International Comparisons of Manufacturing Productivity and Unit Labor Cost Trends News Release


For release 10:00 a.m. (EST) Thursday, December 6, 2012             USDL-12-2365

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Media Contact:             (202) 691-5902    PressOffice@bls.gov

INTERNATIONAL COMPARISONS OF MANUFACTURING PRODUCTIVITY
 AND UNIT LABOR COST TRENDS, 2011

Manufacturing productivity increased in 2011 in 15 of 19 countries covered, 
the U.S. Bureau of Labor Statistics reported today. Labor productivity (output 
per hour) rose by more than 2 percent in the majority of countries (see chart 
1). These productivity increases were generally driven by gains in output 
coupled with modest changes in hours (see chart 2). 

The data presented for the United States differ from those in the BLS 
Productivity and Costs news release. (See technical notes.)  

PRINTED COPY CONTAINS CHART AT THIS POINT:
Chart 1. Percent changes in manufacturing output per hour, 2010-2011

PRINTED COPY CONTAINS CHART AT THIS POINT:
Chart 2. Percent changes in manufacturing output and hours, 2010-2011

-1-

In 2011, only the United Kingdom had larger productivity growth in 
manufacturing than in the previous year; in all other countries, productivity 
growth slowed down or declined. Only the Czech Republic and Singapore 
experienced productivity growth of 8 percent or higher in 2011, while in 2010 
the majority of countries experienced growth that exceeded 8 percent (see 
chart 3).

PRINTED COPY CONTAINS CHART AT THIS POINT:
Chart 3. Percent changes in manufacturing output per hour

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Analyze trends with interactive charts.
The Excel version of the data tables includes an interactive dashboard that 
displays charts from a custom selection of variables, countries, and time 
periods at www.bls.gov/ilc/#productivity.

Find additional data. 
The data tables with annual indexes back to 1950 used to prepare this report 
are available at www.bls.gov/ilc/#productivity. 

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-2-

Unit labor costs are the cost of labor input required to produce one unit of 
output and can be denominated either in national currency units or in U.S. 
dollars. Expressed in national currency units, manufacturing unit labor costs 
increased in 2011 in about half the countries covered; Japan and Australia 
recorded the largest increases (see chart 4).

To compare unit labor costs across countries, they are generally converted 
into a common currency, in this case U.S. dollars. Changes in a country's unit 
labor costs in U.S. dollars are roughly equivalent to the change in unit labor 
costs in national currency plus the change in the value of the country's 
currency relative to the U.S. dollar (see table 3). The values of the 
currencies of all countries compared appreciated relative to the U.S. dollar 
in 2011. As a result, unit labor costs in U.S. dollars showed larger increases 
than unit labor costs expressed in national currencies.

In 16 of the countries covered, unit labor costs on a U.S. dollar basis 
increased more than in the United States, causing the U.S. manufacturing labor 
cost competitiveness to increase relative to these countries. The United 
States improved its competiveness the most against Australia and Japan due to 
the large appreciation of their respective currencies against the U.S. dollar. 
However, U.S. labor cost competitiveness deteriorated relative to the Republic 
of Korea and the Czech Republic. 

PRINTED COPY CONTAINS CHART AT THIS POINT:
Chart 4. Percent changes in manufacturing unit labor costs, 2010-2011

-3-


Table 1. Output per hour, output, and hours
         Manufacturing, 19 countries, 1979-2011
         Average annual compound rates of change

Country               Indicator                1979-2011  1979-1990  1990-2000  2000-2007  2007-2011  2009-2010  2010-2011

United States         Output per hour             4.2        3.0        4.3        6.1        3.8       11.2        2.0
                          Output                  2.7        2.3        4.2        2.9       -0.3       11.2        4.3
                          Hours                  -1.4       -0.6       -0.1       -3.1       -3.9        0.0        2.2

Australia             Output per hour             1.7        2.1        1.8        2.3       -0.5        0.8       -4.0
                          Output                  1.2        1.6        1.5        1.5       -1.2        0.7       -2.1
                          Hours                  -0.5       -0.5       -0.4       -0.8       -0.7       -0.1        2.0

Belgium               Output per hour             2.8        4.2        2.8        2.2       -0.2        4.1        0.2
                          Output                  1.2        2.6        1.5        0.7       -2.2        4.8        3.3
                          Hours                  -1.5       -1.6       -1.2       -1.5       -2.0        0.7        3.1

Canada                Output per hour             2.2        2.1        3.6        1.0        0.8        3.7        1.9
                          Output                  1.4        1.9        4.2       -0.6       -2.8        5.2        2.4
                          Hours                  -0.7       -0.2        0.6       -1.6       -3.5        1.5        0.5

Czech Republic        Output per hour             NA         NA         NA         9.7        8.3       13.0       10.1
                          Output                  NA         NA         NA         9.4        5.4       13.8        9.8
                          Hours                   NA         NA         NA        -0.3       -2.7        0.8       -0.3

Denmark               Output per hour             2.4        2.4        2.4        2.9        1.5        8.7        2.3
                          Output                  0.8        1.4        2.0        0.5       -3.1        1.5        1.5
                          Hours                  -1.5       -0.9       -0.4       -2.4       -4.5       -6.6       -0.9

Finland               Output per hour             4.9        5.0        6.5        7.0       -2.9       11.2       -0.1
                          Output                  3.5        3.4        5.5        6.2       -5.8        9.1        2.0
                          Hours                  -1.3       -1.5       -0.9       -0.8       -3.0       -1.9        2.1

France                Output per hour             3.2        3.2        3.9        3.3        1.1        6.1        2.2
                          Output                  0.9        0.9        1.9        1.2       -1.8        3.6        1.2
                          Hours                  -2.2       -2.3       -1.9       -2.1       -2.9       -2.3       -1.0

Germany               Output per hour             2.5        2.1        3.4        4.2       -1.9        7.6        4.5
                          Output                  1.0        1.2        0.6        3.0       -2.4       11.3        8.1
                          Hours                  -1.5       -0.9       -2.6       -1.2       -0.5        3.5        3.5

Italy                 Output per hour             2.1        3.4        2.5        0.9        0.0        9.4       -0.4
                          Output                  1.0        2.6        1.3        0.8       -3.5        7.0        0.6
                          Hours                  -1.1       -0.8       -1.2       -0.1       -3.5       -2.1        1.0

Japan                 Output per hour             3.4        3.8        3.3        3.8        2.2       14.8       -2.8
                          Output                  2.3        4.7        0.8        2.6       -1.4       18.2       -3.6
                          Hours                  -1.1        0.9       -2.4       -1.1       -3.5        3.0       -0.8

Korea, Republic of    Output per hour             NA         NA        10.5        8.1        4.1        8.5        6.0
                          Output                  8.5       10.8        8.4        6.8        5.6       14.7        7.2
                          Hours                   NA         NA        -1.9       -1.1        1.5        5.7        1.1

Netherlands           Output per hour             3.1        3.2        3.4        3.8        1.1        8.3        4.0
                          Output                  2.1        2.4        2.7        2.0       -0.3        6.9        3.5
                          Hours                  -1.0       -0.8       -0.7       -1.7       -1.3       -1.3       -0.5

Norway                Output per hour             1.8        2.0        0.9        2.3        2.6        4.5        2.0
                          Output                  0.7       -0.6        1.2        2.3        0.1        2.2        1.9
                          Hours                  -1.1       -2.5        0.2       -0.1       -2.4       -2.2        0.0

Singapore             Output per hour             5.0        4.0        7.2        2.0        7.7       35.0        8.0
                          Output                  6.8        7.3        7.4        5.5        6.4       29.7        7.6
                          Hours                   1.8        3.2        0.2        3.5       -1.2       -3.9       -0.3

Spain                 Output per hour             2.8        3.3        2.0        2.9        3.0        6.1        5.1
                          Output                  1.4        2.1        2.8        1.1       -3.2        0.5        2.4
                          Hours                  -1.3       -1.2        0.8       -1.8       -6.0       -5.2       -2.5

Sweden                Output per hour             4.2        2.1        6.2        6.6        0.9       18.6        3.4
                          Output                  3.3        1.7        5.8        5.2       -1.3       19.8        6.1
                          Hours                  -0.8       -0.4       -0.4       -1.3       -2.2        1.0        2.6

Taiwan                Output per hour             6.1        6.3        5.0        7.6        5.7       13.9        2.8
                          Output                  6.5        7.5        5.0        7.2        6.2       25.4        4.9
                          Hours                   0.4        1.2       -0.1       -0.4        0.5       10.0        2.0

United Kingdom        Output per hour             3.4        3.5        3.0        4.5        2.2        4.4        4.5
                          Output                  0.4        0.9        0.9        0.1       -1.7        3.8        2.1
                          Hours                  -2.9       -2.5       -2.1       -4.3       -3.8       -0.6       -2.3

NOTE: Output is real value added in national currency units.
German data for years before 1991 pertain to the former West Germany.
NA=data not available.


Table 2. Unit labor costs, compensation, and output
         National currency basis, manufacturing, 19 countries, 1979-2011
         Average annual compound rates of change

Country               Indicator                1979-2011  1979-1990  1990-2000  2000-2007  2007-2011  2009-2010  2010-2011

United States         Unit labor costs            0.2        2.5       -0.4       -2.2       -0.7       -9.1        0.6
                          Compensation            2.9        4.9        3.8        0.6       -1.0        1.1        4.9
                          Output                  2.7        2.3        4.2        2.9       -0.3       11.2        4.3

Australia             Unit labor costs            NA         NA         1.6        2.8        2.4        0.0        3.1
                          Compensation            NA         NA         3.1        4.4        1.2        0.7        1.0
                          Output                  1.2        1.6        1.5        1.5       -1.2        0.7       -2.1

Belgium               Unit labor costs            1.1        1.8        0.2        1.0        2.0       -3.7       -1.0
                          Compensation            2.4        4.4        1.6        1.7       -0.2        0.9        2.3
                          Output                  1.2        2.6        1.5        0.7       -2.2        4.8        3.3

Canada                Unit labor costs            2.0        4.6       -0.3        2.7       -0.1       -5.8        0.3
                          Compensation            3.5        6.5        3.8        2.1       -2.8       -0.9        2.8
                          Output                  1.4        1.9        4.2       -0.6       -2.8        5.2        2.4

Czech Republic        Unit labor costs            NA         NA         NA        -1.8       -5.4       -8.8       -7.5
                          Compensation            NA         NA         NA         7.4       -0.3        3.8        1.5
                          Output                  NA         NA         NA         9.4        5.4       13.8        9.8

Denmark               Unit labor costs            2.6        5.5        0.5        2.1        1.1       -5.4        0.0
                          Compensation            3.5        7.0        2.5        2.5       -2.1       -4.0        1.4
                          Output                  0.8        1.4        2.0        0.5       -3.1        1.5        1.5

Finland               Unit labor costs            1.2        5.7       -2.2       -3.1        5.2       -9.6        2.7
                          Compensation            4.7        9.4        3.3        2.9       -0.9       -1.3        4.7
                          Output                  3.5        3.4        5.5        6.2       -5.8        9.1        2.0

France                Unit labor costs            2.1        5.8       -0.2        0.1        1.7       -3.9        0.3
                          Compensation            3.0        6.7        1.7        1.3       -0.1       -0.5        1.4
                          Output                  0.9        0.9        1.9        1.2       -1.8        3.6        1.2

Germany               Unit labor costs            1.6        3.3        1.4       -2.2        3.8       -8.6       -2.2
                          Compensation            2.5        4.6        2.0        0.7        1.4        1.8        5.8
                          Output                  1.0        1.2        0.6        3.0       -2.4       11.3        8.1

Italy                 Unit labor costs            4.4        8.8        1.9        2.1        3.1       -6.3        2.5
                          Compensation            5.5       11.6        3.2        3.0       -0.6        0.3        3.2
                          Output                  1.0        2.6        1.3        0.8       -3.5        7.0        0.6

Japan                 Unit labor costs           -1.1        0.7       -0.9       -4.4       -1.0      -13.9        5.1
                          Compensation            1.1        5.5       -0.1       -1.8       -2.3        1.8        1.3
                          Output                  2.3        4.7        0.8        2.6       -1.4       18.2       -3.6

Korea, Republic of    Unit labor costs            3.7        7.9        2.6        1.6       -0.7       -0.6       -6.1
                          Compensation           12.6       19.5       11.3        8.5        4.9       14.0        0.6
                          Output                  8.5       10.8        8.4        6.8        5.6       14.7        7.2

Netherlands           Unit labor costs            0.5        0.8        0.3       -0.1        1.3       -6.9       -1.9
                          Compensation            2.6        3.2        3.0        1.9        1.0       -0.5        1.6
                          Output                  2.1        2.4        2.7        2.0       -0.3        6.9        3.5

Norway                Unit labor costs            4.0        6.7        3.4        2.3        1.3       -1.9        1.8
                          Compensation            4.7        6.1        4.5        4.7        1.5        0.3        3.8
                          Output                  0.7       -0.6        1.2        2.3        0.1        2.2        1.9

Singapore             Unit labor costs            0.2        3.7       -1.5       -1.1       -3.0      -18.3       -2.6
                          Compensation            7.0       11.3        5.8        4.4        3.2        6.0        4.8
                          Output                  6.8        7.3        7.4        5.5        6.4       29.7        7.6

Spain                 Unit labor costs            3.9        7.8        2.7        2.4       -0.5       -5.0       -3.6
                          Compensation            5.4       10.1        5.5        3.5       -3.7       -4.5       -1.2
                          Output                  1.4        2.1        2.8        1.1       -3.2        0.5        2.4

Sweden                Unit labor costs            1.1        6.6       -2.1       -2.3        1.0      -17.5       -0.5
                          Compensation            4.5        8.4        3.6        2.8       -0.3       -1.2        5.5
                          Output                  3.3        1.7        5.8        5.2       -1.3       19.8        6.1

Taiwan                Unit labor costs            0.5        5.5        0.2       -3.8       -4.0       -9.4        1.8
                          Compensation            7.1       13.5        5.2        3.1        1.9       13.6        6.8
                          Output                  6.5        7.5        5.0        7.2        6.2       25.4        4.9

United Kingdom        Unit labor costs            2.7        6.1        1.3        0.6        1.1        0.7       -2.3
                          Compensation            3.1        7.0        2.2        0.6       -0.6        4.5       -0.2
                          Output                  0.4        0.9        0.9        0.1       -1.7        3.8        2.1

NOTE: German data for years before 1991 pertain to the former West Germany.
NA=data not available.


Table 3. Unit labor costs (ULC) in U.S. dollars and in national currency
         Manufacturing, 19 countries, 1979-2011
         Average annual compound rates of change

Country               Indicator                1979-2011  1979-1990  1990-2000  2000-2007  2007-2011  2009-2010  2010-2011

United States         ULC in U.S. dollars         0.2        2.5       -0.4       -2.2       -0.7       -9.1        0.6
                          ULC in nat. cur.        0.2        2.5       -0.4       -2.2       -0.7       -9.1        0.6
                          Exchange rates          --         --         --         --         --         --         --

Australia             ULC in U.S. dollars         NA         NA        -1.3        8.4        7.9       16.1       15.8
                          ULC in nat. cur.        NA         NA         1.6        2.8        2.4        0.0        3.1
                          Exchange rates         -0.2       -3.2       -2.9        5.4        5.3       16.1       12.3

Belgium               ULC in U.S. dollars         1.2        0.6       -2.5        6.9        2.5       -8.4        4.0
                          ULC in nat. cur.        1.1        1.8        0.2        1.0        2.0       -3.7       -1.0
                          Exchange rates          0.0       -1.2       -2.6        5.8        0.4       -4.8        5.1

Canada                ULC in U.S. dollars         2.6        4.6       -2.7        7.6        2.0        4.4        4.5
                          ULC in nat. cur.        2.0        4.6       -0.3        2.7       -0.1       -5.8        0.3
                          Exchange rates          0.5        0.0       -2.4        4.8        2.1       10.8        4.2

Czech Republic        ULC in U.S. dollars         NA         NA         NA         7.5       -1.8       -9.0       -0.2
                          ULC in nat. cur.        NA         NA         NA        -1.8       -5.4       -8.8       -7.5
                          Exchange rates          NA         NA         NA         9.4        3.8       -0.2        7.9

Denmark               ULC in U.S. dollars         2.6        4.0       -2.1        8.0        1.5      -10.0        5.1
                          ULC in nat. cur.        2.6        5.5        0.5        2.1        1.1       -5.4        0.0
                          Exchange rates         -0.1       -1.5       -2.6        5.8        0.4       -4.8        5.1

Finland               ULC in U.S. dollars         0.9        5.9       -7.1        2.6        5.6      -13.9        7.9
                          ULC in nat. cur.        1.2        5.7       -2.2       -3.1        5.2       -9.6        2.7
                          Exchange rates         -0.3        0.2       -5.1        5.8        0.4       -4.8        5.1

France                ULC in U.S. dollars         1.8        3.4       -2.9        5.9        2.1       -8.6        5.3
                          ULC in nat. cur.        2.1        5.8       -0.2        0.1        1.7       -3.9        0.3
                          Exchange rates         -0.3       -2.2       -2.6        5.8        0.4       -4.8        5.1

Germany               ULC in U.S. dollars         2.4        4.5       -1.4        3.5        4.2      -13.0        2.8
                          ULC in nat. cur.        1.6        3.3        1.4       -2.2        3.8       -8.6       -2.2
                          Exchange rates          0.8        1.1       -2.7        5.8        0.4       -4.8        5.1

Italy                 ULC in U.S. dollars         2.7        5.2       -3.7        8.1        3.5      -10.8        7.7
                          ULC in nat. cur.        4.4        8.8        1.9        2.1        3.1       -6.3        2.5
                          Exchange rates         -1.6       -3.3       -5.4        5.8        0.4       -4.8        5.1

Japan                 ULC in U.S. dollars         2.0        4.6        2.1       -5.6        9.2       -8.1       15.7
                          ULC in nat. cur.       -1.1        0.7       -0.9       -4.4       -1.0      -13.9        5.1
                          Exchange rates          3.2        3.8        3.0       -1.3       10.3        6.7       10.1

Korea, Republic of    ULC in U.S. dollars         1.1        4.1       -2.0        4.5       -5.0        9.6       -2.0
                          ULC in nat. cur.        3.7        7.9        2.6        1.6       -0.7       -0.6       -6.1
                          Exchange rates         -2.6       -3.4       -4.5        2.8       -4.3       10.3        4.4

Netherlands           ULC in U.S. dollars         1.3        1.7       -2.4        5.7        1.7      -11.4        3.1
                          ULC in nat. cur.        0.5        0.8        0.3       -0.1        1.3       -6.9       -1.9
                          Exchange rates          0.7        0.9       -2.7        5.8        0.4       -4.8        5.1

Norway                ULC in U.S. dollars         3.7        4.7       -0.1        8.5        2.5        2.1        9.9
                          ULC in nat. cur.        4.0        6.7        3.4        2.3        1.3       -1.9        1.8
                          Exchange rates         -0.3       -1.9       -3.4        6.0        1.1        4.1        7.9

Singapore             ULC in U.S. dollars         1.9        5.5       -1.0        0.8        1.5      -12.8        5.7
                          ULC in nat. cur.        0.2        3.7       -1.5       -1.1       -3.0      -18.3       -2.6
                          Exchange rates          1.7        1.7        0.5        2.0        4.6        6.7        8.5

Spain                 ULC in U.S. dollars         2.1        3.8       -3.0        8.3       -0.1       -9.6        1.3
                          ULC in nat. cur.        3.9        7.8        2.7        2.4       -0.5       -5.0       -3.6
                          Exchange rates         -1.8       -3.7       -5.5        5.8        0.4       -4.8        5.1

Sweden                ULC in U.S. dollars        -0.2        3.5       -6.3        2.1        2.0      -12.4       10.5
                          ULC in nat. cur.        1.1        6.6       -2.1       -2.3        1.0      -17.5       -0.5
                          Exchange rates         -1.3       -2.9       -4.3        4.5        1.0        6.2       11.1

Taiwan                ULC in U.S. dollars         1.2        8.3       -1.3       -4.5       -1.3       -5.0        9.2
                          ULC in nat. cur.        0.5        5.5        0.2       -3.8       -4.0       -9.4        1.8
                          Exchange rates          0.6        2.7       -1.5       -0.7        2.8        4.8        7.2

United Kingdom        ULC in U.S. dollars         1.8        4.4       -0.4        4.6       -4.3       -0.7        1.4
                          ULC in nat. cur.        2.7        6.1        1.3        0.6        1.1        0.7       -2.3
                          Exchange rates         -0.9       -1.6       -1.6        4.1       -5.4       -1.3        3.8

NOTE: Exchange rates are value of foreign currency relative to the U.S. dollar.
German data for years before 1991 pertain to the former West Germany.
NA=data not available.



TECHNICAL NOTES 

The comparisons in this release are based on data available to the Bureau of Labor 
Statistics as of September 1 from national statistical offices of the countries compared. 
Below is a summary of the concepts used in this release. For more information on the 
methodology used in this release, see the detailed technical notes at 
www.bls.gov/ilc/#productivity. 

Labor productivity is defined as real output in national currency per hour worked. Unit 
labor costs are defined as the cost of labor input required to produce one unit of output, 
and are computed as compensation in nominal terms divided by real output. 

BLS constructs the trends in this release from three basic measures: output, total labor 
hours, and total compensation. In general, the output measures are real value added and 
total labor hours refer to hours worked by all employed persons. Total compensation 
includes employer expenditures for direct pay, employer social insurance expenditures, and 
labor-related taxes and subsidies. 

In general, the measures relate to total manufacturing as defined by the International 
Standard Industrial Classification (ISIC). Data for the United States and Canada are in 
accordance with the North American Industry Classification System (NAICS), except for 
compensation data for the United States before 1987. For most countries, the measures are 
prepared according to the United Nations System of National Accounts 1993 (SNA 93) for the 
most recent years. For earlier years, data were compiled according to other systems of 
national accounts. 

The U.S. manufacturing output series used in this release differs from the manufacturing 
output series that BLS publishes as part of its major sector productivity and costs 
measures for the United States.(1)  The International Labor Comparisons program uses a value 
added output concept, while the major sector series is on a sectoral output basis, which 
is gross output less intra-sector sales and transfers. Even though BLS has determined that 
sectoral output is the correct concept for U.S. measures of productivity, there are other 
considerations that make value added the better concept for international comparisons of 
labor productivity, such as differences among countries in the extent of vertical 
integration of industries and the availability of value added data. 
       	
The BLS measures are limited to trend comparisons. BLS does not prepare level comparisons 
of manufacturing productivity because of data limitations and technical problems in 
comparing the levels of manufacturing output among countries.

For more information on the methodology used in this release, see the detailed technical 
notes at www.bls.gov/ilc/#productivity.

1.  For more information about sectoral output, see www.bls.gov/lpc/.

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Last Modified Date: December 06, 2012