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March 1984, Vol. 107, No. 3
Productivity growth in the
switchgear industry slows after 1973
Productivity, as measured by output per employee hour, in the switchgear industry grew at an average rate of 2.0 percent per year between 1963 and 1982.1 This gain is below the corresponding 2.4-percent rate for all manufacturing. Productivity growth was aided by the introduction of new design and manufacturing technology, but moderated by the impact of cyclical downturns in output and an overall falloff in demand for the industry's product beginning in 1973.
This industry manufactures such products as high capacity switching units and circuit breakers. These are utilized by electric utilities as part of their transmission systems and by industry as components of control systems for much of the manufacturing equipment being used. In addition, switchgear, generally in the form of low-voltage circuit breakers and panelboards, is used in the construction of new buildings. There also is a replacement market for switchgear, mainly from electric utilities and industry, and to a lesser extent, from building renovation.
Demand for switchgear is closely tied to changes in power usage, particularly increases in demand for electric power, which in turn lead to expansion of the power generating and transmission network. New building construction requires additional switchgear. New subdivisions are particularly important sources of demand for switchgear, because they require new switchgear installed by electric power utilities as well as the equipment installed in individual new homes. Demand is also tied to growth in the installation of new capital equipment, because switchgear is installed along with most new manufacturing, mining, and other fixed equipment.
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1 Average annual rates of change are based on the linear least squares trends of the logarithms of the index numbers. The switchgear industry is designated as industry 3613 in the Standard Industrial Classification Manual, 1972, issued by the U.S. Office of Management and Budget. The industry is made up of establishments primarily engaged in manufacturing switchgear and switchboard apparatus. A technical note describing the indexes is available from the Office of Productivity and Technology, Bureau of Labor Statistics, Washington, D.C. 20212. The indexes for this industry will be updated and included in the Bureau of Labor Statistics annual bulletin, Productivity Measures for Selected Industries.
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