Productivity and Costs by Industry: Selected Service-Providing Industries News Release

For release 10:00 a.m. (EDT) Thursday, June 27, 2024                                                  USDL-24-1209

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


PRODUCTIVITY AND COSTS BY INDUSTRY
SELECTED SERVICE-PROVIDING INDUSTRIES – 2023


Labor productivity rose in 15 of 30 selected service-providing industries in 2023, the U.S. Bureau of Labor 
Statistics reported today. This was the same number of industries as in 2022. Output rose in 16 industries in 
2023 while hours worked increased in 14 industries. Productivity ranged from a 7.2-percent decline in amusement 
parks and arcades to a 22.9-percent growth in natural gas distribution.

The ten largest four-digit NAICS industries by number of workers represent 80.7 percent of all workers in the 
selected service-providing industries covered by this news release. Among these ten industries, productivity growth 
was greatest in commercial banking (+5.8 percent) after rising slightly in the previous year. Couriers and messengers 
posted the most significant productivity decline (-7.1 percent). 

Long term measures of productivity and costs for pet care, except veterinary, services are available in this release 
for the first time. A new article in the BLS online publication "Beyond the Numbers" examines this industry in more 
detail. 

Trends in Labor Productivity in 2023

	• Labor productivity rose in half of the 30 selected service-providing industries in 2023.
	• There were two industries where productivity rose more than 10 percent: natural gas distribution (+22.9 
	  percent) and cable and other subscription programming (+12.4 percent). Output grew 22.2 percent in natural 
	  gas distribution and 8.9 percent in cable and other subscription programming. Hours worked decreased in 
	  both industries.
	• Amusement parks and arcades; travel arrangement and reservation services; and air transportation posted 
	  the largest increases in hours worked, resulting in decreasing productivity. This is a reversal from 2022 
	  and 2021 where these three industries led in productivity gains. 
	• Nine industries recorded a productivity decline that exceeded 3.5 percent. Of these industries, 7 showed a 
	  drop in output and 6 had a decline in hours worked.

Unit labor costs increased in 26 of the 30 selected industries in 2023. In 11 of these industries, productivity 
increased as well. Hourly compensation increased more than productivity in all 11 industries with both rising 
productivity and unit labor costs. Unit labor costs reflect the total labor costs required to produce a unit of 
output. Unit labor costs increase when hourly compensation growth exceeds productivity growth. Changes in labor 
productivity counter the impact of changes in hourly compensation on unit labor costs facing employers. 

Trends in Unit Labor Costs in 2023

	• The largest declines in unit labor costs were in natural gas distribution (-12.5 percent), cable and other 
	  subscription programming (-8.2 percent), and newspaper publishers (-5.0 percent). 
	• Two industries had growth in unit labor costs greater than 15 percent: couriers and messengers (+17.9 
	  percent), and postal service (+17.1 percent). Nine industries had unit labor cost growth of more than 10 
	  percent. All nine industries had decreases in productivity and increases in hourly compensation.
	• Hourly compensation rose in all 30 of the industries measured. 

2019 to 2023 Trends

Labor productivity increased in 23 out of 30 selected service-providing industries from 2019 to 2023. (See table 3.) 
Note that the annual percent changes for periods of more than 1 year are annualized average rates of change over the 
entire period, or a compound annual growth rate. The two industries with the highest productivity gains during this 
period were cable and other subscription programming (+9.2 percent per year) and gambling industries (+9.1 percent). 
The largest annual decline in productivity from 2019 to 2023 occurred in warehousing and storage (-8.7 percent).

Output increased in 22 out of 30 selected service-providing industries from 2019 to 2023. The two industries with the 
highest increases during this period were software publishers (+10.3 percent per year) and gambling industries (+8.7 
percent). The steepest annual declines in output during this period were postal service (-3.8 percent) and newspaper 
publishers (-3.1 percent).

Hours worked decreased in 17 of the 30 selected service-providing industries from 2019 to 2023. The two industries 
with the largest decreases in hours worked over the 4 years were newspaper publishers (-9.1 percent per year) and 
periodical publishers (-6.9 percent). The industries with the largest increases in hours worked during this period 
were warehousing and storage (+9.6 percent) and software publishers (+9.4 percent).  

Trends in Long-Term Productivity Through 2022

Long-term productivity rose in 47 out of 59 service-providing industries. (See table 2.) For most industries studied, 
this period extends from 1987 to 2022, the latest year for which data are available for all 59 selected 
service-providing industries published on the BLS website. None of the rates in this section incorporate data for 
2023. Measures for some industries begin in years later than 1987. 

	• Median long-term productivity growth for all 59 industries was approximately 1.5 percent per year, ranging 
	  from a decline of 2.6 percent per year in golf courses and country clubs to an increase of 11.3 percent in 
	  wireless telecommunications carriers.
	• Output increased over the long term in 45 industries while hours worked increased in 38 industries.
	• Productivity increased in 39 of the 59 industries over the business cycle preceding the pandemic: 2007 to 
	  2019. During this period, 39 industries had increases in output and 32 saw growth in hours worked. 
	• Pet care, except veterinary, services is published for the first time in this release. Long-term annual 
	  changes for this industry are for 2004-2022. Labor productivity has decreased 2.1 percent per year, with 
	  output increasing 5.9 percent and hours worked rising 8.2 percent per year.

Additional Information

The productivity and costs measures in this release incorporate data from the Census Bureau's Service Annual Survey 
(January 2024). Accordingly, the labor productivity and output series for all industries have been revised for 2022 
and earlier years.

Measures of hours worked for all industries reflect a change in methods and are revised historically. Estimates of 
hours worked by self-employed workers and unpaid family workers reflect a method change that makes industry-level 
estimates consistent with the newly composited quarterly major sector estimates that remove variability during 
seasonal adjustment and reduce volatility in these workers. A more detailed discussion of the changes is available 
in the Monthly Labor Review at www.bls.gov/opub/mlr/2023/article/an-improved-estimate-of-self-employment-hours.htm. 

More information about the North American Industry Classification System (NAICS) can be found at 
www.census.gov/naics/.

The following NAICS codes are included in Tables 1 and 3 but not counted in the short-term count of 30 selected 
industries because they are duplicate codes or aggregates for which full underlying coverage is published:  22, 221, 
484, 4841, 4911, 4931, 511, 5111, 515, 5173, 54121, 722, and 72251.

The following NAICS codes are included in Table 2 but not counted in the long-term count of 59 selected industries 
because they are duplicate codes or aggregates for which full underlying coverage is published:  22, 221, 484, 4841, 
4842, 491, 493, 4931, 511, 5111, 515, 5151, 5173, 5412, 54121, 5615, 6215, 6221,3, 7131, 72, 721, 7211, 722, 72251, 
8121, and 8123.

Access the productivity data dashboard at www.bls.gov/productivity/tables/labor-productivity-detailed-industries.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

Subscribe to productivity news releases on the BLS website at 
https://public.govdelivery.com/accounts/USDOLBLS/subscriber/new.

If you are deaf, hard of hearing, or have a speech disability, please dial 7-1-1 to access telecommunications relay 
services. 

Technical Note

Labor Productivity: Labor productivity describes the relationship between real output and the labor hours 
involved in its production. These measures show the changes from period to period in the amount of goods 
and services produced per hour worked. Although the labor productivity measures relate output in an 
industry to hours worked of all persons in that industry, they do not measure the specific contribution of 
labor to growth in output. Rather, they reflect the joint effects of many influences, including: changes 
in technology; capital investment; utilization of capacity, energy, and materials; the use of purchased 
services inputs, including contract employment services; the organization of production; the 
characteristics and effort of the workforce; and managerial skill.

Unit Labor Costs: Unit labor costs represent the cost of labor required to produce one unit of output. 
The unit labor cost indexes are computed by dividing an index of nominal industry labor compensation by an 
index of real industry output. Unit labor costs also describe the relationship between compensation per 
hour and real output per hour (labor productivity). Increases in hourly compensation increase unit labor 
costs; increases in labor productivity offset compensation increases and reduce unit labor costs.

Output: Real industry output is measured as an annual-weighted index of the changes in the various 
products (in real terms) provided for sale outside the industry. Real industry output is usually derived by 
deflating nominal sales or values of production using BLS price indexes, but for some industries it is 
measured by physical quantities of output. 

Industry output measures are constructed primarily using data from the economic censuses and annual surveys 
of the U.S. Census Bureau, U.S. Department of Commerce, together with information on price changes from BLS. 
Other data sources include: the Energy Information Administration, U.S. Department of Energy; the Bureau of 
Transportation Statistics, U.S. Department of Transportation; the U.S. Postal Service; the Postal Rate 
Commission; and the Federal Deposit Insurance Corporation. Data from the Quarterly Service Survey from the 
Census Bureau are used to construct preliminary output measures for 2023 for some industries. Data from both 
the Census Bureau's Quarterly Service Survey and Monthly Retail Trade Survey are used to construct 
preliminary output measures for 2023 for some industries.

Labor Hours: Labor hours are measured as annual hours worked by all employed persons in an industry. This 
includes hours worked for pay as well as uncompensated work time. Data on industry employment and hours come 
primarily from the BLS Current Employment Statistics (CES) survey and Current Population Survey (CPS). CES 
data on the number of total and production worker jobs held by wage and salary workers in nonfarm establishments 
are supplemented with CPS self-employed and unpaid family worker data to estimate industry employment. Hours 
worked estimates are derived using CES and CPS employment, CES data on the average weekly hours paid of 
production workers, CPS data on hours of nonproduction, self-employed, and unpaid family workers, and ratios of 
hours worked to hours paid based on data from both the CPS and the National Compensation Survey (NCS). For some 
industries, employment and hours data are supplemented or further disaggregated using data from the BLS 
Quarterly Census of Employment and Wages (QCEW), the Census Bureau, or other sources. Additional sources of 
employment and hours data for certain service industries include the Association of American Railroads, the 
U.S. Department of Transportation, and the U.S. Postal Service. Hours worked are estimated separately for 
different types of workers and then are directly aggregated; no adjustments for labor composition are made.

Labor Compensation: Labor compensation, defined as payroll plus supplemental payments, is a measure of the cost 
to the employer of securing the services of labor. Payroll includes salaries, wages, commissions, dismissal pay, 
bonuses, vacation and sick leave pay, and compensation in kind. Supplemental payments include both legally 
required expenditures and payments for voluntary programs. The legally required portion consists primarily of 
federal old age and survivors' insurance, unemployment compensation, and workers' compensation. Payments for 
voluntary programs include all programs not specifically required by legislation, such as the employer portion 
of private health insurance and pension plans. Industry compensation measures are constructed primarily using 
data from the economic censuses and annual surveys of the Census Bureau, U.S. Department of Commerce. The 
estimates for 2023 are constructed using data from the BLS Quarterly Census of Employment and Wages (QCEW).

Annual Percent Change: The annual percent change is the compound annual growth rate in an index series over a 
period of more than one year. The change of an index series varies from year to year. However, the annual 
percent change is the constant rate that can be applied to each year in a period, from the start to the end, 
that would give the same total result. It is calculated as (Ending Value/Starting Value)^(1/Number of Years)-1.