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Economic News Release
LPC LPC Program Links

Productivity and Costs by Industry: Manufacturing and Mining Industries -- 2019

For release 10:00 a.m. (EDT) Thursday, June 25, 2020                                                  USDL-20-1276

Technical information:  (202) 691-5606 
Media contact:          (202) 691-5902

                                  PRODUCTIVITY AND COSTS BY INDUSTRY:
                               MANUFACTURING AND MINING INDUSTRIES, 2019

Labor productivity declines were widespread among manufacturing industries in 2019, with decreases 
in 54 of the 86 four-digit NAICS industries. Of the 51 industries in durable manufacturing, 31 had 
productivity decreases in 2019 led by a 7.8 percent decline in the productivity of the HVAC and 
commercial refrigeration equipment industry. Nondurable manufacturing also had widespread declines in 
2019 with productivity falling in 23 of 35 industries, led by a 13.1-percent decline in the other leather 
products industry. All four industries in the mining sector posted productivity declines in 2019 led by the 
coal mining industry with a decrease of 6.6 percent.

Labor Productivity Trends in NAICS 3-Digit Industries, 2019

      * Labor productivity decreased in 18 of the 21 NAICS 3-digit manufacturing industries in 2019, 
        as output declined in 17 industries and hours worked rose in 10.
      * The food industry had the largest productivity gain, 0.6 percent, as output increased and hours 
      * The leather and allied products industry had the largest productivity decline, 9.8 percent, as 
        output fell and hours worked increased, each by 5.1 percent.
      * Labor productivity declined 2.3 percent in the oil and gas extraction industry where an 
        increase in hours worked outpaced growth in output.
      * The mining, except oil and gas industry had a productivity decline of 3.8 percent, as hours 
        worked increased while output declined.  

Trends in Unit Labor Costs in 2019

Unit labor costs, which reflect the total labor costs required to produce a unit of output, rose in 77 of the 
86 NAICS 4-digit manufacturing industries. Of the 51 industries in durable manufacturing, 45 
experienced rising unit labor costs, led by the railroad rolling stock industry which increased 10.7 
percent. Nondurable manufacturing also experienced widespread increases in unit labor costs with 32 of 
the 35 industries recording an increase, led by the textile furnishings mills industry with a rise of 17.6 
percent. Of the four industries in the mining sector, three had increases in unit labor costs led by the coal 
mining industry which increased 7.0 percent.

Unit Labor Cost Trends in NAICS 3-Digit Industries, 2019

      * Employers experience increased unit labor costs when hourly compensation growth exceeds 
        productivity growth. Unit labor costs increased in 20 of the 21 manufacturing industries, as 
        hourly compensation growth outpaced that of productivity. Textile mills was the exception 
        and had a decrease in unit labor costs due to hourly compensation declines that exceeded 
        productivity declines.
      * Unit labor costs declined in the oil and gas extraction industry 3.4 percent, as productivity 
        decreased 2.3 percent and hourly compensation decreased 5.6 percent.
      * The mining, except oil and gas industry saw a 5.6-percent increase in unit labor costs, as 
        hourly compensation rose 1.7 percent while productivity dropped 3.8 percent.
Long-Term Trends in Labor Productivity and Unit Labor Costs 

Labor Productivity
      * Over the entire 1987-2019 period, labor productivity rose in 83 of the 91 manufacturing 
        and mining industries. Output rose in 58 industries, while hours worked increased in only 
        17. In the 17 industries where hours worked increased, they rose at a slow pace, 0.7 percent 
        per year on average.
      * During the more recent 2007-19 period, which included the Great Recession of 2007-09, 
        productivity increased in 45 industries. These increases are predominantly the result of a 
        decline in hours worked rather than an increase in output, as hours worked fell in 35 of 
        these industries while output increased in only 18.

Unit Labor Costs
      * During the 1987-2019 period, unit labor costs increased in 76 of the 86 NAICS 4-digit 
        manufacturing industries. All five mining industries saw an increase in unit labor costs.
      * From 2007 to 2019, unit labor costs increased in 79 of the 86 manufacturing industries and in 3 
        of the 5 mining industries. Unit labor costs increased the most in the beverages industry. 

The computer and peripheral equipment industry recorded the largest productivity gain as well as the 
largest unit labor cost decline during both the 1987-2019 and 1987-2007 periods. However, between 
2007 and 2019, the oil and gas extraction industry posted the greatest productivity growth and the 
largest unit labor cost decline.	

Additional Information

Time periods for data covered by this release precede, and are therefore not impacted by, the COVID-19 

Manufacturing industry output measures for 2018 and earlier years are constructed primarily using data 
from the economic censuses and annual surveys of the U.S. Census Bureau together with data on price 
changes primarily from BLS. These measures have been revised due to the release of the 2017 
Economic Census and the 2018 Annual Survey of Manufactures. Manufacturing industry output for 
2019 is estimated based on historical relationships between BLS sectoral output, BLS price indexes, and 
data on industrial production from the Federal Reserve Board.

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*      - Additional industries and sectors                                                                 *
*      - Detailed data series: indexes of productivity and related measures; rates of change; and          *
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*      - Additional years and long-term data                                                               *
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Last Modified Date: June 25, 2020