Historical, technical USDL 99-119 information: (202) 606-5618 FOR RELEASE: 10:00 a.m. EDT Media contact: (202) 606-5902 Tuesday, May 4, 1999 Internet: http://stats.bls.gov/iprhome.htm PRODUCTIVITY BY INDUSTRY: SERVICE SECTOR AND MINING, 1997 The Bureau of Labor Statistics of the U.S. Department of Labor reported today on labor productivity changes in 1997 for selected industries in the service and the mining sectors of the U.S. economy. Labor productivity--defined as output per hour--rose in 1997 for most of the industries measured by BLS in these sectors. In 1997, output per hour increased in 74 percent of the service and mining industries, as measured at the 3-digit level of the Standard Industrial Classification (SIC) Manual. Output, which is the production of goods and services, rose in 81 percent of the industries at the 3- digit level, while hours of labor rose in 72 percent of the industries. The attached table presents data for industries in the service sector and in mining for which BLS publishes productivity series at the 2-, 3-, and 4-digit levels. In general, the analysis that follows will focus on industries at the 2- and 3-digit levels of aggregation. Productivity data for detailed industries in the manufacturing sector for 1997 are not yet available. (See section on "Manufacturing data," page 2.) Transportation, communications, and utilities Productivity gains were recorded in the three transportation industries for which 1997 data are available: Productivity advanced by 3.4 percent in the U. S. postal service; by 1.1 percent in trucking, except local; and by 0.9 percent in air transportation. Among communications industries, increases in output per hour were registered in cable and other pay TV services (3.0 percent) and in telephone communications (0.5 percent). In contrast, productivity fell by 4.3 percent in radio and television broadcasting. Both of the utilities industries measured by BLS posted gains in productivity in 1997; output per hour climbed by 3.4 percent in gas utilities and by 2.7 percent in electric utilities. -2- Wholesale trade Currently, BLS measures labor productivity for one industry in the wholesale trade sector: scrap and waste materials. That industry experienced a strong rise in productivity of 6.0 percent in 1997. Retail trade Of the 29 published 3-digit industries in retail trade, 20 recorded productivity increases in 1997. The increases ranged from 0.1 percent in paint, glass, and wallpaper stores to 13.2 percent in household appliance stores. Among the nine industries with productivity decreases, the changes ranged from a 0.6 percent reduction in output per hour in gasoline service stations to a 12.7 percent drop in output per hour in retail nurseries, lawn and garden supply stores. The 3-digit SIC industries in retail trade with the highest levels of employment are eating and drinking places, grocery stores, and department stores. In 1997, output per hour fell by 1.6 percent in eating and drinking places and by 1.2 percent in grocery stores. Productivity advanced by 3.9 percent in department stores. Finance and services Gains in output per hour were posted in 1997 in seven of the nine 3-digit SIC industries in finance and services for which BLS publishes data. In the largest industry published in this sector, hotels and motels, productivity dropped by 1.7 percent in 1997. In the next largest industry in terms of employment, commercial banks, output per hour grew by 2.4 percent. Mining Productivity increased in every measured mining industry except one in 1997. The biggest increase--14.2 percent--occurred in gold and silver ores. The sole decline in output per hour was recorded in oil and gas extraction, which experienced a drop of 4.3 percent. Manufacturing data Productivity data for detailed manufacturing industries are not available for 1997. This is because needed source data from the 1997 Census of Manufactures are not yet available from the Bureau of the Census. Data on productivity through 1996 for all 3- and 4-digit SIC industries in manufacturing are presently available from BLS. -3- ------------------------------------------------------------ Incorporation of improved consumer price indexes Output and productivity indexes for all retail trade and services industries have been revised from 1992 forward to reflect the incorporation of consumer price indexes using the geometric mean formula. Beginning with data for January 1999, the Bureau of Labor Statistics began using the geometric mean formula at the lower level of aggregation for most of its detailed consumer price indexes. Previously, the arithmetic mean formula was used at the lower level. Utilizing the geometric mean formula accounts in part for the substitutions that consumers make among similar items when the items' relative prices change. See the Consumer Price Index web site at http://stats.bls.gov/cpihome.htm for more information on the use of the geometric mean formula. Experimental consumer price indexes using the geometric mean formula have been incorporated into output and productivity indexes for all retail trade and services industries measured by BLS for the period 1992 to 1997. As indicated above, the CPI program has begun using the geometric mean formula at the lower level of aggregation for most of its detailed consumer price indexes--some CPIs still utilize the arithmetic mean formula at the lower level of aggregation. In each case where the CPI program is not adopting the geometric mean formula, the industry productivity program is following suit. An example of a CPI that is not using the geometric mean formula is the CPI for cable television. Thus, the productivity measure for cable and other pay television services will continue to use an arithmetic mean CPI. Consumer price indexes using the geometric mean formula at the lower level of aggregation generally increase more slowly than those using the arithmetic mean formula. This means that a switch to geometric mean CPIs usually leads to higher measured growth rates of output and productivity. Average annual growth rates of output and productivity for periods beginning in 1992 generally have been revised upward for most retail trade and services industries due to the use of geometric mean CPIs, with the typical revision being less than 1.0 percentage point. These revisions should be kept in mind when comparing productivity data for years before and after 1992; for example, it is likely that, if the geometric mean CPIs were available back to 1987, growth rates of output per hour would also be revised upward for 1987-92 for many industries. Further information on the magnitude of the revisions can be obtained from the Industry Productivity web site at http://stats.bls.gov/iprrev.htm or by phoning the Division of Industry Productivity Studies (202-606-5618). ------------------------------------------------------------ -4- Technical note Coverage In the service-producing sector, the BLS industry productivity series cover 100 percent of employment in retail trade, 90 percent in communications and utilities, 57 percent in transportation, 17 percent in finance and services, and 2 percent in wholesale trade. In the goods- producing sector, the BLS industry productivity series cover 100 percent of employment in manufacturing and 96 percent in mining; the construction sector is not covered. In the sectors with low coverage, a lack of adequate basic data and, in some cases, serious conceptual issues have prevented development of productivity measures. (The coverage percentages noted here relate to unpublished as well as published series. For information on series that do not meet BLS publication standards, see discussion on page 5.) Revisions The data in this news release reflect revisions to series as published in table 42 of the Monthly Labor Review and in the article, "BLS Completes Major Expansion of Industry Productivity Series," by John Duke and Lisa Usher, Monthly Labor Review, September 1998, pp. 35-51. Indexes of productivity by industry have been revised for the years 1993 to 1996 for most service-sector industries. These revisions are due to the incorporation of improved price indexes, described in the box on page 3, and to revised annual receipts data from the Census Bureau. Productivity indexes for mining industries also have been revised. The revised series can be obtained in several ways: by visiting the Industry Productivity web site (http://stats.bls.gov/iprhome.htm); by calling the Division of Industry Productivity Studies (202-606-5618); or by sending a request by e-mail (dipsweb@bls.gov). All of the measures for 1997 in this news release are preliminary and subject to revision. Productivity measurement The productivity measures in this release describe the relationship between output and the labor time involved in its production. They show the changes from period to period in the amount of goods and services produced per hour. Although these measures relate output to hours of employees or all persons engaged in an industry, they do not measure the specific contribution of labor, capital, or any other factor of production. Rather, they reflect the joint effects of many influences, including changes in technology; capital investment; level of output; utilization of capacity, energy, and materials; the organization of production; managerial skill; and the characteristics and effort of the workforce. Published productivity data for 499 industries in the goods-producing and service-producing sectors are available on the Internet at http://stats.bls.gov/iprhome.htm. Productivity series for an additional 228 industries have been withheld from publication because they do not meet BLS publication standards. Unpublished data can be requested by phoning 202-606-5618 or by sending e-mail to dipsweb@bls.gov. -5- The reader should note that, occasionally, the year-to- year movements in productivity measures may be somewhat erratic, particularly in the smaller industries. The annual changes in an industry's productivity are based on sample data, which are likely to differ from data generated by a census of establishments in the industry. As a result, long- term trends tend to be more reliable indicators of the performance of an industry than are the year-to-year changes. Information in this release will be made available to sensory impaired individuals upon request. Voice phone: 202- 606-7828, TDD phone: 202-606-5897, TDD message referral phone number: 1-800-326-2577. Table 1. Annual percent change in output per hour, output, and employee hours for selected industries Annual percent change 1997 1987-97 1996-97 1996-97 1996-97 Employment (1) Output Output SIC Code Industry (thousands) per hour (2) per hour (2) Output Hours (3) Mining 102 Copper ores 16 1.7 2.0 1.0 -1.0 104 Gold and silver ores 19 4.7 14.2 11.1 -2.8 1041 Gold ores 17 3.8 13.5 9.1 -3.8 12 Coal mining 96 5.9 6.2 3.0 -3.0 122 Bituminous coal and lignite mining 90 5.9 5.2 3.1 -2.1 13 Oil and gas extraction 335 0.4 -4.3 0.1 4.6 131 Crude petroleum and natural gas 143 2.3 1.9 0.1 -1.8 14 Nonmetallic minerals, except fuels 108 0.8 4.2 5.8 1.5 142 Crushed and broken stone 41 1.4 7.1 10.5 3.2 Transportation 4011 Railroad transportation 202 (4) 5.9 NA NA NA 4213 Trucking, except local 844 2.8 1.1 3.4 2.3 43 United states postal service (5) 858 0.8 3.4 3.7 0.3 4512,13,22(pts) Air transportation 647 1.1 0.9 5.2 4.3 Communications and utilities 481 Telephone communications 975 4.8 0.5 6.5 6.0 483 Radio and television broadcasting 243 0.1 -4.3 -2.7 1.7 4832 Radio broadcasting stations 115 3.2 1.2 3.9 2.8 4833 Television broadcasting stations 128 -1.4 -5.8 -4.9 1.0 484 Cable and other pay TV services 175 -1.7 3.0 4.9 1.8 491,2,3 Gas and electric utilities 671 3.6 3.1 -0.2 -3.2 491,3(pt) Electric utilities 511 4.2 2.7 1.3 -1.3 492,3(pt) Gas utilities 160 1.8 3.4 -5.6 -8.7 Wholesale and retail trade 5093 Scrap and waste materials 156 1.5 6.0 4.0 -1.9 521 Lumber and other building materials dealers 577 2.2 2.0 7.4 5.3 523 Paint, glass, and wallpaper stores 72 2.8 0.1 1.1 1.0 525 Hardware stores 178 1.5 0.6 -0.4 -0.9 526 Retail nurseries, lawn and garden supply stores 106 1.8 -12.7 -6.6 6.9 531 Department stores 2,389 2.3 3.9 6.5 2.5 533 Variety stores 141 9.4 5.8 8.2 2.3 539 Miscellaneous general merchandise stores 203 5.2 0.4 0.7 0.3 54 Food stores 3,661 -1.1 -1.1 0.0 1.1 541 Grocery stores 3,177 -1.2 -1.2 -0.6 0.7 542 Meat and fish (seafood) markets 57 -1.0 2.2 -0.8 -2.9 546 Retail bakeries 232 -0.2 11.8 22.6 9.7 551 New and used car dealers 1,051 0.7 -0.8 1.5 2.2 553 Auto and home supply stores 418 0.9 -3.7 -1.0 2.9 554 Gasoline service stations 700 1.5 -0.6 0.2 0.8 56 Apparel and accessory stores 1,152 3.4 2.1 2.4 0.3 561 Men's and boy's wear stores 84 3.4 10.1 8.8 -1.2 562 Women's clothing stores 296 3.0 0.4 -3.7 -4.1 565 Family clothing stores 356 3.7 2.0 4.3 2.3 566 Shoe stores 204 3.7 0.6 2.2 1.6 569 Miscellaneous apparel and accessory stores 108 2.5 -8.5 -2.0 7.1 57 Furniture, home furnishings, and equipment stores 1,131 4.9 4.6 9.7 4.9 571 Furniture and homefurnishings stores 590 2.3 2.6 8.8 6.0 5712 Furniture stores 330 2.5 6.1 10.3 3.9 5713 Floor covering stores 104 0.2 0.5 5.7 5.2 5719 Miscellaneous home furnishings stores 142 3.2 -5.2 6.8 12.7 572 Household appliance stores 83 4.1 13.2 7.3 -5.2 573 Radio, television, computer, and music stores 459 8.2 5.3 11.0 5.5 5731 Radio, television, and electronic stores 202 6.2 -4.5 2.0 6.7 5734 Computer and computer software stores 136 22.1 18.5 37.1 15.7 5735 Record and prerecorded tape stores 86 3.3 16.0 1.8 -12.2 58 Eating and drinking places 7,889 -0.6 -1.6 0.7 2.2 5812 Eating places 7,491 -0.6 -1.5 0.7 2.2 5813 Drinking places 398 -1.5 -3.0 -0.2 2.9 591 Drug and proprietary stores 635 1.3 5.8 7.0 1.1 592 Liquor stores 142 0.8 -2.2 3.4 5.8 593 Used merchandise stores 187 2.0 0.4 6.6 6.2 594 Miscellaneous shopping goods stores 1,160 2.2 4.2 4.8 0.5 5941 Sporting goods stores and bicycle shops 222 3.7 7.6 5.1 -2.4 5942 Book stores 142 1.4 -5.4 1.5 7.3 5943 Stationery stores 93 -1.0 7.2 15.8 8.0 5944 Jewelry stores 170 4.0 7.4 5.8 -1.5 5945 Hobby, toy, and game shops 147 2.9 8.3 2.0 -5.8 5947 Gift, novelty, and souvenir shops 265 -1.2 1.3 3.1 1.8 5949 Sewing, needlework, and piece goods stores 57 2.8 5.5 7.8 2.2 596 Nonstore retailers 566 4.0 7.0 8.9 1.8 5961 Catalog and mail-order houses 234 2.5 8.5 12.0 3.3 5962 Merchandising machine operators 81 -1.1 -8.1 -9.2 -1.1 598 Fuel dealers 103 0.6 -6.0 -7.7 -1.9 5983 Fuel oil dealers 53 0.7 -6.1 -8.1 -2.1 599 Retail stores, n.e.c. 670 3.3 5.5 8.7 3.1 5992 Florists 167 2.0 14.2 13.4 -0.7 Finance and services 602 Commercial banks 1,460 3.0 2.4 2.5 0.1 701 Hotels and motels 1,728 0.8 -1.7 0.5 2.2 721 Laundry, cleaning, and garment services 534 0.8 -0.6 3.8 4.4 7213 Linen supply 70 -1.6 1.7 5.7 3.9 7215 Coin-operated laundries and drycleaning 61 2.7 -3.0 4.6 7.8 7216 Drycleaning plants, except rug cleaning 194 -1.8 -3.9 0.6 4.7 7217 Carpet and upholstery cleaning 53 2.4 -1.5 6.2 7.9 7218 Industrial launderers 55 0.2 -1.3 2.3 3.7 722 Photographic studios, portrait 86 3.1 7.1 2.1 -4.7 723 Beauty shops 713 0.9 2.5 4.3 1.8 724 Barber shops 51 4.4 20.2 6.4 -11.5 726 Funeral services and crematories 104 0.1 4.3 0.7 -3.5 753 Automotive repair shops 903 1.5 1.4 2.7 1.2 783 Motion picture theaters 132 0.1 0.4 4.7 4.3 n.a. = not available. (1) Employment figures are based primarily on data from the BLS Current Employment Statistics (CES) program and the Current Population Survey (CPS). Other sources are: the Association of American Railroads, the Department of Transportation, and the U.S. Postal Service. (2) Output per employee hour is measured in mining, transportation, communications, and in SICs 5093, 531, 551, 602, and 783. Output per employee is used for SIC 4213 and SIC 4512,13,22 (pts). Output per hour of all persons is used for all trade and services industries except SICs 531, 551, and 783. All persons includes self-employed and unpaid family workers as well as employees. (3) Employee hours are measured in mining, transportation, communications, and in SICs 5093, 531, 551, 602, and 783. Employment is used instead of hours for SIC 4213 and SIC 4512,13,22(pts) due to a lack of hours data. Hours of all persons is used for all trade and service industries except SICs 531, 551, and 783. All persons includes self-employed and unpaid family workers as well as employees. (4) 1987 to 1996. (5) Employee hours in SIC 43 are based on the number of full-time equivalent (FTE) employee years, as reported in the U.S. Postal Service budget. FTE employee years are computed by dividing total hours of full-time, part-time, and intermittent workers by the number of hours in a standard work year. The output and hours for SIC 43 reflect the Federal fiscal year.