data and will be accompanied by changes |
|to the BLS website and future productivity news releases.                   |
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Total factor productivity is defined as output per unit of combined inputs. 
TFP shows the relationship between changes in real sectoral output and changes
in the combined inputs of capital services (K), labor input (L), and
intermediate inputs (energy (E), materials (M), and purchased business 
services (S)) used in production of final goods and services. It reflects
economic growth that is not due to growth in measured KLEMS inputs, 
including technological change, organizational changes in the production 
process, and other efficiency improvements.

Industry spotlight: Arts, entertainment, and recreation

The COVID-19 pandemic hit service providing industries especially hard as 
they rely heavily on face-to-face contact with customers. The arts, 
entertainment, and recreation industry had the largest decline in TFP
(-17.9 percent) of the 21 major industries measured. Not only did this 
industry experience a record decline in output of 37.7 percent, but it 
also experienced historic declines in four out of the five KLEMS inputs. 
In 2020, labor declined 25.6 percent, energy declined 37.7 percent, 
materials declined 40.6 percent, and purchased business services declined
31.8 percent. The last time these four inputs declined at the same time 
was during the Great Recession year of 2009, however, the magnitude of
the 2020 declines were much more severe. (See table 2). 

The closure of museums, entertainment venues, sports arenas, and parks
had a cascading affect beyond lost revenue of ticket sales. Widespread 
business closures and drastically reduced hours worked led to lower energy 
consumption. With no fans in the seats, there was no need for the other 
material inputs and purchased business services, including vendor contracts.
Capital services was the only input that maintained growth because these 
assets, such as buildings, land, machinery, and equipment, are not easily 
reduced. Although the arts, entertainment, and recreation industry was hit
the hardest, there were also significant KLEMS input declines in other 
industries, such as accommodation and food services; educational services; 
transportation and warehousing; other services, except government; and 
mining. (See tables 1 and 2.)

Total factor productivity and KLEMS as sources of labor productivity growth

The sudden arrival of the COVID-19 pandemic forced industries to displace
workers and cancel existing service contracts. As production throughout the
economy dramatically declined, so did hours worked. However, hours declined
at a slower rate than output which led to labor productivity declines among
12 of 21 major industries, the most since the Great Recession. 
(See table 5.)

Changes in total factor productivity and combined KLEMS inputs help to explain
labor productivity changes. Labor productivity can be expressed as the sum
of six components: total factor productivity growth (TFP), contribution of
capital intensity, contribution of labor composition, contribution of 
energy intensity, contribution of materials intensity, and the contribution
of purchased business services intensity. The contribution of each KLEMS 
input is defined as the ratio of the services provided by that input to 
hours worked in the production process, weighted by its share of sectoral
output. Examining input contributions and TFP changes reveals the 
substitution effect of increased use of an input relative to labor on an 
industry’s labor productivity. (See table 5.) 

Of the 12 industries with labor productivity declines, TFP was the largest
contributor to this decline in all but two industries (utilities and finance 
and insurance). The largest contributor to the decline in the utilities and
finance and insurance industries was purchased business services intensity.
The contribution of energy intensity was negative for all but one of these
industries (finance and insurance). The contribution of purchased business
services intensity was negative for all but one of these industries as well
(other services, except government). A negative contribution for an input of
K, E, M, and S, indicates that this input declined faster than hours worked.
The contribution of capital intensity was positive for most industries, 
keeping labor productivity from declining further.   

The sixth component of labor productivity, labor composition, was a positive 
contributor to labor productivity in 16 of 21 major industries. The labor 
composition index estimates the effect of shifts in the composition of the 
workforce on hours worked, using information on age, education, gender, and
relative wages. As industries cut hours, the composition of the workforce 
shifted toward more experienced workers, increasing the average wage of the
industry, and having a positive impact on labor productivity.
 
TFP and input contributions to output 

The large TFP and labor productivity declines among industries in 2020 led to
an overall decline in output for the private business sector. The nation's 
output can be viewed as the sum of three components: total factor 
productivity, contribution of capital services, and contribution of labor 
input. TFP contributed 3.38 percentage points of the decline in output, 
while labor input contributed 2.64 percentage points of the decline. These 
one-year declines are larger than the two years of combined declines in 
output experienced during the Great Recession of 2008-09. Notice that at the
onset of the Great Recession in 2008, TFP was the predominant contributor to
negative output, but as the recession continued into 2009, labor input 
became the primary negative driver.

The private business sector can be divided into four sectors: goods producing;
information and communication technology (ICT); finance, insurance, and real 
estate (FIRE); and service providing. These sectors further explain how the 
economic losses experienced in the U.S. in 2020 differ from the Great Recession 
of 2008 and 2009, with regard to the negative impact of TFP and labor input and
the positive contribution of capital services. (See footnotes after table 7 
for industry makeup of each sector.)

TFP contribution

The negative total factor productivity contribution of 3.38 percentage points
to private business output in 2020 was widespread, with all four sectors 
experiencing negative contributions, led by the service providing sector
which had a negative contribution of 2.37 percentage points. Among the service
providing sector, transportation and warehousing and health care and social 
assistance were the main downward drivers both with a negative 0.62 percentage
point contribution. Accommodation and food services also experienced a large
decline of 0.46 percentage point. By contrast, during the Great Recession,
the goods producing sector made the largest negative contribution 
(-0.81 percentage point) to TFP growth. (See tables 6 and 7.) 

Labor contribution

In 2020, labor input had a negative contribution to private business output,
with declines in three of the four aggregated sectors. The service providing 
sector had the largest negative contribution in 2020
(-2.01 percentage points),led by accommodation and food service 
(-0.58 percentage point) and professional and technical services 
(-0.29 percentage point). By contrast, the largest negative labor 
contribution to output during the Great Recession came from the goods 
producing sector (-1.19). Of note is the different behavior of the FIRE
sector during 2020 and the Great Recession. This sector had a small positive
contribution of 0.12 percentage point in 2020 compared to a negative 
contribution of 0.19 percentage point in 2008-09. 
(See tables 6 and 7.)

Capital contribution

Capital services positive contribution to output in 2020 kept output from
declining faster. Capital services positive contribution in 2020 and during 
the Great Recession reflects the stability of capital stock during downturns.
All sectors demonstrated a positive contribution of capital to output during 
both 2020 (0.95 percentage point) and the Great Recession 
(0.62 percentage point)  but it was the large contributions of the FIRE and
ICT sectors that led to the greater contribution of capital in 2020. The 
0.26 percentage point contribution of the FIRE sector was driven by the 
finance and insurance industry with a contribution of 0.19 percentage point. 
During the Great Recession this industry only had a contribution of 0.02 
percentage point. (See table 6 and 7.) The ICT sector increased
its contribution of capital to output from 0.18 percentage point during the 
Great Recession to 0.25 percentage point.

Technical Notes 

Special adjustment for the COVID-19 pandemic

In response to the COVID-19 global pandemic that began late in the first 
quarter of 2020, Congress passed multiple pieces of legislation to provide
support to individuals, communities, and businesses. The size and wide 
scope of these subsidies impacted every industry in the private business
economy. This release incorporates data from the Bureau of Economic 
Analysis (BEA) to distribute these subsidies into labor and capital 
costs, based on the usage allowed by law, for each industry. Additional
information can be found on the BLS website at
www.bls.gov/covid19/effects-of-covid-19-pandemic-on-productivity-and-
costs-statistics.htm#Multifactor-Productivity. 

Goods producing sector

This sector contains industries within agriculture, forestry, fishery, and
hunting (NAICS 11), mining (NAICS 21), utilities (NAICS 22), construction 
(NAICS 23), and manufacturing (NAICS 31-33) except computer and electronic 
products (NAICS 334).

Information and communications technology (ICT) sector

Information and communication technology (ICT) contains the following 
industries: computer and electronic products (NAICS 334), broadcasting and 
telecommunications (NAICS 515,517), data processing, internet publishing, 
and other information services (NAICS 518,519) and computer systems design 
and related services (NAICS 5415). This definition is generally comparable
to that used by the Organization for Economic Cooperation and Development 
(OECD), which defines the ICT sector using the International Standard 
Industrial Classification (ISIC) (OECD 2011).

FIRE sector

The finance, insurance, and real estate (FIRE) sector contains industries
within finance and insurance (NAICS 52) and real estate and rental and 
leasing (NAICS 53).

Service providing sector

This sector contains industries within trade (NAICS 42,44-45), transportation
and warehousing (NAICS 48-49), publishing, except internet (includes software)
(NAICS 511) and motion picture and sound recording (NAICS 512), and industries
within services (NAICS 54-81) except computer systems design and related 
services (NAICS 5415).

Capital services 

Data on investment for fixed assets are obtained from BEA. Data on inventories
are estimated using data from BEA and additional information from IRS 
Corporation Income Returns. Data for land in the farm industry are obtained 
from 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. 

Labor input 

Hours at work data reflect Productivity and Costs data as of the September 2, 
2021 “Productivity and Costs” news release (USDL- 21-1570). 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.

Energy, materials, and purchased business services

Data on energy, materials, and purchased business services are obtained from 
BEA based on BEA annual input-output tables. Tornqvist indexes of each of 
these three input classes are derived at the NAICS industry level and then 
aggregated to the industries. Materials inputs are adjusted to exclude 
transactions between establishments within the same industry for goods 
producing industries. Purchased business services are adjusted to exclude 
transactions between establishments within the same industry for all 
non-goods producing industries.

Sectoral output 

The output concept used to measure total factor productivity for industries
is “sectoral output”. Sectoral output equals gross output (sales, receipts,
and other operating income, plus commodity taxes plus changes in inventories),
excluding transactions between establishments within the same industry. 

2020 manufacturing output measures are estimated based on historical 
relationships between BLS industrial output, BLS price indexes, and data
on industrial production from the Federal Reserve Board. For select service 
providing industries, output measures are estimated using data from the 
Quarterly Services Survey from the Census Bureau. For all other 
nonmanufacturing industries, sectoral output is based on indexes of real
quantity and cost measures from the BEA. Data sources by industry for 
1987-2019 can be found at www.bls.gov/opub/hom/msp/data.htm.

Other information 

Detailed information on methods used in this release can be found in 
the BLS Handbook of Methods Productivity Measures: Business Sector and
Major Sector section at www.bls.gov/opub/hom/msp/home.htm.

Comprehensive tables containing more detailed data than that which is
published in this news release are available upon request at 202-691-5606
or at www.bls.gov/mfp/mprdload.htm. Industry specific contributions to 
output are available at www.bls.gov/mfp/contributions-to-output.htm.

Table 1. Total factor productivity and related data, 2020
Industry2012 NAICS CodePercent change
TFPOutputCombined InputsCapital InputLabor InputIntermediate Inputs[1]

Agriculture, forestry, fishery, and hunting

117.49.41.90.3-4.75.8

Mining

21-4.0-18.0-14.6-0.2-14.9-24.4

Utilities

221.8-2.8-4.52.40.0-12.3

Construction

230.31.41.13.8-5.77.1

Manufacturing

31-33-3.3-7.0-3.91.1-4.4-7.0

Durable manufacturing

321,327,33-3.2-8.3-5.30.4-5.9-8.6

Nondurable manufacturing

31,322-326-2.9-5.6-2.81.8-1.9-5.3

Wholesale trade

420.7-2.1-2.80.8-5.8-2.6

Retail trade

44,45-1.0-0.10.81.6-3.14.2

Transportation and warehousing

48-49-8.1-15.1-7.63.2-4.6-14.4

Information

51-0.13.43.65.9-0.84.3

Finance and insurance

52-0.51.92.34.33.3-1.1

Real estate and rental and leasing

53-1.9-3.0-1.11.5-5.6-2.0

Professional and technical services

540.3-3.1-3.36.6-3.7-5.8

Management of companies

55-3.32.05.50.98.22.9

Admin and waste services

56-0.2-3.2-3.04.6-7.31.1

Educational services

61-10.9-17.3-7.21.8-7.8-9.3

Health care and social assistance

62-4.8-7.5-2.92.9-2.0-4.8

Arts, entertainment, and recreation

71-17.9-37.7-24.12.7-25.6-33.8

Accommodation and food services

72-8.6-25.9-18.92.0-20.9-24.3

Other services, except government

81-3.0-14.8-12.11.9-12.4-13.2

[1] Intermediate inputs is an aggregation of energy, materials, and purchased business services


Table 2. Total factor productivity intermediate inputs, 2020
Industry2012 NAICS CodePercent change
Energy InputMaterials InputServices Input[1]

Agriculture, forestry, fishery, and hunting

113.410.71.2

Mining

21-19.3-11.5-31.0

Utilities

22-7.75.8-19.2

Construction

2316.12.222.1

Manufacturing

31-33-17.4-2.7-14.2

Durable manufacturing

321,327,33-15.7-4.7-15.7

Nondurable manufacturing

31,322-326-17.1-2.9-11.4

Wholesale trade

42-0.526.9-4.4

Retail trade

44,451.024.41.5

Transportation and warehousing

48-49-42.1-1.8-9.2

Information

51-22.1-1.06.0

Finance and insurance

5210.8-12.4-1.1

Real estate and rental and leasing

532.4-9.3-1.9

Professional and technical services

54-9.2-6.8-5.5

Management of companies

554.924.31.2

Admin and waste services

56-8.3-4.22.6

Educational services

61-27.28.6-12.2

Health care and social assistance

62-21.8-6.0-4.0

Arts, entertainment, and recreation

71-37.7-40.6-31.8

Accommodation and food services

72-22.3-22.5-25.1

Other services, except government

81-31.4-17.4-10.5

[1] Purchased business services


Table 3. Total factor productivity and related data, 1987-2020
Industry2012 NAICS CodeAverage annual percent change
TFPOutputCombined InputsCapital InputLabor InputIntermediate Inputs[1]

Agriculture, forestry, fishery, and hunting

111.21.40.20.3-0.10.2

Mining

211.41.30.0-0.1-0.21.1

Utilities

220.51.30.71.7-0.40.3

Construction

23-0.70.61.33.01.21.1

Manufacturing

31-330.71.20.52.3-0.50.2

Durable manufacturing

321,327,331.31.60.32.2-0.50.1

Nondurable manufacturing

31,322-326-0.10.40.52.4-0.40.2

Wholesale trade

421.13.52.43.40.53.9

Retail trade

44,451.02.91.83.70.52.7

Transportation and warehousing

48-490.42.31.92.01.52.3

Information

510.85.14.36.40.75.2

Finance and insurance

520.02.92.95.11.53.0

Real estate and rental and leasing

53-0.22.83.13.11.13.7

Professional and technical services

540.43.83.47.32.44.5

Management of companies

550.03.03.02.81.65.4

Admin and waste services

560.34.23.96.72.55.4

Educational services

61-0.53.23.64.56.02.6

Health care and social assistance

62-0.63.03.64.43.33.8

Arts, entertainment, and recreation

71-0.31.82.22.91.12.9

Accommodation and food services

720.01.41.42.01.01.6

Other services, except government

81-0.31.41.72.50.82.8

[1] Intermediate inputs is an aggregation of energy, materials, and purchased business services


Table 4. Total factor productivity intermediate inputs, 1987-2020
Industry2012 NAICS CodeAverage annual percent change
Energy InputMaterials InputServices Input[1]

Agriculture, forestry, fishery, and hunting

110.31.2-0.4

Mining

21-0.11.80.9

Utilities

22-0.3-0.92.8

Construction

232.71.50.2

Manufacturing

31-33-2.60.7-0.3

Durable manufacturing

321,327,33-3.90.8-0.6

Nondurable manufacturing

31,322-326-1.70.30.1

Wholesale trade

421.73.74.1

Retail trade

44,450.73.22.8

Transportation and warehousing

48-49-0.83.33.1

Information

511.73.86.2

Finance and insurance

523.50.43.1

Real estate and rental and leasing

539.70.23.9

Professional and technical services

541.34.94.6

Management of companies

553.910.35.0

Admin and waste services

560.44.26.2

Educational services

611.23.32.5

Health care and social assistance

620.31.65.1

Arts, entertainment, and recreation

710.93.72.8

Accommodation and food services

721.4-0.73.7

Other services, except government

81-1.52.03.5

[1] Purchased business services


Table 5. Sources of labor productivity, 2020
Industry2012 NAICS CodePercent ChangePercentage Point
Labor ProductivityTFPCapital IntensityLabor CompositionEnergy IntensityMaterials IntensityServices Intensity[1]

Agriculture, forestry, fishery, and hunting

1112.57.41.2-0.30.22.90.8

Mining

211.0-4.07.60.90.01.3-4.3

Utilities

22-2.11.81.30.1-1.50.2-3.9

Construction

238.20.31.00.20.53.02.9

Manufacturing

31-33-0.4-3.32.40.7-0.21.1-1.1

Durable manufacturing

321,327,33-0.3-3.22.40.8-0.10.8-1.0

Nondurable manufacturing

31,322-326-1.3-2.91.70.5-0.30.6-0.9

Wholesale trade

424.40.71.80.20.10.80.8

Retail trade

44,453.8-1.00.90.20.11.52.0

Transportation and warehousing

48-49-12.6-8.10.9-0.8-3.20.1-1.9

Information

519.5-0.14.51.2-0.10.33.4

Finance and insurance

52-0.4-0.50.60.40.1-0.1-0.9

Real estate and rental and leasing

531.8-1.92.3-0.10.4-0.21.3

Professional and technical services

540.20.31.0-0.30.0-0.2-0.5

Management of companies

55-0.7-3.3-0.12.80.00.6-0.5

Admin and waste services

564.9-0.21.30.30.00.33.2

Educational services

61-9.0-10.91.70.5-0.51.8-1.3

Health care and social assistance

62-3.9-4.80.70.7-0.2-0.3-0.1

Arts, entertainment, and recreation

71-15.6-17.97.30.3-0.2-1.7-2.5

Accommodation and food services

72-7.0-8.64.1-0.3-0.1-0.3-1.5

Other services, except government

81-1.5-3.00.80.5-0.2-0.71.1

[1] Purchased business services


Table 6. Industry contributions[1] to private business output by component, 2008-09[2]
Industry2012 NAICS CodePercentage Point
TFPCapitalLabor

Goods producing sector

11-33-0.810.14-1.19

Agriculture, forestry, fishery, and hunting

110.12-0.05-0.01

Mining

210.070.02-0.02

Utilities

22-0.050.040.00

Construction

23-0.15-0.02-0.59

Manufacturing

31-33-0.800.15-0.58

Durable Manufacturing[3]

321,327,33-0.600.03-0.43

Nondurable Manufacturing

31,322-326-0.200.12-0.16

ICT[4]

51x0.210.18-0.05

Information

51-0.010.06-0.06

FIRE

52-530.240.06-0.19

Finance and insurance

520.430.02-0.14

Real estate and rental and leasing

53-0.190.04-0.05

Service providing sector

42-49,54-81-0.330.24-0.87

Wholesale trade

42-0.21-0.02-0.16

Retail trade

44, 45-0.060.01-0.18

Transportation and Warehousing

48-49-0.020.01-0.11

Professional and technical services[5]

540.060.06-0.16

Management of companies

55-0.140.010.05

Admin and waste services

560.060.02-0.25

Educational services

610.050.010.01

Health care and social assistance

620.140.050.10

Arts, entertainment, and recreation

710.000.01-0.01

Accommodation and food services

72-0.100.02-0.06

Other services, except government

81-0.100.01-0.04

[1] Contributions may not sum due to aggregation, rounding, and integration of the top line to industry

[2] 2008-09 is reported as the average annual rate of change of growth

[3] Goods producing except for computer and electronic products (NAICS 334)

[4] Information and communication technology sector (NAICS 51x) is the information major industry (NAICS 51) less publishing, except internet (includes software) (NAICS 511) and motion picture and sound recording (NAICS 512), plus computer and electronic products (NAICS 334) and computer systems design and related services (NAICS 5415)

[5] Service providing sector, except for computer systems design and related services (NAICS 5415)


Table 7. Industry contributions[1] to private business output by component, 2020
Industry2012 NAICS CodePercentage Point
TFPCapitalLabor

Goods producing sector

11-33-0.640.16-0.71

Agriculture, forestry, fishery, and hunting

110.170.00-0.02

Mining

21-0.080.00-0.08

Utilities

220.060.030.00

Construction

230.030.04-0.28

Manufacturing

31-33-0.830.08-0.33

Durable Manufacturing[2]

321,327,33-0.430.02-0.27

Nondurable Manufacturing

31,322-326-0.400.07-0.06

ICT[3]

51x-0.030.25-0.03

Information

510.050.02-0.02

FIRE

52-53-0.330.260.12

Finance and insurance

52-0.070.190.20

Real estate and rental and leasing

53-0.260.07-0.08

Service providing sector

42-49,54-81-2.370.28-2.01

Wholesale trade

420.080.02-0.22

Retail trade

44, 45-0.110.03-0.14

Transportation and Warehousing

48-49-0.620.03-0.14

Professional and technical services[4]

540.010.07-0.29

Management of companies

55-0.140.000.18

Admin and waste services

56-0.010.03-0.27

Educational services

61-0.140.00-0.03

Health care and social assistance

62-0.620.04-0.10

Arts, entertainment, and recreation

71-0.290.01-0.16

Accommodation and food services

72-0.460.02-0.58

Other services, except government

81-0.120.00-0.23

[1] Contributions may not sum due to aggregation, rounding, and integration of the top line to industry

[2] Goods producing except for computer and electronic products (NAICS 334)

[3] Information and communication technology sector (NAICS 51x) is the information major industry (NAICS 51) less publishing, except internet (includes software) (NAICS 511) and motion picture and sound recording (NAICS 512), plus computer and electronic products (NAICS 334) and computer systems design and related services (NAICS 5415)

[4] Service providing sector, except for computer systems design and related services (NAICS 5415)


Last Modified Date: November 18, 2021