Manufacturing and Mining Labor Productivity

On April 25, 2024, the Bureau of Labor Statistics (BLS) updated measures for detailed industries in Productivity and Costs by Industry: Manufacturing and Mining Industries - 2023. Chart 1 reveals that labor productivity decreased in 19 of the 24 three-digit NAICS manufacturing and mining industries in 2023. Both output and hours fell in 10 industries.

Chart 1 data. Productivity change in three-digit NAICS manufacturing and mining industries, percent change, 2022-23

 

In 2023, the manufacturing sector accounted for 10.1 percent of nonfarm business sector employment (13.3 million jobs) and 10.3 percent of U.S. Gross Domestic Product (GDP). The mining sector employed approximately 606.9 thousand jobs, or 0.5 percent of all total nonfarm employees in 2023, and contributed 1.4 percent to GDP. This page examines two industry groups where hours worked fell more than output, resulting in productivity growth.

Automating fashion in textiles and apparel manufacturing

Three industries that produce textiles and apparel goods are notable for their productivity results in 2023. Textile mills (NAICS 313), textile product mills (NAICS 314), and apparel manufacturing (NAICS 315) all had growth in productivity that was caused by declines in hours worked that were greater than declines in output. The total number of workers fell by over seven percent and hours worked declined by more than nine percent in all three industries.

The productivity results in 2023 for textiles and apparel manufacturing represent a dramatic reversal from the prior two years. After decades of decline, these industries experienced a recovery coming out of the COVID-19 recession. Output grew in all three industries from 2020 to 2021. (See chart 2.)

Chart 2 data. Annual percent change in output for textile mills, textile product mills, and apparel manufacturing, 2020-23

 

The next year (2022), the total number of workers grew by 23,000 in all three industries combined. (See chart 3.) Despite these recent gains, the downturn in 2023 continues the longer-term trend of decline in these industries. When taken together, the three industries declined in employment by 8.7 percent, hours worked by 10.5 percent, and real sectoral output by 5.0 percent.

Chart 3 data. Total workers in textile mills, textile product mills, and apparel manufacturing, 2017-23

 

Despite the steep drop in hours worked, the three textiles and apparel manufacturing industries all experienced rising productivity as output fell by smaller amounts. Firms in this industry achieved these productivity gains by investing in advanced and high-tech manufacturing equipment. Some examples of new technology installed and operational in 2023 include state-of-the-art knitting machines, looms, fabric-finishing machines, and thermo-bonding equipment.^[1]

From the perspective of goods manufacturing industries as a whole, textile and garment manufacturing has been slower to implement automation of production. Because textiles are flexible rather than rigid, it has been more difficult to develop machines and equipment that can process them without extensive human intervention. This may be one reason that offshoring of production to countries with lower labor costs has been so prevalent. However, new automated cutting systems and automated sewing units are rapidly being developed and adopted worldwide.^[2] These labor-saving technologies have the potential to increase productivity in these industries in the years to come.

Mining metals for clean energy

Many types of metals are used as components of clean energy technology. Demand for this technology has grown in recent years as businesses seek to both reduce climate change and increase profits. Mining operations are currently attempting to increase production of metal ore used for green energy. However, this is easier said than done as in 2023 the amounts of metallic ore mined decreased from 2022. Output in the metal ore mining industry (NAICS 2122) declined 1.8 percent while hours worked fell 4.0 percent and labor compensation increased 2.3 percent. This caused productivity to increase 2.3 percent and unit labor costs to rise 4.2 percent in 2023. 

Minerals such as nickel, copper, iron, and gold are used in the production of green energy technology. The value of these minerals mined in the U.S. has risen steeply since 2019, although this is due more to price increases than volume of ore production.^[3] (See table 1).^[4]

Table 1. U.S. production of selected metallic minerals, 2019-23

Mineral	2023 Value of mined ore (millions of current dollars)	Volume of mined ore (2019-23 annual percent change)	Price (2019-23 annual percent change)
Iron Ore	7,480	-1.6%	16.3%
Gold Ore	10,385	-4.1%	8.0%
Copper	9,700	-3.3%	9.4%
Nickel	374	5.9%	12.2%
Sources: U.S. Bureau of Labor Statistics, U.S. Geological Survey

Nickel is not only critical to producing stainless steel, but it is also vital to manufacturing rechargeable lithium-ion batteries.^[5] The value of nickel mined in the U.S. has grown nearly 19 percent per year over the past 5 years. Along with numerous other applications, iron also has the capacity to act as a clean source of fuel, especially compared to carbon-based fuels.^[6] Copper is used in the manufacturing of solar panels, electric vehicles, and renewable power generating stations.^[7]Minerals like gold and silver are used in the production of solar panels to increase the photovoltaic efficiency (converting sunlight into electricity) of the panels.^[8] The market prices of all of these metals have risen with their increased demand.^[9]

The U.S. currently depends heavily on mineral imports to facilitate this green transition. Consequently, there has been a concerted effort to improve domestic metal production by increasing employment in the mining sector. Unfortunately, mineral ore producers are struggling to fill employment holes, partially because of the reputation of mining being a “dirty job.” Mining companies must also contend with the legacy of past mining disasters and accusations of harsh working conditions. Thus, fewer young people are choosing to work in the mining industry. Mining ranks low amongst people 15- to 30-years-old as a potential career field, and there has also been a decline in levels of college graduates in mining-related fields of study.^[10]

In order to attract workers, U.S. metal ore mining companies have increased hourly compensation 6.2 percent per year from 2019 to 2023. However, this effort has not resulted in significant increases in employment which only rose 0.6 percent per year over the same time period. The shortage of workers may be a factor in the decline of metal ore output which fell by an average rate of 2.7 percent annually since 2019. Unit labor costs is a measure that compares an industry’s compensation paid in order to produce output. The rapid growth of unit labor costs in metal ore mining of 7.3 percent annually from 2019 to 2023 is a clear indication of the labor struggles in this important industry. (See chart 4.)

Chart 4 data. Unit labor costs, hourly compensation, and productivity in metal ore mining, 2019-23

 

Related resources

Industries at a Glance: Manufacturing NAICS 31-33

Industries at a Glance: Mining, Quarrying, and Oil and Gas Extraction NAICS 21

Multifactor productivity slowdown in U.S. manufacturing

Dispersion Statistics in Productivity for U.S. manufacturing

Overview of BLS Productivity Statistics

Notes

^[1] “Annual U.S. textile investment roundup,” Textile World, March 27, 2024, https://www.textileworld.com/textile-world/features/2024/03/annual-u-s-textile-investment-roundup/.

^[2] Minyoung Suh, “Automated cutting & sewing for industry 4.0.” Textile World, February 13, 2024, https://www.textileworld.com/textile-world/knitting-apparel/2024/02/automated-cutting-sewing-for-industry-4-0/.

^[3] Value is defined as market price multiplied by the quantity of ore mined, for the purpose of this analysis.

^[4] The annual percent change is the change in a series from one year to the next as a percent of the series-value in the previous year. Over a period of more than one year, the annual percent change is the compound annual growth rate in an index series, or an annualized average growth rate. Because the change of an index series varies from year to year, the annual percent change for a long time period reflects the constant rate that can be applied to each year in a period, from the start to the end, that would give the same total result. It is calculated as (Ending Value/Starting Value)^(1/Number of Years)–1.

^[5] "Nickel: unsung hero of clean energy supply chains,” Aqua Metals, March 22, 2023, https://aquametals.com/news/nickel-unsung-hero-of-clean-energy-supply-chains/.

^[6] Patel Prachi, “Iron fuel shows its mettle: the plentiful metal could be a carbon-free fuel and store energy long term,” Institute of Electrical and Electronics Engineers, June 22, 2023, https://spectrum.ieee.org/iron-fuel.

^[7] "Clean energy technologies require minerals,” Society for Mining, Metallurgy, and Exploration, August 2021, https://www.smenet.org/What-We-Do/Technical-Briefings/Meeting-the-U-S-Minerals-and-Metals-Needs-for-Ene.

^[8] Ibid.

^[9] Ibid.

^[10] Yusuf Khan, “A ‘dirty’ job that few want: mining companies struggle to hire for the energy transition,” Wall Street Journal, June 1, 2023, https://www.wsj.com/articles/a-dirty-job-that-few-want-mining-companies-struggle-to-hire-for-the-energy-transition-7d62d2ae