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Trends in manufacturing productivity, 1990–2019

October 07, 2021

From 1990 to 2007, manufacturing productivity contributed 0.72 percentage points of the 3.5 percent growth in private business output. This means manufacturing accounted for 21 percent of the nation’s output growth. Of manufacturing output growth, nearly four-fifths of it resulted from multifactor productivity, followed by capital investment.

Percentage point contributions of manufacturing to private business output growth, 1990–2007
Contribution to output growth Percentage point contributions

Multifactor productivity

0.57 percentage point(s)

Capital

0.22

Labor

-0.07

From 2007 to 2019, private business output growth slowed to 2.0 percent. Manufacturing multifactor productivity went from being the largest productivity driver of private business output growth to being a drag on the nation’s output. However, the nonmanufacturing economy’s multifactor productivity performed about as well in 2007–19 as it had in 1990–2007.

Percentage point contributions of multifactor productivity in manufacturing and nonmanufacturing to private business output growth, 1990–2007 and 2007–19
Contribution to output growth Manufacturing multifactor productivity Computer and electronic products multifactor productivity Nonmanufacturing multifactor productivity

1990–2007

0.57 percentage point(s) 0.44 percentage point(s) 0.44 percentage point(s)

2007–19

-0.13 0.06 0.45

In the manufacturing sector, the computer and electronic products industry is the main driver. Of the 0.57 percentage point contribution from manufacturing multifactor productivity in 1990–2007, about 75 percent of that came from the computer and electronics products industry. In 2007–19, however, multifactor productivity contribution from computer and electronic products slowed to just 0.06 percentage points.

These data are from the Multifactor Productivity program. To learn more, see The U.S. productivity slowdown: an economy-wide and industry-level analysis and Multifactor productivity slowdown in U.S. manufacturing. Multifactor productivity growth represents the portion of output growth that is not accounted for by the growth of capital and labor inputs. Multifactor productivity growth results from contributions of other inputs, such as technological advances in production, the introduction of a more streamlined industrial organization, relative shifts of inputs from low to high productivity industries, increased efforts of the workforce, and improvements in managerial efficiency.

SUGGESTED CITATION

Bureau of Labor Statistics, U.S. Department of Labor, The Economics Daily, Trends in manufacturing productivity, 1990–2019 at https://www.bls.gov/opub/ted/2021/trends-in-manufacturing-productivity-1990-2019.htm (visited October 19, 2021).

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