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Productivity glossary

The glossary provides common productivity-related vocabulary and their definitions. For detailed methods and calculations refer to the Handbook of Methods.

A B C D E F G H I K L M N O P R S T U V W

Average weekly hours
The total number of hours worked in a year or quarter divided by the number of weeks in that period.

Business sector
A subsector of the total economy that excludes general government, private households, and nonprofit institutions.

Capital asset price deflator
The relative change over time in the acquisition cost of a capital asset.
Capital asset share in industry capital income
The proportion of the total capital costs attributed to a particular capital asset.
Capital composition
The portion of change in capital input that cannot be attributed to changes in capital stock.
Capital cost used
The actual capital cost values used in calculations after determining whether to use costs based on internal or external rates of return.
Capital costs
The payments to capital input for use in the production of goods and services.
Capital costs based on external rate of return
Capital costs calculated using a general rate of return across the entire private business sector.
Capital costs based on internal rate of return
Capital costs calculated using the rate of return to investment specific to the industry examined.
Capital input
The contribution to production from capital assets. Capital assets are the productive tools (equipment, structures, inventories, land, intellectual property, etc.) that can be re-used in future time periods after they are purchased.
Capital input to wealth stock ratio
The ratio of capital input to the value of existing stocks of capital assets, discounted to reflect the future services expected from them.
Capital intensity
The ratio of the amount of capital input used relative to the amount of labor hours used to produce output of goods and services.
Capital investment
The payments made to acquire capital assets to produce goods and services.
Capital price deflator
The relative change over time in the cost to utilize units of capital input to produce goods and services.
Capital productivity
The efficiency at which capital input is used to produce output of goods and services.
Capital rental price
The price paid to rent capital used in the production of goods and services. Since capital is actually owned (rather than rented), this price is estimated.
Capital share
The proportion of current-dollar output production attributed to the use of capital input.
Combined inputs
The aggregate of measured inputs that are used to produce goods and services. These can include capital, labor, energy, raw materials, and purchased services.
Combined inputs costs
The payments and implicit compensation to utilize all inputs to produce goods and services.
Combined inputs price deflator
The relative change over time in the value of money spent to use all inputs for production. This information helps make combined input utilization in different time periods comparable.
Compound annual rate
A single growth rate which, if applied every year over a span of multiple years, would make a beginning value grow to a target value at the end.
Constant dollar
Dollar values that have been adjusted to remove the effects of price-level changes over time, allowing for meaningful comparison of real values from different time periods.
Consumer price deflator
An index that measures changes in the level of consumer prices.
Contribution of all other capital input intensity to labor productivity
The portion of labor productivity change attributed to the change in the use of equipment, structures, residential structures, inventories, and land capital inputs relative to hours worked.
Contribution of all other intellectual property products intensity
The portion of labor productivity change attributed to the change in the use of unclassified intellectual property products relative to hours worked.
Contribution of capital input excluding ipp and ipe intensity to labor productivity
The portion of labor productivity change attributed to the change in the use of capital input, excluding intellectual property products and information processing equipment, relative to hours worked.
Contribution of capital intensity to labor productivity
The portion of labor productivity change attributed to the change in the use of capital relative to hours worked.
Contribution of energy intensity to labor productivity
The portion of labor productivity change attributed to the change in the use of energy relative to hours worked.
Contribution of information capital intensity to labor productivity
The portion of labor productivity change attributed to the change in the use of information capital inputs relative to hours worked.
Contribution of information processing equipment (ipe) intensity to labor productivity
The portion of labor productivity change attributed to the change in the use of information processing equipment capital inputs relative to hours worked. Information processing equipment capital includes asset types such as computers and communications equipment.
Contribution of intellectual property products excluding r&d intensity to labor productivity
The portion of labor productivity change attributed to the change in the use of intellectual property products capital inputs, excluding R&D, relative to hours worked. Intellectual property products capital consists of software, research and development (R&D) and artistic original assets.
Contribution of intellectual property products intensity to labor productivity
The portion of labor productivity change attributed to the change in the use of intellectual property products capital inputs relative to hours worked. Intellectual property products capital consists of software, research and development (R&D), and artistic original assets.
Contribution of intermediate inputs intensity to labor productivity
The portion of labor productivity change attributed to the change in the use of energy, materials, and services relative to hours worked.
Contribution of labor composition to labor productivity
The portion of labor productivity change attributed to the change in the composition of the labor force.
Contribution of materials intensity to labor productivity
The portion labor productivity change attributed to the change in the use of materials relative to hours worked.
Contribution of other capital input intensity to labor productivity
The portion of labor productivity change attributed to the change in the use of equipment, structures, residential structures, inventories, and land capital inputs relative to hours worked.
Contribution of research and development intensity to labor productivity
The portion of labor productivity change attributed to the change in the use of research and development relative to hours worked.
Contribution of services intensity to labor productivity
The portion of labor productivity change attributed to the change in the use of services relative to hours worked.
Current dollar
Current dollar values are measured in dollars paid at that time and have not been adjusted to remove the effects of monetary price changes (i.e. inflation) over time. Thus, current dollar values from different time periods are not necessarily comparable.

Durable manufacturing sector
The subsector of the total economy that includes manufacturing establishments primarily engaged in the production of durable goods, including machinery, equipment, computers, etc.

Employment
The number of jobs in a given sector. An individual who works multiple jobs has each of their jobs counted in the employment measure, as this measure is a count of jobs, not persons. The types of workers in the employment measure may either include (a) employees-only (also referred to as wage and salary workers) or (b) all workers—which includes employees, unincorporated self-employed workers, and unpaid family workers.
Energy costs
The payments to purchase energy for use in the production of goods and services.
Energy input
The fuel, electricity, and other forms of energy used to produce goods and services.
Energy intensity
The ratio of the amount of energy used relative to the amount of labor hours used to produce output of goods and services.
Energy price deflator
The relative change over time in the cost to acquire units of energy to produce goods and services.
Energy productivity
The efficiency at which energy inputs are used to produce output of goods and services.
Energy share
The proportion of current-dollar output production attributed to the use of energy.
External rate of return
This is the general rate of return to investment for the economy as a whole and is identical across all industries. It is therefore “external” to any particular industry.

Fisher index
The geometric mean of a Laspeyres index and a Paashe index.

Government enterprises
Business establishments that are sponsored or supported by the government.
Gross output
The current dollar value of output produced, which includes sales or receipts, commodity taxes, changes in inventories, sales to final users in the economy (GDP), and sales to other industries (intermediate inputs).
Gross output price deflator
The relative change in the price of gross output.

Hourly compensation
The sum of wage and benefits paid per hour of work.
Hours worked
The number of labor hours worked by all workers, including wage and salary workers, unincorporated self-employed workers, and unpaid family workers, in the production of goods and services.

Industry
A group of business or government establishments that produce similar products or provide similar services as defined by classification systems such as the North American Industrial Classification System (NAICS).
Information capital
The aggregation of capital assets classified as information capital. This includes asset types such as computers and communications equipment.
Input-output price ratio
The ratio of the aggregate price of capital input and labor hours relative to the price of output.
Intermediate inputs
The goods and services (including energy, raw materials, semi-finished goods, and services that are purchased from all sources) that are used in the production of other goods or services rather than for final consumption.
Intermediate inputs costs
The payments to purchase intermediate inputs (energy, materials, and services) to produce goods and services.
Intermediate inputs intensity
The ratio of the amount of intermediate inputs used relative to the amount of labor hours used to produce output of goods and services.
Intermediate inputs price deflator
The relative change over time in the cost to acquire units of intermediate inputs to produce goods and services.
Intermediate inputs productivity
The efficiency at which intermediate inputs are used in the production of goods and services.
Intermediate inputs share
The proportion of current-dollar output attributed to the use of intermediate inputs (energy, materials, and services).
Intermediate inputs to hours ratio
The change in the amount of intermediate inputs used relative to the change in the amount of labor used to produce output of goods and services.
Internal rate of return
The rate of return on investments in capital purchases that is specific to each particular industry. In other words, this rate is “internal” to each unique industry.

KLEMS
An acronym for Capital, Labor, Energy, Materials, and Services, which are the basic inputs into the production process.

Labor compensation
Payments to labor to produce goods and services, including wages, benefits and other monetary or nonmonetary payments.
Labor composition
The degree to which shifts in the age, education, and gender of the work force affect measures of labor input.
Labor input
A wage-weighted aggregate of hours worked, that differentiates hours by the characteristics of age, education, and gender.
Labor price deflator
The relative change over time in the payments to labor for the production of goods and services.
Labor productivity
The efficiency with which goods and services are produced via labor hours; often referred to as output per hour.
Labor share
The proportion of current-dollar output attributed to the use of labor.

Major sector
A broad category of industries which are related to each other through similar economic activity such as business and nonfarm business.
Materials costs
The payments to purchase materials for use in the production of goods and services.
Materials input
Goods and commodities that are consumed, combined, and/or transformed in the production process to create other goods and services.
Materials intensity
The ratio of the amount of material input used relative to the amount of labor hours used to produce output of goods and services.
Materials price deflator
The relative change over time in the cost to acquire units of materials to produce goods and services.
Materials productivity
The efficiency with which material inputs are used to produce output of goods and services.
Materials share
The proportion of current-dollar output attributed to the use of materials.
Measure
A numeric value that represents an aspect of size, scale, central tendency, growth, etc. Examples includes measures of productivity, measures of output, and measures of labor hours.
Motor vehicle tax
The tax rate for autos, trucks, buses, and trailers used to determine the rental price of motor vehicle related assets.

NAICS
An acronym for North American Industry Classification System which is a classification system developed jointly by the U.S., Canada, and Mexico to provide improved comparability in industrial statistics across North America.
NIPA
An acronym for National Income and Product Accounts, which is the Bureau of Economic Analysis’ (BEA) economic account that shows the value and composition of national output and the distribution of incomes generated in its production.
Nondurable manufacturing sector
The subsector of the total economy that includes manufacturing establishments primarily engaged in the production of nondurable goods, including food products, chemicals, apparel, etc.
Nonfarm business sector
A subsector of the total economy that excludes general government, private households, nonprofit institutions, and the farm sector.
Nonfinancial corporate sector
A sector that includes only corporate businesses and excludes the financial sector.
Nonfinancial corporations
Nonfinancial corporations, relative to the business sector, exclude unincorporated businesses and those corporations classified as offices of bank holding companies, other holding companies, and offices in the finance and insurance sector.
Nonlabor costs
A series that is specific to the nonfinancial corporate sector and equals nonlabor payments minus profits. Contains consumption of fixed capital, taxes on production and imports less subsidies, net interest and miscellaneous payments, and business current transfer payments.
Nonlabor payments
Output minus compensation. Contains profits, consumption of fixed capital, taxes on production and imports less subsidies, net interest and miscellaneous payments, business current transfer payments, rental income of persons, and the current surplus of government enterprises.
Nonprofit institutions
Establishments operated on a not-for-profit basis according to U.S. tax law.

Output
The amount of goods and services produced.
Output per worker
The efficiency with which goods and services are produced via workers.
Owner-occupied housing
A form of housing tenure where the occupant owns the home in which they live, rather than paying rent.

Price deflator
The change in the value of currency over time which can be used to convert current-dollar values to constant-dollar values.
Private business sector
The sector that includes privately-owned (non-government) establishments that are operated for profit. Equals the business sector minus government enterprises.
Private nonfarm business sector
The sector that includes privately-owned (non-government) establishments outside of the farm sector that are operated for profit. Equals the nonfarm business sector minus government enterprises.
Productive capital stock
The amount of capital assets that are used in the production of goods and services. Older assets lose efficiency and produce relatively less output, and this effect is accounted for in values of productive capital stock.
Productive capital stock to wealth stock ratio
The ratio of the implicit amount of new investment that would be required to produce the same present-day services as the existing level of capital assets to the value of existing stocks of capital assets, discounted to reflect the future services expected from them.
Productivity
A measure of economic efficiency that shows how effectively economic inputs are converted into goods and services.
Profits
The portion of total income from the sale of goods and services that exceeds the total costs of producing those goods and services.
Property tax
The tax rate for property used to determine the rental price of property-related assets.

Rate of change
A mathematical function that gauges the rate at which a measure changes over time. It is calculated using the ratio of the change in the measure to the change in time.
Real gross output
The total output produced, which includes changes in inventories, output to final users in the economy (GDP), and output to other industries (intermediate inputs).
Real hourly compensation
The average payments and benefits made to individuals for an hour of labor, adjusted for inflation.
Real sectoral output
The amount of goods and services produced by an industry for delivery to consumers outside that industry.
Real value-added output
The output produced that has been adjusted for changes in inventory (gross output) and the removal of intermediate inputs (energy, material, and services).
Rental price used
An approximation of the price to rent a unit of capital for a given period of time.
Rental price with external rate of return
Rental price which incorporates the user’s opportunity cost for forgoing a market rate of return for the capital asset.
Rental price with internal rate of return
Rental price which incorporates the owner’s opportunity cost for giving up the use of the capital asset.

Seasonally adjusted
Statistical modification to remove the influences of predictable patterns over a year, to allow more consistent comparison across time periods, including months and quarters.
Sectoral output
The current dollar value of goods and services produced by an industry for delivery to consumers outside that industry.
Sectoral output price deflator
The relative change in the price of sectoral output over time.
Services costs
The payments made to purchase services for use in the production of goods and services.
Services input
The services purchased from an outside entity, including contract work, for use in the production of goods and services.
Services intensity
The ratio of services input used relative to the amount of labor hours used to produce output of goods and services.
Services price deflator
The relative change over time in the cost to acquire services input to produce goods and services.
Services productivity
The efficiency at which services input is used to produce goods and services.
Services share
The proportion of current-dollar output production attributed to the use of services.
Sources of growth in real output
Sources of output growth include total factor productivity, the contribution of labor input (labor hours and labor composition), and the contribution of capital input (capital stock and capital composition).
Sources of labor productivity growth
Sources of labor productivity growth include total factor productivity growth (improvements in technology, improvements in economies of scale, improvements in management techniques), capital intensity growth (capital per hour), and labor composition growth (improvements in the skills of the labor force).

Tax parameter
The combination of the corporate income tax, the present value of $1 of tax depreciation allowances, and the effective rate of investment tax credit used to determine the implicit rental price of capital assets.
Time series
A set of numbers that represents the change over time in some measure.
Tornqvist index
An index for expressing the aggregation of growth rates using a value-share weighted geometric mean of growth rates.
Total factor productivity
The efficiency at which combined inputs are used to produce output of goods and services.

Unit capital costs
The payments for capital input used to produce each unit of goods and services.
Unit combined input costs
The total payments for each unit of output produced.
Unit labor costs
The payments for labor services used to produce each unit of goods and services.
Unit nonlabor costs
The nonlabor costs associated with each unit of goods and services produced, calculated as nonlabor costs divided by output.
Unit nonlabor payments
The nonlabor payments associated with each unit of goods and services produced, calculated as nonlabor payments divided by output.
Unit profits
Corporate profits before taxes with inventory valuation and capital consumption adjustments. Total unit costs, less labor costs, are profits.

Value-added output
The current dollar value of output that has been adjusted for changes in inventory (gross output) and the removal of intermediate inputs (energy, material, and services).
Value-added output price deflator
The relative change in the price of value-added output.

Wealth stock
The value of existing stocks of capital assets, discounted to reflect the future services expected from them.
Wealth stock depreciation rate
The rate at which the value of an asset or group of assets declines with age.
Workers
People with jobs producing goods and services.