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Economic News Release
LPC LPC Program Links

Productivity and Costs by Industry: Manufacturing and Mining Industries -- 2018

For release 10:00 a.m. (EDT) Tuesday, April 23, 2019                                                  USDL-19-0695

Technical information:  (202) 691-5606 
Media contact:          (202) 691-5902

                                  PRODUCTIVITY AND COSTS BY INDUSTRY:
                               MANUFACTURING AND MINING INDUSTRIES, 2018

Labor productivity declines were widespread among manufacturing industries in 2018, with decreases 
in 67 of the 86 four-digit NAICS industries. Of the 51 industries in durable manufacturing, 41 saw 
productivity decreases in 2018 led by a decline in the lime and gypsum products industry of 11.8 percent. 
Nondurable manufacturing also had widespread declines in 2018 with productivity falling in 26 of 35 
industries, led by the textile and fabric finishing mills industry with a decrease of 11.3 percent. Of the 4 
industries in the mining sector, 2 posted productivity gains in 2018 led by the oil and gas extraction 
industry with an increase of 12.1 percent. 

Labor Productivity Trends in NAICS 3-Digit Industries, 2018

      * Labor productivity decreased in 16 of the 21 NAICS 3-digit manufacturing industries in 2018, 
        as output declined in 16 industries and hours worked rose in 16.
      * The printing and related support activities industry had the largest productivity gain, 2.0 
        percent, as output decreased but hours decreased more.
      * The petroleum and coal products industry had the largest productivity decline, 7.8 percent, 
        as output fell 3.3 percent and hours worked increased 4.9 percent.

      * Labor productivity rose by 12.1 percent in the oil and gas extraction industry where a 
        significant increase in output outpaced growth in hours worked.
      * The mining, except oil and gas industry had a productivity decline of 3.5 percent, as the 
        increase in hours worked was larger than a modest increase in output.  

Trends in Unit Labor Costs in 2018

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, 47 
experienced rising unit labor costs, led by the audio and video equipment industry which increased 30.1 
percent. Nondurable manufacturing also experienced widespread increases in unit labor costs with 26 of 
the 35 industries recording an increase, led by the other leather products industry with a rise of 8.6 
percent. Of the 4 industries in the mining sector, 3 had increases in unit labor costs led by the metal ore 
mining industry which increased 17.1 percent.

Unit Labor Cost Trends in NAICS 3-Digit Industries, 2018

      * Employers experience increased unit labor costs when hourly compensation growth exceeds 
        productivity growth. Unit labor costs increased in 20 of the 21 manufacturing industries, as 
        hourly compensation growth outpaced that of productivity. Textile mills was the exception 
        and had a decrease in unit labor costs due to hourly compensation declines that exceeded 
        productivity declines.

      * Unit labor costs declined in the oil and gas extraction industry by 12.4 percent, as 
        productivity increased by 12.1 percent and hourly compensation decreased by 1.8 percent.
      * The mining, except oil and gas industry saw a 7.6 percent increase in unit labor costs, as 
        hourly compensation rose by 3.8 percent while productivity dropped by 3.5 percent.

Long-Term Trends in Labor Productivity and Unit Labor Costs 

Labor Productivity
      * Over the entire 1987-2018 period, labor productivity rose in 83 of the 90 manufacturing 
        and mining industries. Output rose in 54 industries, while hours worked increased in only 
        17. In the 17 industries where hours worked increased, they rose at a slow pace, less than 
        half a percent per year on average.
      * During the more recent 2007-2018 period, which included the Great Recession of 2007-09, 
        productivity increased in only 36 industries. These increases are predominantly the result 
        of a decline in hours worked rather than an increase in output, as hours worked fell in 31 of 
        these industries while output increased in only 10.

Unit Labor Costs
      * During the 1987-2018 period, unit labor costs increased in 77 of the 86 NAICS 4-digit 
        manufacturing industries. All 4 mining industries saw an increase in unit labor costs.
      * From 2007 to 2018, unit labor costs increased in 80 of the 86 manufacturing industries and in 3 
        of the 4 mining industries.  Unit labor costs increased the most in the audio and video equipment 

The computer and peripheral equipment industry recorded the largest productivity gain as well as the 
largest unit labor cost decline during both the 1987-2018 and 1987-2007 periods. However, between 
2007 and 2018, the oil and gas extraction industry posted the greatest productivity growth and the 
largest unit labor cost decline.	

Additional Information

Manufacturing industry output measures for 2016 and earlier years are constructed primarily using data 
from the economic censuses and annual surveys of the U.S. Census Bureau together with data on price 
changes primarily from BLS. These measures have been revised due to new and revised data from the 
Bureau of Economic Analysis, used in part to construct intra-industry transactions. Manufacturing 
industry output for 2017 and 2018 is estimated based on historical relationships between BLS sectoral 
output, BLS price indexes, and data on industrial production from the Federal Reserve Board.

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Last Modified Date: April 23, 2019