Water, Sewage, and Other Systems: Experimental Measures for Local Government and Private Enterprises

On February 16, 2023, the Bureau of Labor Statistics (BLS) introduced experimental measures of output per worker and related series for the water, sewage, and other systems industry (NAICS 2213X) that expanded coverage to include local government enterprises.

October 2026 Update

On October 5, 2026, BLS updated these measures through 2023. Output per worker fell 1.5 percent in 2023, the largest such decrease since 2015. (See chart 1.) This decline was the third consecutive year of falling output per worker in the industry. Output rose 1.1 percent in 2023 and employment jumped by 2.6 percent.

Output per Worker: Expanding Industry Coverage

BLS publishes measures of labor productivity, unit labor costs, output, hours worked, and labor compensation for water, sewage, and other systems in its Selected Service-Providing Industries Economic News Release. These measures cover privately owned systems. To represent a broader picture of this industry, BLS publishes experimental output, employment, and output per worker measures that also include local government enterprises.^[1] These experimental estimates for the industry indicate that, in 2023, 73 percent of employment and 89 percent of output were in local government. State and federal enterprises are not included but appear to make up a small portion of the industry based on incomplete Quarterly Census of Employment and Wages (QCEW) employment data and U.S. Census Bureau revenue data.

These experimental measures use data on local government enterprises from the Census Bureau’s Annual Survey of State and Local Government Finances. Private sector revenues come from Census’s Annual Integrated Economic Survey (beginning in 2023) and Service Annual Survey (SAS, through 2022). Price data from the same Consumer Price Index (CPI) serve to deflate the revenues for an industry output index.^[2]

BLS normally measures productivity as output per hour worked, using data on hours per worker from the Current Employment Statistics (CES) program. Because data on government workers are unavailable, the BLS experimental measures combine QCEW employment data for local government workers with the CES private sector employment. Thus, BLS publishes a more limited measure of productivity: output per worker. The output per worker measure for the experimental water, sewage, and other systems industry is the ratio of combined output and employment indexes.

The most recent increase in output per worker occurred in 2020 during the COVID-19 pandemic. Employment in the industry fell 0.8 percent that year as payrolls contracted in most industries. Meanwhile, a sustained high demand for residential water helped lift the industry’s output modestly (0.3 percent).^[3] The next three years saw continuing slow growth in output, but accelerating annual growth in employment: 0.4 percent in 2021, 1.5 percent in 2022, and 2.6 percent in 2023.

Chart 2 breaks out the trends of output per worker by ownership sector: local government, private, and combined. In the business cycle that began in 2019 (before the pandemic recession), output per worker fell slightly; neither local government nor private enterprises saw substantial growth in the measure. However, compared to the declines in output per worker before 2019, both ownership sectors’ trends seem to have stabilized.

Notably, outside of a brief increase in 2014, private output per worker declined quickly from 2009 through 2019. This decline was much less severe in the local government sector, largely ending by 2015. Private and local government both recorded an increase in output per worker in 2020. Because local government typically represents close to 90 percent of revenues in water, sewage, and other systems, output per worker in the combined measure is much less sensitive to the decline in the private sector.

Chart 3 presents the detailed measures of output, employment, and output per worker by enterprise type. Local government output fell from 2009 through 2015, then climbed almost every year until 2023, except for a small dip in 2021. Output per worker remained only 5.2 percent lower in 2023 than it was in 2009. In the private sector, output per worker declined by 24.6 percent from 2009 to 2019 due to a combination of increased employment and lower output. Since then, the private sector output per worker trend has flattened out as output and employment have grown at roughly equal rates on average.

Notes

Last Modified Date: October 5, 2026