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Multifactor productivity down 1.7 percent in 2020

March 29, 2021

Private nonfarm business sector multifactor productivity decreased 1.7 percent in 2020, the largest decline since the Great Recession period of 2007–09. This 2020 decrease reflects a 4.2-percent decrease in output and a 2.5-percent decrease in the combined inputs of capital and labor.

Annual percent changes in multifactor productivity and related measures, 1988–2020
Year Multifactor productivity Combined inputs Output Capital services Labor input

1988

1.0% 3.5% 4.6% 3.8% 3.4%

1989

0.2 3.5 3.7 4.1 3.2

1990

0.1 1.4 1.5 3.4 0.4

1991

-0.4 -0.1 -0.5 3.1 -1.6

1992

2.9 1.1 4.0 2.6 0.5

1993

-0.4 3.6 3.1 3.4 3.6

1994

0.4 4.1 4.6 3.9 4.3

1995

0.2 3.3 3.5 4.5 2.7

1996

1.0 3.5 4.5 4.8 2.9

1997

0.9 4.2 5.1 5.4 3.5

1998

1.5 3.8 5.4 6.1 2.6

1999

2.1 3.5 5.7 6.5 2.1

2000

1.5 3.2 4.7 6.5 1.7

2001

0.5 0.4 0.9 4.9 -1.6

2002

2.0 -0.3 1.7 3.4 -2.0

2003

2.3 0.9 3.3 2.9 -0.1

2004

2.2 2.0 4.2 2.7 1.6

2005

1.5 2.4 4.0 3.4 1.9

2006

0.5 3.0 3.5 3.7 2.6

2007

0.5 2.0 2.5 3.4 1.2

2008

-1.2 0.1 -1.0 2.9 -1.4

2009

0.2 -3.8 -3.6 1.1 -6.6

2010

2.7 0.6 3.3 0.8 0.5

2011

-0.1 2.2 2.0 1.7 2.4

2012

0.7 2.4 3.2 2.0 2.7

2013

0.1 2.2 2.3 2.5 2.0

2014

0.6 2.6 3.2 2.8 2.5

2015

1.1 2.6 3.8 3.1 2.4

2016

-0.4 2.2 1.8 3.0 1.7

2017

0.5 2.2 2.8 2.7 1.9

2018

0.9 2.6 3.5 2.8 2.4

2019

0.7 1.8 2.5 3.0 1.0

2020

-1.7 -2.5 -4.2 2.4 -5.2

Capital services increased by 2.4 percent and labor input—which is the combined effect of hours worked and labor composition—decreased by 5.2 percent in 2020.

Multifactor productivity in the private nonfarm business sector grew at an average annual rate of 0.7 percent from 1987 to 2020, as output increased by 2.7 percent and combined inputs for capital and labor increased by 1.9 percent.

These data are from the Multifactor Productivity program. To learn more, see "Multifactor Productivity Trends — 2020." Multifactor productivity is calculated by dividing an index of real output by an index of combined units of labor input and capital services. Unlike BLS quarterly labor productivity (output per hour worked) measures, multifactor productivity measures include the influences of capital services and shifts in the composition of the workforce.

SUGGESTED CITATION

Bureau of Labor Statistics, U.S. Department of Labor, The Economics Daily, Multifactor productivity down 1.7 percent in 2020 at https://www.bls.gov/opub/ted/2021/multifactor-productivity-down-1-7-percent-in-2020.htm (visited July 29, 2021).

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