Productivity and Costs by Industry: Wholesale Trade, Retail Trade, and Food Services and Drinking Places Industries - 2018

For release 10:00 a.m. (EDT) Thursday, July 25, 2019                                                 USDL-19-1343

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                                  PRODUCTIVITY AND COSTS BY INDUSTRY: WHOLESALE TRADE, 
                          RETAIL TRADE, AND FOOD SERVICES AND DRINKING PLACES INDUSTRIES - 2018

						  
Labor productivity rose 1.6 percent in wholesale trade, 3.2 percent in retail trade, and 1.6 percent 
in food services and drinking places in 2018, the U.S. Bureau of Labor Statistics reported today. Unit 
labor costs, which reflect the total labor costs required to produce a unit of output, rose in wholesale 
trade and food services and drinking places and were unchanged in retail trade.

For wholesale trade in 2018, productivity, output, and hours worked all increased at a faster rate than 
in 2017. In retail trade and food services and drinking places, the growth in output continued to outpace
the growth in hours worked in 2018. In these two industry groups, growth in hours worked was slower in 
2018 compared to 2017 resulting in a larger productivity increase.

Among the six industries with the highest productivity growth, five reported growth in output while two 
industries showed growth in hours worked. Productivity growth was greatest in book stores and news 
dealers where the decline in hours worked far surpassed the decline in output.

Of the six industries with the largest declines in productivity, hours worked increased in all six and 
output increased in two, other miscellaneous store retailers and specialty food stores. The two 
industries with the greatest decrease in productivity were lawn and garden equipment and supplies stores 
(-8.1 percent) and other motor vehicle dealers (-8.1 percent).

Labor Productivity Rose in Majority of Industries in 2018

Productivity increased in 13 of the 16 3-digit NAICS industries studied in 2018. Five industries had 
productivity gains of at least 4.0 percent, with the highest in nonstore retailers (11.5 percent) which 
also had the largest increase in output (9.8 percent). Among the three industries with productivity 
declines, gasoline stations experienced the largest drop (-1.6 percent).

Productivity increased in 32 of the 49 4-digit NAICS industries studied in 2018. Output grew in 35 
industries while hours worked grew in 29 industries.

In wholesale trade, productivity rose 1.6 percent as output grew 2.3 percent and hours worked increased 
0.7 percent. 
      • Productivity grew 3.6 percent in durable goods wholesalers and fell 1.3 percent in nondurable 
        goods wholesalers. 
      • Productivity increased in 10 of the 19 4-digit wholesale trade industries while output rose in 
        11 industries and hours worked grew in 12. 
      • The most rapid increase in productivity occurred in machinery and supply merchant wholesalers 
        (9.4 percent) because output grew at five times the rate of hours worked. 

In retail trade, productivity increased by 3.2 percent as output grew faster (3.3 percent) than hours 
worked (0.2 percent).
      • Productivity increased in 20 of the 27 4-digit retail trade industries while output grew in 20 
        industries and hours worked rose in 14. 
      • The largest productivity increase occurred in book stores and news dealers (23.0 percent) as 
        hours worked declined at over four times the rate of output.
      • Electronic shopping and mail-order houses experienced the largest growth in output (10.6 
        percent) resulting in an 11.0 percent increase in productivity.

In food services and drinking places, productivity increased by 1.6 percent as growth in output (3.6 
percent) outpaced growth in hours worked (2.0 percent). 
      • Within this industry group, drinking places (alcoholic beverages) was the only 4-digit 
        industry with a productivity decline (-0.7 percent). 
      • All three 4-digit industries had increases in hours worked and output. 

Unit Labor Costs Decline in One Third of Industries in 2018

When productivity gains outpace hourly compensation, unit labor costs decline. 
      • Unit labor costs fell in 6 out of 16 3-digit industries in 2018. All unit labor cost declines 
        occurred in industries where productivity rose. 
      • Unit labor costs declined in 5 of 19 wholesale trade and 12 of 27 retail trade 4-digit 
        industries. Two of three food services and drinking places industries had increases in unit 
        labor costs.
      • Hourly compensation, defined as labor compensation per hour worked, rose in 41 of the 49 
        4-digit industries.

Labor Productivity Increases Over the Long Term in Most Industries

From 1987 to 2018, labor productivity increased at an average annual rate of 2.7 percent in wholesale 
trade, 2.9 percent in retail trade, and 0.5 percent in food services and drinking places.
      • Among the 4-digit industries, productivity rose in 46 industries, declined in 2 industries, 
        and was unchanged in 1 industry from 1987 to 2018. 
      • Of the 46 4-digit industries with increasing productivity growth, 43 experienced rising output 
        while 27 had an increase in hours worked.
      • Median productivity among 4-digit  industries grew at an average annual rate of 1.9 percent.
      • Compared to the period 1987-2007, all three industry groups experienced a productivity slowdown 
        from 2007 to 2018. 
      • The number of 4-digit industries with increasing productivity dropped from 45 out of 49 during 
        the 1987-2007 period to 34 during the 2007-2018 period.

Long-term Trends in Unit Labor Costs Vary by Sector

From 1987 to 2018, unit labor costs increased at an average annual rate of 3.0 percent in food services 
and drinking places, the greatest change among the three industry groups. Unit labor costs increased by 
0.9 percent in wholesale trade and were unchanged in retail trade. 
      • Among the 4-digit industries, unit labor costs fell in 15 out of 49 industries from 1987 to 2018. 
        Unit labor costs declined in 2 out of 19 wholesale trade and in 13 out of 27 retail trade 
        industries. Unit labor costs increased in all food services and drinking places industries.
      • From 2007 to 2018, unit labor costs declined in 13 out of 49 industries. All industries with 
        declines in unit labor costs experienced increases in productivity.
      • During the 1987 to 2007 and 2007 to 2018 periods, electronics and appliance stores had the largest 
        unit labor cost declines and the largest productivity gains among the 3-digit industries.

Additional Information

The trade and food services and drinking places measures in this release incorporate benchmark data from 
the Census Bureau’s Service Annual Survey (November 2018), Annual Wholesale Trade Report (April 2019), 
Monthly Wholesale Trade Survey (May 2019), Annual Retail Trade Survey (April 2019), Annual Revision of 
the Monthly Retail and Food Services: Sales and Inventories (June 2019), and Nonemployer Statistics 
(June 2019). Accordingly, the labor productivity and output series for all industries have been revised 
for 2017 and earlier years. Additionally, the unit labor cost measures incorporate preliminary data from 
the BLS Quarterly Census of Employment and Wages (June 2019). 

Access the productivity data dashboard at www.bls.gov/lpc/lpc_by_industry_dashboard.xlsx for
      • Additional industries and sectors
      • Detailed data series: indexes of productivity and related measures; rates of change; and levels 
        of industry employment, hours worked, nominal value of production, and labor compensation 
      • Additional years and long-term data

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Last Modified Date: July 26, 2019