Productivity and Costs by Industry: Manufacturing and Mining Industries -- 2017


For release 10:00 a.m. (EDT) Thursday, April 19, 2018                                USDL-18-0591

Technical information: 	(202) 691-5606  •  productivity@bls.gov  •  www.bls.gov/lpc 
Media contact:		(202) 691-5902  •  PressOffice@bls.gov

                                   PRODUCTIVITY AND COSTS BY INDUSTRY:
                                MANUFACTURING AND MINING INDUSTRIES, 2017
								
Labor productivity declines were widespread among manufacturing industries in 2017, with decreases in 54 of 
the 86 four-digit NAICS industries. Of the 51 industries in durable manufacturing, 34 experienced productivity 
decreases in 2017 led by a decline in the other transportation equipment industry of 11.5 percent. Nondurable 
manufacturing also experienced widespread declines in 2017 with productivity falling in 20 of 35 industries, led 
by the sugar and confectionery products industry with a decrease of 8.0 percent. Of the 4 industries in the mining 
sector, 3 had productivity gains in 2017 led by the oil and gas extraction industry with an increase of 32.6 
percent. 

Labor Productivity Trends in 3-Digit Industries, 2017

Manufacturing
  *	Labor productivity decreased in 15 of the 21 NAICS 3-digit manufacturing industries in 2017, 
    as output declined in 15 industries and hours worked rose in 13.
  *	The beverage and tobacco products industry had the fastest productivity decline of 9.2 
    percent, as output fell 2.9 percent and hours worked increased 6.9 percent.
  *	The primary metals industry had the largest productivity gain of 3.6 percent, as output 
    increased and hours decreased.

Mining
  *	Labor productivity rose by 32.6 percent in the oil and gas extraction industry where a 
    significant decline in hours worked outpaced modest growth in output.
  *	The mining, except oil and gas industry had productivity gains of 2.9 percent, as output 
    increased and hours worked decreased.  

Trends in Unit Labor Costs in 2017  

Unit labor costs, which reflect the total labor costs required to produce a unit of output, rose in 73 of the 
86 NAICS 4-digit manufacturing industries. Of the 51 industries in durable manufacturing, 45 
experienced rising unit labor costs led by the audio and video equipment manufacturing industry with an 
increase of 16.8 percent. Nondurable manufacturing also experienced widespread increases in unit labor 
costs with 28 of the 35 industries recording an increase, led by the apparel accessories and other apparel 
manufacturing industry with a rise of 13.0 percent. Of the 4 industries in the mining sector, 3 had 
decreases in unit labor costs led by the oil and gas extraction industry with a decline of 18.6 percent. 

Unit Labor Cost Trends in 3-Digit Industries, 2017

Manufacturing
  *	Employers experience increased unit labor costs when hourly compensation growth outpaces 
    productivity growth. Unit labor costs increased in 19 of the 21 manufacturing industries, as 
    hourly compensation growth outpaced that of productivity.
	
Mining
  *	Unit labor costs declined in the oil and gas extraction industry by 18.6 percent, as 
    productivity and hourly compensation increased by 32.6 percent and 7.9 percent respectively. 
  *	The mining, except oil and gas industry had an increase in unit labor costs, as hourly 
    compensation rose faster than productivity.
	
Long-Term Trends in Labor Productivity and Unit Labor Costs 

Labor Productivity
  *	Over the entire 1987-2017 period, labor productivity rose in 83 of the 90 manufacturing 
    and mining industries. This was associated with output rising in 58 industries, while hours 
    worked increased in only 15.
  *	During the more recent 2007-2017 period, which included the Great Recession, 
    productivity increased in only 43 industries. These increases are predominantly the result 
    of a decline in hours worked rather than an increase in output, as hours worked fell in 72 
    industries while output increased in only 15.

Unit Labor Costs
  *	During the 1987-2017 period, unit labor costs increased in 80 of the 90 manufacturing and 
    mining industries. Among the NAICS 4-digit industries, unit labor costs increased in 76 of the 86 
    manufacturing industries. All of the 4 mining industries saw an increase in unit labor costs.
  *	From 2007 to 2017, unit labor costs increased in 80 of the 86 manufacturing industries and in 3 
    of the 4 mining industries. The computer and peripheral equipment manufacturing industry was 
    the only industry with declines in both labor productivity and unit labor costs, as hourly 
    compensation fell faster than productivity. 
	
The computer and peripheral equipment manufacturing industry recorded the largest productivity gain as 
well as the largest unit labor cost decline during both the 1987-2017 and 1987-2007 periods. However, 
between 2007 and 2017, this industry saw the sharpest drop in unit labor costs while the oil and gas 
extraction industry posted the greatest productivity growth.	

Additional Information

Manufacturing industry output for 2017 is constructed with data on industrial production from the 
Federal Reserve and BLS price indexes. These measures also incorporate data from the Census Bureau’s 
2016 Annual Survey of Manufactures.

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Last Modified Date: April 19, 2018