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Manufacturing multifactor productivity declined 1.0 percent in 2018

January 30, 2020

Multifactor productivity in manufacturing declined 1.0 percent in 2018. The decline reflected a 0.6-percent decrease in manufacturing output and a 0.3-percent increase in combined inputs. The 2018 decrease in multifactor productivity followed a revised 0.3-percent increase in 2017. Among the 18 manufacturing industries, 13 experienced declines in multifactor productivity in 2018.

Annual percent changes in multifactor productivity for manufacturing industries in selected periods, 1987–2018
Industry 1987–2018 2007–18 2017–18

Manufacturing

0.9% -0.4% -1.0%

Primary metals

0.4 0.1 -4.1

Transportation equipment

1.1 -0.4 -2.4

Petroleum and coal products

0.5 -0.4 -2.1

Wood products

-0.2 0.3 -1.8

Apparel, leather, and allied products

-0.2 0.5 -1.4

Electrical equipment, appliances, and components

0.1 -0.1 -1.1

Plastics and rubber products

0.5 -0.1 -0.6

Textile mills and textile product mills

0.4 -0.3 -0.5

Food, beverage, and tobacco products

-0.2 -0.7 -0.3

Paper products

0.0 -0.3 -0.3

Nonmetallic mineral products

0.2 0.2 -0.2

Fabricated metal products

-0.2 -0.9 -0.1

Furniture and related products

-0.1 -0.2 -0.1

Chemical products

-0.5 -1.6 0.5

Miscellaneous manufacturing

0.8 0.0 0.7

Computer and electronic products

6.2 2.4 1.2

Machinery

-0.1 -0.7 1.3

Printing and related support activities

0.7 0.6 1.6

The largest declines in multifactor productivity in 2018 were in primary metals and transportation equipment. Printing and related support activities and the machinery industry showed the largest gains in multifactor productivity. Output declined in 13 industries; the fourth year in which at least half of manufacturing industries reported output declines.

From 1987 to 2018, multifactor productivity in manufacturing grew at an average annual rate of 0.9 percent. Manufacturing output increased at an average annual rate of 1.5 percent, faster than the 0.5-percent average annual increase in combined inputs.

For the more recent 2007–18 period, multifactor productivity in manufacturing declined at a 0.4-percent average annual rate.

These data are from the Multifactor Productivity program. To learn more, see “Multifactor Productivity Trends in Manufacturing — 2018.” Also see our video that explains how we measure multifactor productivity. Multifactor productivity is calculated by dividing an index of real output by an index of combined inputs of labor, capital services, energy, materials, and purchased business services.

SUGGESTED CITATION

Bureau of Labor Statistics, U.S. Department of Labor, The Economics Daily, Manufacturing multifactor productivity declined 1.0 percent in 2018 on the Internet at http://www.bls.gov/opub/ted/2020/manufacturing-multifactor-productivity-declined-1-percent-in-2018.htm (visited August 14, 2020).

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