Important Information Regarding Industry Labor Productivity and Cost Measures

The industry labor productivity indexes show changes over time in the relationship between the output of an industry and the labor hours expended on that output.  Measures of output per hour (labor productivity) are useful for studying changes in labor utilization, projecting future employment requirements, analyzing trends in labor costs, examining the effects of technological improvements on employment and unemployment, analyzing related economic and industrial activities, and comparing productivity progress among countries.  Although the labor productivity measures relate output to one input—labor time—they do not measure the specific contribution of labor, capital, or any other factor of production. Rather, they reflect the joint effect of a number of interrelated influences such as changes in technology, capital investment per worker, utilization of capacity, layout and flow of material, skill and effort of the work force, managerial skill, and labor-management relations.

Coverage

The data presented in the Industry Labor Productivity and Costs Data Tables are from a database of industry labor productivity and related data produced by the Bureau of Labor Statistics, U.S. Department of Labor.   Measures for most industries in the database start in 1987. All indexes are updated annually and continue through the most recent year for which data are available. Data are available for U.S. industries as defined in the North American Industry Classification System (NAICS). Industry productivity and costs data also are available on a Standard Industrial Classification (SIC) basis, but these data series are no longer updated.

Labor productivity and related measures are available on this web site for detailed NAICS industries, with extensive coverage in mining, utilities, manufacturing, wholesale trade, retail trade, and accommodation and food services.  Measures also are provided for selected industries in transportation and warehousing, information, finance and insurance, real estate and rental and leasing, professional and technical services, administrative and support services, health care and social services, and other services.  Also included are productivity and related series for the mining, wholesale trade, retail trade, and accomodation and food services sectors as a whole. 

Industry indexes are available for output per hour (labor productivity), output per person, output, hours, employment, unit labor costs and labor compensation.  These indexes are presented with a base year of 2002=100. The number of employees, annual hours, net value of production and the implicit price deflator for output also are available upon request from the Office of Productivity and Technology, Division of Industry Productivity Studies by phone (202-691-5618) or by email.

Methods

The labor productivity measures are computed by dividing an index of output by an index of hours.  A Tornqvist index of output is developed for each industry by computing a weighted average of the growth rates of the various industry products between two periods, with weights based on the products' shares in industry value of production. The weight for each product equals its average value share in the two periods. Therefore, the weights are allowed to change through time rather than being fixed. For a more complete discussion of the Tornqvist methodology see "Industry Productivity Measures," Chapter 11 of the BLS Handbook of Methods. An index of hours is computed for an industry by dividing a measure of total labor hours in the industry in each year by the hours for the base year. Hours are calculated for each industry by multiplying annual employment by average weekly hours by 52 weeks for each category of worker. Hours for different categories of workers are then summed. Measures of unit labor costs and total labor compensation are also available. Industry unit labor cost indexes are calculated as the ratio of labor compensation to real output. The labor compensation measures are based on data of gross payroll plus supplemental benefits.

Last Modified Date: September 2, 2011