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Multifactor productivity rose 1.0 percent in 2018

April 03, 2019

In 2018, private nonfarm business sector multifactor productivity increased 1.0 percent, compared with an average annual rate of 0.8 percent for the 1987–2018 period. For the 2007–18 period, multifactor productivity grew at an average annual rate of 0.4 percent.

Average annual percent change in labor productivity and the contributions of multifactor productivity, capital intensity and labor composition to labor productivity, private nonfarm business, 1987–2018
Period Labor productivity Contribution of labor composition Contribution of capital intensity Multifactor productivity

1987–2018

2.0% 0.3% 0.9% 0.8%

1987–1990

1.5 0.4 0.7 0.4

1990–1995

1.7 0.4 0.7 0.6

1995–2000

2.9 0.2 1.2 1.4

2000–2007

2.8 0.3 1.1 1.4

2007–2018

1.3 0.2 0.7 0.4

Labor productivity growth can be viewed as the sum of three components: multifactor productivity growth, the contribution of capital intensity, and the contribution of shifts in labor composition. The contribution of capital intensity grew 0.7 percentage points in the 2007–18 period and remains the largest contributor to labor productivity growth in the period.

These data are from the Multifactor Productivity program. To learn more, see "Multifactor Productivity Trends — 2018." Multifactor productivity is calculated by dividing an index of real output by an index of combined units of labor input and capital services.

SUGGESTED CITATION

Bureau of Labor Statistics, U.S. Department of Labor, The Economics Daily, Multifactor productivity rose 1.0 percent in 2018 on the Internet at https://www.bls.gov/opub/ted/2019/multifactor-productivity-rose-1-point-0-percent-in-2018.htm (visited September 19, 2020).

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