A dip in manufacturing multifactor productivity

February 11, 2004

Multifactor productivity—measured as output per unit of combined inputs—fell by 0.8 percent in manufacturing in 2001. The decline was the first in 10 years.

Annual percent change in multifactor productivity in manufacturing, 1991-2001
[Chart data—TXT]

The decline in multifactor productivity was the result of a 4.5-percent decline in manufacturing output and a 3.7-percent decrease in combined inputs. Capital services posted a 1.5-percent advance in 2001. In contrast, hours fell 5.6 percent.

On average, multifactor productivity in manufacturing grew 1.2 percent annually from 1949 (when the series started) to 2001. Output increased at a 3.1-percent annual rate, and combined inputs rose 1.9 percent per year.

Multifactor productivity is designed to measure the joint influences on economic growth of technological change, efficiency improvements, returns to scale, reallocation of resources, and other factors. Multifactor productivity, therefore, differs from the labor productivity (output per hour) measures that are published quarterly by BLS since it requires information on capital services and other data that are not available on a quarterly basis.

These data are a product of the BLS Multifactor Productivity program. Additional information is available in "Multifactor Productivity Trends in Manufacturing, 2001" (PDF) (TXT), news release USDL 04-148. This is the last release of manufacturing multifactor productivity measures based on the Standard Industrial Classification (SIC) system. SIC-based productivity and related series through 2001 will remain available but will no longer be updated. In the future, historical and new measures will be based on the North American Industry Classification System (NAICS).


Bureau of Labor Statistics, U.S. Department of Labor, The Economics Daily, A dip in manufacturing multifactor productivity on the Internet at http://www.bls.gov/opub/ted/2004/feb/wk2/art03.htm (visited September 25, 2016).


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