Productivity and Costs by Industry: Manufacturing and ... · PDF file • Productivity...

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Transcript of Productivity and Costs by Industry: Manufacturing and ... · PDF file • Productivity...

  • For release 10:00 a.m. (EDT) Tuesday, May 9, 2017 USDL-17-0445

    Technical information: (202) 691-5618 • [email protected] • www.bls.gov/lpc Media contact: (202) 691-5902 • [email protected]

    PRODUCTIVITY AND COSTS BY INDUSTRY: MANUFACTURING AND MINING INDUSTRIES – 2016

    Labor productivity rose in 31 of the 90 NAICS 4-digit manufacturing and mining industries in 2016, the U.S. Bureau of Labor Statistics reported today. This was fewer than in 2015 when labor productivity rose in 41 industries. Output and hours worked also increased in fewer industries in 2016 than in the previous year.

    Unit labor costs, which reflect the total labor costs required to produce a unit of output, rose in 64 of the 86 NAICS 4-digit manufacturing industries and in 1 of the 4 mining industries. Eighteen industries with productivity increases recorded declines in unit labor costs.

    Chart 1. Manufacturing and mining industries with the largest change in productivity, 2016 (NAICS 4-digit industries)

    7.9 9.5

    11.6

    10.5

    14.3

    13.6 -9.8

    -9.8

    -9.0

    -9.5

    -17.6-13.1

    -30

    -24

    -18

    -12

    -6

    0

    6

    12

    18

    -30 -24 -18 -12 -6 0 6 12 18

    Percent change in hours worked

    Percent Change in Output

    Industries with increasing productivity Industries with decreasing productivity

    Motor vehicles

    Coal mining

    Seafood product preparation

    Iron and steel mills

    Beverages

    Apparel, knitting mills

    Fabric mills

    Pesticides, fertilizers

    Steel products

    Note: Bubble size represents industry employment. Value in the bubble indicates percent change in labor productivity.

    Audio and video equipment

    Engine, turbine, and power transmission equipment

    Apparel accessories

    8.0

    9.5

    11.7

    10.5

    14.5

    13.5 -9.7

    -9.6

    -8.9

    -9.4

    -17.7 -13.2

    -30

    -24

    -18

    -12

    -6

    0

    6

    12

    18

    -30 -24 -18 -12 -6 0 6 12 18 Percent Change in Hours Worked

    Industries with increasing productivity Industries with decreasing productivity

    Motor vehicles

    Coal mining

    Seafood product preparation and packaging

    Iron and steel mills and ferroalloys

    Percent Change in Output

    Beverages Apparel knitting mills

    Fabric mills

    Agricultural chemicals

    Steel products from purchased steel

    Note: Bubble size represents industry employment. Value in the bubble indicates percent change in labor productivity.

    Audio and video equipment

    Turbine and power transmission equipment

    Accessories and other apparel

  • Chart 1 shows the industries with the largest changes in productivity in 2016. The industries with the largest growth in productivity (those above the diagonal line) had declines in hours worked while, in most cases, their output grew. In contrast, industries below the diagonal line exhibited declining productivity as hours worked usually increased and output mostly declined.

    Trends in Labor Productivity in 2016

    Manufacturing

    Mining

    • Labor productivity increased in 5 of the 21 NAICS 3-digit manufacturing industries in 2016, as output increased in only 2 industries, and hours worked rose in 11 industries. (See chart 2.)

    • Labor productivity increased in 27 of the 86 NAICS 4-digit manufacturing industries in 2016, as output increased in 31 industries, and hours worked fell in 44 industries.

    • Productivity rose fastest in the agricultural chemicals industry, where output increased by 7.7 percent and hours worked declined 5.9 percent.

    • Labor productivity increased in both measured NAICS 3-digit mining industries in 2016. Productivity rose 5.4 percent in oil and gas extraction and rose 4.3 percent in mining, except oil and gas. Both industries saw output decline less than hours worked. (See chart 2.)

    • Productivity increased in all 4 of the NAICS 4-digit mining industries measured. Output fell in 3 of the industries, but hours worked declined at an even greater rate.

    Chart 2. Productivity growth in NAICS 3-digit manufacturing and mining industries, 2016

    -10.2 -5.0

    -3.9 -3.7 -3.6 -3.5 -3.4

    -2.6 -2.4 -2.3 -2.0 -1.5 -1.0 -0.8 -0.7 -0.4

    1.0 2.2

    4.1 4.3 4.3

    5.4 6.6

    -12.0 -6.0 0.0 6.0 12.0

    Beverages and tobacco products Leather and allied products

    Transportation equipment Computer and electronic products

    Miscellaneous manufacturing Food

    Textile product mills Plastics and rubber products Nonmetallic mineral products

    Furniture and related products Fabricated metal products

    Electrical equipment and appliances Apparel

    Wood products Machinery

    Paper Chemicals

    Printing and related support activities Primary metals

    Mining, except oil and gas Petroleum and coal products

    Oil and gas extraction Textile mills

    Percent Change

    Productivity

    -12.0 -6.0 0.0 6.0 12.0 Percent Change

    Output Hours

    2

  • Trends in Unit Labor Costs in 2016

    Manufacturing • Employers face increased unit labor costs when hourly compensation gains outpace

    productivity. For NAICS 3-digit industries, unit labor costs increased in 18 of the 21 manufacturing industries. Chart 3 shows the relationship between changes in hourly compensation, productivity, and unit labor costs.

    • Of the 64 NAICS 4-digit manufacturing industries that had increases in unit labor costs, productivity growth was negative in almost four-fifths of them.

    Mining • Unit labor costs declined in both measured NAICS 3-digit mining industries as productivity

    growth outpaced hourly compensation growth. (See Chart 3.) • Unit labor costs fell in 3 of the 4 NAICS 4-digit mining industries measured, all 3 of which

    posted declining hourly compensation and increasing labor productivity. The only industry with an increase in unit labor costs was nonmetallic mineral mining and quarrying, which had more growth in hourly compensation than in productivity.

    Chart 3. Unit labor costs, productivity, and hourly compensation in NAICS 3-digit manufacturing and mining industries, 2016

    -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14

    Apparel

    Beverages and tobacco products

    Computer and electronic products

    Furniture and related products

    Plastics and rubber products

    Nonmetallic mineral products

    Food

    Transportation equipment

    Leather and allied products

    Textile product mills

    Wood products

    Fabricated metal products

    Miscellaneous manufacturing

    Printing and related support activities

    Paper

    Textile mills

    Electrical equipment and appliances

    Machinery

    Chemicals

    Petroleum and coal products

    Primary metals

    Mining, except oil and gas

    Oil and gas extraction

    Percent Change

    Unit Labor Costs Productivity Hourly Compensation

    3

  • Long-term trends in Labor Productivity and Unit Labor Costs

    Chart 4 displays the number of NAICS 4-digit manufacturing and mining industries with increases in productivity, output, and hours worked for selected time periods through 2016.

    Over the entire 1987-2016 period, labor productivity rose in 85 of the 90 manufacturing and mining industries measured.

    • Productivity growth in the 1987-2016 period was associated with output rising in 59 manufacturing and mining industries, while hours worked increased in only 13.

    • Productivity increased in 48 industries in the more recent 2007-2016 period that included a severe recession.

    • The 2007-2016 productivity increases are predominantly the result of a decline in hours worked, rather than an increase in output, as 72 industries experienced decreasing hours worked in this period compared to 19 industries that documented increasing output.

    From 1987 to 2016, unit labor costs increased in 79 of the 90 manufacturing and mining industries.

    • Among the NAICS 4-digit industries, unit labor costs fell in 11 of the 86 manufacturing industries from 1987 to 2016. None of the 4 mining industries saw declines in unit labor costs.

    • From 2007 to 2016, unit labor costs decreased in 10 of the 86 manufacturing industries. Computer and peripheral equipment was the only industry with declines in both labor productivity and unit labor costs, as hourly compensation fell faster than productivity. In mining, oil and gas extraction saw a decline in unit labor costs while the other 3 industries had gains.

    Computer and peripheral equipment had the largest productivity gains and the largest unit labor cost declines during the 1987 to 2007 period, as well as for the whole 1987 to 2016 interval. However, between 2007 and 2016, magnetic media manufacturing and reproducing posted the greatest productivity growth, while leather and hide tanning and finishing saw the sharpest drop in unit labor costs.

    Chart 4. Manufacturing and mining industries with increases in labor productivity, output, and hours worked

    0

    10

    20

    30

    40

    50

    60

    70

    80

    90

    1987 - 2016 1987 - 2007 2007 - 2016

    Number of Industries

    Productivity Output Hours Worked

    4

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