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Multifactor productivity increases in computer and electronics manufacturing industries, 1987–2014

September 26, 2016

Multifactor productivity grew at a 12.8 percent annual rate in the computer and peripheral manufacturing industry from 1987 to 2014. This was the highest growth among the six computer and electronics manufacturing industries that are measured. Multifactor productivity in semiconductors and electronic components manufacturing increased at a 9.6 percent annual rate. Strong growth in multifactor productivity was the dominant source of labor productivity growth in these industries. Labor productivity grew at a 16.6 percent annual rate in computer and peripherals and 13.7 percent in semiconductors and electronic components. In contrast, multifactor productivity growth in industries that manufacture electronic instruments (+1.1 percent), magnetic media (+2.1 percent), audio and video equipment (+2.7 percent), and communications equipment (+2.9 percent) was much more modest.

Average annual percent change in contributions to labor productivity in the computer and electronic product manufacturing industries, 1987–2014
Industry Multifactor productivity Labor productivity Contribution of capital intensity Contribution of intermediate purchases intensity

Computer and peripheral equipment

12.8% 16.6% 1.3% 2.0%

Communications equipment

2.9 6.0 0.9 2.1

Audio and video equipment

2.7 3.4 0.5 0.1

Semiconductors and electronic components

9.6 13.7 2.6 1.1

Electronic instruments

1.1 3.6 0.6 1.8

Magnetic media manufacturing and reproducing

2.1 1.7 0.6 - 1.0

More industries experienced multifactor productivity growth over the long term than the short term. From 1987 to 2014, multifactor productivity grew in 54 of the 86 manufacturing industries measured, compared to 38 in 2014. Average annual rates of change in multifactor productivity for nearly all manufacturing industries ranged between −2.0 percent and 2.0 percent over the long term. In contrast, multifactor productivity declined by 2.0 percent or more in 19 industries in 2014. Between 1987 and 2014, the number of manufacturing industries with growth in multifactor productivity was highest in 2003 and 2010. These were years of economic growth following recessions. In contrast, relatively few manufacturing industries saw multifactor productivity growth in the recession years of 2001 and 2009.

These data are from the Multifactor Productivity program. To learn more, see "Multifactor Productivity Trends for Detailed Industries — 2014" (HTML) (PDF).

SUGGESTED CITATION

Bureau of Labor Statistics, U.S. Department of Labor, The Economics Daily, Multifactor productivity increases in computer and electronics manufacturing industries, 1987–2014 on the Internet at https://www.bls.gov/opub/ted/2016/multifactor-productivity-increases-in-computer-and-electronics-manufacturing-industries-1987-2014.htm (visited November 12, 2019).

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