Full text of Revised Data for 2003 : Text File, USDL 05-308
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INTERNATIONAL COMPARISONS OF MANUFACTURING PRODUCTIVITY AND UNIT
LABOR COST TRENDS, REVISED DATA FOR 2003
Revised data for 2003 show that the increase in U.S.
manufacturing productivity (+9.7 percent) was the second highest
among 14 economies compared, according to the U.S. Department of
Labor's Bureau of Labor Statistics. This was below the increase
recorded in Japan (+11 percent) and ahead of Korea (+9 percent). The
United Kingdom and Sweden also showed productivity gains of over 5
percent, while productivity remained constant in Canada and declined
in Italy. (See chart 1.)
The U.S. productivity growth in 2003, an upward revision from
the preliminary estimate of 6.8 percent released in September 2004,
continues the rapid growth of U.S. manufacturing productivity after
2000, at 6.9 percent per year on average. This was the fastest
growth rate in those years among the 14 economies for which
comparable data are available. Only in two other economies did
productivity growth surpass 5 percent per year after 2000. (Average
annual growth rates for selected measures over various time periods
are found in tables A and B.)
PRINTED COPY CONTAINS CHART AT THIS POINT: Chart 1. Percent change in
manufacturing output per hour, 2002-2003
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Unit labor costs in manufacturing, expressed in national
currency units, fell in 7 of the 15 economies compared. The decline
in unit labor costs in U.S. manufacturing (-1.1 percent) is a
revision from the preliminary estimate (+1.6 percent) released in
September 2004, and corresponds to the revised increase in
productivity. Unit labor costs declined most in Japan (-9.2
percent), reflecting that country's strong productivity growth.
In 2003, the dollar decreased in value against the currencies of
all the other 14 economies compared, especially against the euro and
other European currencies. This resulted in substantially higher
unit labor costs in U.S. dollar terms for most of these economies.
Unit labor costs in U.S. dollars declined only where the U.S.
dollar's depreciation was slight (Taiwan) or where the reduction in
unit labor costs in national currency units was very large (Japan).
(See chart 2 and table A.)
PRINTED COPY CONTAINS CHART AT THIS POINT: Chart 2. Percent change in
manufacturing unit labor costs, 2002-2003
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Table A. Output per hour, hourly compensation, unit labor costs, and related measures
Manufacturing, 15 countries or areas, 2002-2003
Percent change
Output Total Hourly Unit labor costs
Country per Total Employ- Average compen- compen- National U.S. Exchange
or area hour Output hours ment hours sation sation currency dollars rate (1)
United States 9.7 4.5 - 4.8 - 4.7 - 0.1 3.3 8.5 - 1.1 - 1.1 ---
Canada 0.0 0.1 0.1 0.5 - 0.4 1.5 1.3 1.4 13.6 12.1
Australia 3.8 1.7 - 2.0 - 1.9 - 0.1 3.2 5.3 1.4 21.6 19.9
Japan 11.0 9.6 - 1.3 - 2.0 0.7 - 0.5 0.8 - 9.2 - 1.9 8.0
Korea 9.0 4.8 - 3.9 - 3.7 - 0.2 5.1 9.3 0.3 5.2 4.9
Taiwan 3.6 5.7 2.1 1.7 0.4 3.7 1.6 - 1.9 - 1.5 0.4
Belgium 4.7 0.8 - 3.7 - 3.3 - 0.4 0.3 4.1 - 0.5 19.1 19.7
Denmark 3.6 - 0.2 - 3.6 - 3.1 - 0.5 1.0 4.8 1.2 21.3 19.9
France 1.9 - 0.5 - 2.3 - 2.2 - 0.1 0.5 2.9 1.0 20.9 19.7
Germany 2.7 0.2 - 2.4 - 2.7 0.3 - 0.7 1.7 - 0.9 18.6 19.7
Italy - 1.0 - 1.4 - 0.4 0.2 - 0.6 2.8 3.2 4.2 24.8 19.7
Netherlands NA - 2.8 NA - 3.0 NA 0.6 NA 3.5 23.8 19.7
Norway 1.6 - 3.8 - 5.4 - 4.6 - 0.8 - 1.4 4.3 2.6 15.6 12.7
Sweden 6.5 2.6 - 3.6 - 2.8 - 0.9 - 0.1 3.7 - 2.6 17.1 20.3
United Kingdom 5.6 0.4 - 5.0 - 4.5 - 0.5 0.2 5.4 - 0.2 8.5 8.8
(1) Value of foreign currency relative to the U.S. dollar.
NA=Not Available
Additional data available
Annual indexes of these variables also are estimated for the
time period 1950-2003 and are available at the Bureau of Labor
Statistics, Division of Foreign Labor Statistics website at address
http://www.bls.gov/fls/home.htm. Because the value-added output data
for U.S. manufacturing industries are not available prior to 1977,
the comparative measure of output, output per hour, and unit labor
costs for the United States begin with 1977. However, for analytical
purposes, the international comparisons in this release go back to
1979.
For further information, contact the Office of Productivity and
Technology by phone at 202-691-5654, by e-mail at flspr@bls.gov, or
by mail at Bureau of Labor Statistics, 2 Massachusetts Avenue, NE,
Room 2150, Washington, DC 20212.
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Box: Notes about measures
Notes about the measures
The measures in this release are based on data available to BLS as of
mid-January 2005. Revisions for 2003 and earlier years were made for
several economies to incorporate data not available at the time of
the September 2004 report.
United States
U.S. output data in this release have been revised beginning with
1987. The data, a value-added measure, are produced by the BEA as
part of the integrated annual GDP-by-industry and input-output (I-O)
accounts. From 1987 they are now based on the 1997 North American
Industry Classification System (NAICS). Output for 2003 in the
September 2004 report was a preliminary estimate by the BEA, using an
abbreviated methodology and limited source data. The output measure
in this release is based on revised data published by the BEA in
December 2004, incorporating the most timely and highest quality
source data available, including data from the 2004 annual revision
of the national income and product accounts (NIPAs), combined within
an I-O framework. They also incorporate the 2003 comprehensive
revisions of the NIPAs. Additional details are available in Robert
E. Yuskavage and Yvon Pho, "Gross Domestic Product by Industry for
1987-2000," Survey of Current Business, November, 2004, and in the
news release BEA News, December 20, 2004.
The NAICS-based employment, hours, and compensation data back to 1987
are taken from the series published by BLS as part of the major
sector productivity and cost measures for the United States.
Australia
Australian data are published by fiscal years, which run from July 1
through June 30. The Australian Bureau of Statistics provided
unpublished calendar year data for real value added, employment, and
hours worked. For compensation, the Bureau of Labor Statistics
estimated calendar-year series using two-year moving averages of the
data for fiscal years. Manufacturing compensation data are not
available for years prior to 1990.
Japan
In the September 2004 report, a preliminary estimate was made of the
2003 increase in Japanese real manufacturing output, using the
relative change in the industrial production index. In the present
release, the change in output is based on the growth in real value
added in manufacturing. The revision results in a large increase in
Japan's productivity growth for 2003.
Netherlands
Data for hours worked in manufacturing have not been released for
2003 by the Netherlands Central Bureau of Statistics. In this
report, 2003 estimates of labor productivity and hourly compensation
are not available for the Netherlands.
End of Box: Notes about measures
-5-
Manufacturing productivity, output, and labor input
The revised 2003 increase in U.S. manufacturing productivity
(output per hour) of 9.7 percent was half a percentage point below
the corresponding 2002 increase, but well above the average annual
gains of the period since 1979. (See table B.) The average
productivity growth of 6.9 percent per year during 2000-2003 was
greater than for any 3-year period since 1979. Only Japan's
productivity gain of 11 percent was above the U.S. increase in 2003.
Of the 14 economies for which comparable data are available, average
annual productivity growth over the 2000-2003 period was highest in
the United States. Other economies with relatively high average
annual productivity gains over 2000-2003 were Korea, Taiwan, Sweden,
and Japan. Productivity declined in Italy during these years, while
Canada, Germany, and Norway recorded small increases. Productivity
data for 2003 are not estimated for the Netherlands because hours
data are not available. (See tables A and B.)
Changes in manufacturing labor productivity correspond to
changes in output and in total hours worked. Of the 12 economies
that experienced growth in labor productivity in 2003, 9 also had
increases in manufacturing output. Output increased most in Japan
(+9.6 percent). Other economies where manufacturing output went up
over 4 percent in 2003 were Taiwan, Korea, and the United States.
Among European countries, only Sweden recorded output growth above 1
percent, while five countries recorded declines. Both productivity
and output went down in Italy. (See table A.)
Total manufacturing hours worked in 2003 declined in 12 of the
14 economies for which hours data are available, rising only in
Taiwan (+2.1 percent) and Canada (+0.1 percent). The 4.8 percent
fall in 2003 U.S. manufacturing hours was the third largest decline
among the economies compared, after Norway (-5.4 percent) and the
United Kingdom (-5 percent). Italy, Japan, and Australia experienced
declines in hours of 2 percent or less. (See table A.)
The reductions in manufacturing hours reflect a trend in most
industrial economies, as hours worked fell over the 1979-2003 period
in 11 of the 13 economies for which hours data are available. Also,
in all of these 11 countries, the 2003 fall was greater than the
1979-2003 average annual decline. (See table B.) For the United
States, the drop in hours during 2000-2003 was greater than for any
3-year period since 1950.
Productivity increased in 11 of the 12 countries with hours
declines. This occurred even in France, Denmark, and Norway, where
output fell, because hours declined more. (See table A.)
Total hours worked are a function of both the number of people
employed and the average hours worked per person. In 2003,
manufacturing employment fell in 12 of the 15 economies. Employment
declined most in the United States (-4.7 percent), followed closely
by Norway and the United Kingdom. The United States also had the
largest percent decline in employment in 2002, as well as over the
entire 2000-2003 period. In 2003, employment decreased least in
Australia, and it grew in Taiwan, Canada, and Italy. (See tables A
and B.)
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In 2003, average hours worked per person fell in 11 of the 14
economies for which hours data are available, while going up in only
Japan, Taiwan, and Germany. Average hours fell most in Sweden (-0.9
percent) and Norway (-0.8). In the United States average hours
worked went down by 0.1 percent.
Although both factors, employment and average hours, contributed
to the declines in total manufacturing hours in 2003, the impact of
the reductions in employment was greater: of the 12 countries where
total hours went down, the employment declines were relatively larger
than the declines in average hours in all except Italy, where
employment rose while average hours declined. (See table A.)
Manufacturing hourly compensation and unit labor costs
In 2003, the United States recorded the second largest increase
in manufacturing hourly compensation, expressed in national currency
units, among the 14 economies for which comparable data are
available. The U.S. 8.5 percent increase trailed only Korea's 9.3
percent growth. Hourly compensation grew in all the 14 economies,
with the smallest increases occurring in Japan, Canada, and Taiwan.
The U.S. 2003 increase in hourly compensation was above its average
annual growth rates for 1979-2003. Since 1983, U.S. hourly
compensation grew more only in 2000. Hourly compensation data for
2003 are not estimated for the Netherlands because hours data are not
available. (See table B.)
Relative changes in unit labor costs, expressed in national
currency units, are directly proportional to relative changes in
hourly compensation, and inversely proportional to relative changes
in labor productivity. In 2003, both hourly compensation and labor
productivity increased in most of the economies compared, so that
changes in unit labor costs were determined by the relative
magnitudes of these increases. Unit labor costs, in national
currency units, fell in 7 of the 15 economies compared. The drop was
greatest in Japan (-9.2 percent), reflecting that country's large
increase in manufacturing productivity. In the United States unit
labor costs declined by 1.1 percent despite the large increase in
hourly compensation, because productivity increased even more. This
drop in U.S. unit labor costs followed a 3.2 percent decline in 2002,
and was approximately equal to the average annual reductions over the
2000-2003 period. In 2003, unit labor costs increased most in Italy
(+4.2 percent), a combination of a 3.2 percent increase in hourly
compensation and a 1 percent decline in productivity. (See tables A
and B.)
Often exchange rate movements are the dominant influence on the
relative changes in the unit labor costs of different economies. In
2003, the U.S. dollar depreciated against the currencies of all the
economies compared, especially against the euro and other European
currencies. This depreciation was at double-digit rates against the
currencies of Canada, Australia, and all European countries except
the United Kingdom. (See table A.)
The depreciation of the U.S. dollar pushed up U.S. dollar-denominated
unit labor costs in most of the other economies being compared.
These increases were also at double-digit rates in all the European
countries except the United Kingdom, as well as in Canada and
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Australia. Besides the United States, U.S. dollar-denominated unit
labor costs declined only in Japan and Taiwan. In Japan the
reduction was the result of a 9.2 percent drop in yen-denominated
unit labor costs that was only partly offset by the 8 percent
appreciation of the yen against the U.S. dollar. The Taiwan dollar
appreciated only slightly against the U.S. dollar (+0.4 percent) in
2003, not enough to counter a 1.9 percent decline in local currency-
denominated unit labor costs. For both 2002 and 2003 the dollar's
depreciation increased unit labor costs, denominated in U.S. dollars,
in most of the other economies compared. This effect was especially
strong in 2003. (See tables A and B and chart 3.)
-8-
Table B. Output per hour, hourly compensation, unit labor costs, and related measures
Manufacturing, 15 countries or areas, 1979-2003
Average annual rates of change 1/
Country 1979-2003 1979-1990 1990-1995 1995-2000 2000-2003 2001-2002 2002-2003
or area
Output per hour
United States 4.2 3.0 3.7 5.7 6.9 10.2 9.7
Canada 2.5 2.0 3.8 3.2 0.8 4.2 0.0
Australia 3.1 2.8 2.9 3.9 3.5 3.4 3.8
Japan 3.8 3.8 3.3 4.1 4.3 2.3 11.0
Korea NA NA 9.6 10.8 5.9 9.8 9.0
Taiwan 5.8 6.2 5.2 5.5 5.6 7.5 3.6
Belgium 3.6 4.2 3.2 2.9 3.3 4.2 4.7
Denmark 2.3 2.1 2.7 2.4 2.4 3.2 3.6
France 4.2 4.2 4.0 4.5 3.5 4.8 1.9
Germany 2/ 2.4 2.1 3.3 2.7 1.7 2.1 2.7
Italy 1.6 2.2 2.2 1.0 -0.8 -1.7 -1.0
Netherlands NA 3.5 3.5 2.5 NA 2.2 NA
Norway 1.5 2.0 0.5 1.1 2.1 1.7 1.6
Sweden 4.4 2.5 5.7 7.1 4.7 10.4 6.5
United Kingdom 3.6 4.1 3.3 2.6 3.7 2.1 5.6
Output
United States 3.0 2.4 3.6 5.4 0.3 2.3 4.5
Canada 2.5 1.8 2.4 5.9 -0.6 2.4 0.1
Australia 1.7 1.6 0.9 2.6 2.0 4.4 1.7
Japan 2.8 4.7 0.4 2.0 1.0 -2.6 9.6
Korea 8.6 10.1 8.4 7.9 4.8 7.6 4.8
Taiwan 5.9 7.5 4.9 5.6 2.1 7.4 5.7
Belgium 1.9 2.6 0.6 2.9 0.3 0.1 0.8
Denmark 1.2 1.0 2.0 1.6 -0.4 -0.6 -0.2
France 2.0 2.0 1.1 3.5 1.1 0.9 -0.5
Germany 2/ 0.6 1.2 -0.7 1.2 -0.3 -0.7 0.2
Italy 1.3 2.0 1.5 1.2 -1.0 -1.2 -1.4
Netherlands 1.9 2.5 1.8 2.6 -1.4 -0.8 -2.8
Norway 0.0 -0.4 1.1 1.0 -1.7 -0.7 -3.8
Sweden 3.4 1.8 3.7 7.4 2.0 5.7 2.6
United Kingdom 0.6 0.9 0.5 1.3 -1.4 -3.1 0.4
Continued on next page
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Table B. Output per hour, hourly compensation, unit labor costs, and related measures
Manufacturing, 15 countries or areas, 1979-2003
Average annual rates of change 1/
Country 1979-2003 1979-1990 1990-1995 1995-2000 2000-2003 2001-2002 2002-2003
or area
Total hours
United States -1.1 -0.6 -0.1 -0.2 -6.2 -7.1 -4.8
Canada 0.0 -0.2 -1.3 2.6 -1.4 -1.7 0.1
Australia -1.4 -1.2 -2.0 -1.2 -1.5 1.0 -2.0
Japan -1.0 0.8 -2.8 -2.0 -3.1 -4.8 -1.3
Korea NA NA -1.1 -2.6 -1.0 -2.0 -3.9
Taiwan 0.1 1.2 -0.3 0.1 -3.3 -0.1 2.1
Belgium -1.6 -1.6 -2.5 -0.1 -2.9 -4.0 -3.7
Denmark -1.1 -1.1 -0.6 -0.8 -2.7 -3.7 -3.6
France -2.1 -2.1 -2.8 -1.0 -2.3 -3.8 -2.3
Germany 2/ -1.8 -0.9 -3.9 -1.5 -2.0 -2.7 -2.4
Italy -0.3 -0.2 -0.7 0.1 -0.3 0.5 -0.4
Netherlands NA -1.0 -1.7 0.0 NA -2.9 NA
Norway -1.4 -2.3 0.6 -0.1 -3.7 -2.4 -5.4
Sweden -1.0 -0.7 -1.9 0.3 -2.6 -4.2 -3.6
United Kingdom -2.9 -3.1 -2.8 -1.3 -4.9 -5.1 -5.0
Employment
United States -1.2 -0.8 -0.5 -0.1 -5.5 -7.3 -4.7
Canada 0.0 -0.2 -1.5 2.4 -0.7 -1.3 0.5
Australia -1.5 -1.3 -2.3 -1.1 -1.4 1.0 -1.9
Japan -0.7 1.0 -1.6 -1.9 -3.1 -4.7 -2.0
Korea NA NA -0.8 -2.5 0.0 -1.2 -3.7
Taiwan 0.7 2.0 -0.3 0.4 -1.6 -1.8 1.7
Belgium -1.6 -1.6 -2.2 -0.7 -2.2 -4.0 -3.3
Denmark -1.0 -0.5 -1.2 -0.9 -2.6 -3.3 -3.1
France -1.4 -1.6 -2.5 -0.3 -0.9 -1.7 -2.2
Germany 2/ -1.3 -0.1 -4.2 -0.8 -1.5 -2.2 -2.7
Italy -0.7 -0.9 -1.6 0.1 0.3 0.8 0.2
Netherlands -0.9 -0.8 -1.6 0.2 -2.1 -2.9 -3.0
Norway -1.3 -2.2 0.3 0.1 -2.9 -1.2 -4.6
Sweden -1.4 -1.0 -3.5 0.0 -1.5 -2.7 -2.8
United Kingdom -2.7 -2.9 -2.6 -1.4 -4.5 -4.4 -4.5
Continued on next page
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Table B. Output per hour, hourly compensation, unit labor costs, and related measures
Manufacturing, 15 countries or areas, 1979-2003
Average annual rates of change 1/
Country 1979-2003 1979-1990 1990-1995 1995-2000 2000-2003 2001-2002 2002-2003
or area
Average hours
United States 0.1 0.2 0.4 -0.2 -0.7 0.2 -0.1
Canada 0.0 0.0 0.3 0.2 -0.6 -0.4 -0.4
Australia 0.1 0.1 0.3 -0.1 0.0 0.0 -0.1
Japan -0.4 -0.2 -1.3 -0.1 0.0 0.0 0.7
Korea NA NA -0.2 -0.1 -1.1 -0.7 -0.2
Taiwan -0.6 -0.8 0.0 -0.3 -1.8 1.7 0.4
Belgium 0.0 0.0 -0.3 0.6 -0.7 0.0 -0.4
Denmark -0.2 -0.6 0.6 0.1 -0.1 -0.4 -0.5
France -0.6 -0.5 -0.3 -0.7 -1.4 -2.1 -0.1
Germany 2/ -0.5 -0.9 0.3 -0.6 -0.5 -0.5 0.3
Italy 0.4 0.6 0.9 0.0 -0.6 -0.3 -0.6
Netherlands NA -0.2 0.0 -0.2 NA 0.0 NA
Norway -0.2 -0.1 0.3 -0.2 -0.9 -1.2 -0.8
Sweden 0.4 0.3 1.7 0.2 -1.1 -1.6 -0.9
United Kingdom -0.2 -0.2 -0.2 0.1 -0.4 -0.7 -0.5
Total labor compensation in manufacturing 3/: National currency basis
United States 3.8 4.9 3.4 4.4 -0.7 -0.9 3.3
Canada 4.7 6.5 2.4 5.2 1.3 1.6 1.5
Australia NA NA 3.5 3.1 3.5 4.3 3.2
Japan 2.4 5.5 0.7 -1.1 -0.4 2.0 -0.5
Korea NA NA 17.6 5.4 6.4 7.9 5.1
Taiwan 7.9 13.5 6.8 3.6 -2.2 -4.3 3.7
Belgium 2.9 4.4 1.3 2.0 1.4 -0.5 0.3
Denmark 4.4 6.8 2.3 3.0 2.0 0.9 1.0
France 3.6 6.5 1.1 1.1 1.8 1.5 0.5
Germany 2/ 2.9 4.6 2.3 1.6 0.3 -0.6 -0.7
Italy 7.0 11.4 4.2 2.9 2.8 3.0 2.8
Netherlands 3.0 3.1 2.8 3.4 2.7 3.5 0.6
Norway 5.0 6.5 4.0 5.0 1.5 3.4 -1.4
Sweden 5.6 8.4 2.0 5.3 2.1 1.0 -0.1
United Kingdom 4.5 7.1 2.4 3.4 0.1 0.1 0.2
Continued on next page
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Table B. Output per hour, hourly compensation, unit labor costs, and related measures
Manufacturing, 15 countries or areas, 1979-2003
Average annual rates of change 1/
Country 1979-2003 1979-1990 1990-1995 1995-2000 2000-2003 2001-2002 2002-2003
or area
Hourly compensation: National currency basis
United States 5.0 5.5 3.5 4.7 5.8 6.7 8.5
Canada 4.7 6.8 3.8 2.5 2.7 3.3 1.3
Australia NA NA 5.6 4.3 5.0 3.3 5.3
Japan 3.4 4.6 3.6 1.0 2.9 7.1 0.8
Korea NA NA 18.9 8.1 7.5 10.1 9.3
Taiwan 7.8 12.1 7.1 3.4 1.2 -4.2 1.6
Belgium 4.6 6.1 3.9 2.0 4.4 3.6 4.1
Denmark 5.6 7.9 2.9 3.8 4.8 4.9 4.8
France 5.8 8.8 4.0 2.2 4.2 5.4 2.9
Germany 2/ 4.8 5.6 6.4 3.1 2.3 2.2 1.7
Italy 7.3 11.7 4.9 2.8 3.1 2.4 3.2
Netherlands NA 4.1 4.5 3.3 NA 6.5 NA
Norway 6.6 9.0 3.4 5.2 5.4 6.0 4.3
Sweden 6.7 9.1 4.0 5.1 4.8 5.5 3.7
United Kingdom 7.6 10.6 5.4 4.8 5.3 5.5 5.4
Unit labor costs 3/: National currency basis
United States 0.7 2.5 -0.2 -0.9 -1.0 -3.2 -1.1
Canada 2.2 4.7 0.0 -0.6 2.0 -0.8 1.4
Australia NA NA 2.6 0.4 1.5 -0.1 1.4
Japan -0.4 0.8 0.3 -3.0 -1.4 4.7 -9.2
Korea NA NA 8.5 -2.4 1.5 0.3 0.3
Taiwan 1.9 5.5 1.9 -1.9 -4.2 -10.9 -1.9
Belgium 0.9 1.8 0.7 -0.9 1.1 -0.6 -0.5
Denmark 3.2 5.7 0.2 1.4 2.4 1.6 1.2
France 1.6 4.4 -0.1 -2.2 0.7 0.6 1.0
Germany 2/ 2.3 3.3 3.1 0.4 0.6 0.1 -0.9
Italy 5.6 9.3 2.6 1.8 3.9 4.2 4.2
Netherlands 1.2 0.6 1.0 0.8 4.2 4.3 3.5
Norway 5.0 6.9 2.9 4.0 3.2 4.2 2.6
Sweden 2.2 6.5 -1.6 -1.9 0.0 -4.5 -2.6
United Kingdom 3.8 6.2 2.0 2.1 1.5 3.3 -0.2
Continued on next page
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Table B. Output per hour, hourly compensation, unit labor costs, and related measures
Manufacturing, 15 countries or areas, 1979-2003
Average annual rates of change 1/
Country 1979-2003 1979-1990 1990-1995 1995-2000 2000-2003 2001-2002 2002-2003
or area
Unit labor costs 3/: U.S. dollar basis
United States 0.7 2.5 -0.2 -0.9 -1.0 -3.2 -1.1
Canada 1.5 4.7 -3.2 -2.2 4.0 -2.2 13.6
Australia NA NA 1.5 -4.3 5.4 5.1 21.6
Japan 2.3 4.6 9.4 -5.7 -3.8 1.6 -1.9
Korea NA NA 6.7 -9.5 -0.3 3.7 5.2
Taiwan 2.1 8.4 2.2 -5.1 -7.2 -12.7 -1.5
Belgium 0.1 0.6 3.3 -8.4 8.2 5.0 19.1
Denmark 2.2 4.1 2.3 -5.8 9.7 7.3 21.3
France 0.3 2.1 1.7 -8.9 7.8 6.2 20.9
Germany 2/ 2.6 4.5 5.6 -7.2 7.7 5.7 18.6
Italy 2.5 5.7 -3.5 -3.2 11.2 10.0 24.8
Netherlands 1.3 1.5 3.6 -6.9 11.5 10.1 23.8
Norway 3.5 4.9 2.6 -2.7 11.0 17.4 15.6
Sweden -0.5 3.4 -5.2 -6.7 4.4 1.6 17.1
United Kingdom 2.7 4.5 -0.5 1.3 4.1 7.8 8.5
Exchange rates 4/
United States -- -- -- -- -- -- --
Canada -0.7 0.0 -3.2 -1.6 2.0 -1.4 12.1
Australia -2.2 -3.2 -1.1 -4.7 3.9 5.2 19.9
Japan 2.7 3.8 9.1 -2.7 -2.4 -2.9 8.0
Korea -3.7 -3.4 -1.7 -7.3 -1.7 3.3 4.9
Taiwan 0.2 2.7 0.3 -3.3 -3.1 -2.1 0.4
Belgium -0.8 -1.2 2.5 -7.6 7.0 5.6 19.7
Denmark -0.9 -1.5 2.0 -7.1 7.2 5.7 19.9
France -1.3 -2.2 1.8 -6.8 7.0 5.6 19.7
Germany 2/ 0.2 1.1 2.5 -7.5 7.0 5.6 19.7
Italy -3.0 -3.3 -6.0 -4.9 7.0 5.6 19.7
Netherlands 0.1 0.9 2.6 -7.6 7.0 5.6 19.7
Norway -1.4 -1.9 -0.3 -6.4 7.6 12.7 12.7
Sweden -2.6 -2.9 -3.7 -4.9 4.3 6.4 20.3
United Kingdom -1.1 -1.6 -2.4 -0.8 2.5 4.4 8.8
NA = not available
1/ Rates of change based on the compound 3/ Adjusted for employment taxes and
rate method. government subsidies to estimate the
actual cost to employers.
2/ Data for years before 1991 pertain to the
former West Germany. 4/ Value of foreign currency relative to
the U.S. dollar.
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Trade-weighted unit labor costs
BLS constructs indexes of U.S. unit labor cost trends relative to a
trade-weighted average of unit labor cost trends in the other economies
to take account of differences in the relative importance of foreign
economies to U.S. trade in manufactured goods. Relative trade-weighted
unit labor cost indexes are calculated on both a national currency and a
U.S. dollar basis. In this release, the relative U.S. trade-weighted
indexes are estimated against 12 economies for which comparable data are
available over this period; the indexes underlying this chart are shown
in table C.
Chart 3 begins in 1979, a year in which U.S. manufacturing output
reached a business cycle peak.
PRINTED COPY CONTAINS CHART AT THIS POINT: Chart 3. US manufacturing
unit labor costs relative to 12 competitors, 1979-2003
In the chart, the solid line indicates that U.S. unit labor costs
rose faster than "competitors" costs from 1979 to 1986 on a U.S. dollar
basis. In most years from 1986 to 1995, U.S. costs either rose at a
slower rate than the "competitors" costs or fell at a faster rate. From
1996 to 1998, however, the strength of the U.S. dollar caused relative
U.S. unit labor costs to rise. After a dip in 1999, the index of
relative U.S. unit labor costs rose in 2000 and 2001, only to dip again
after 2001 with a weakening of the U.S. dollar.
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Table C. U.S. manufacturing unit labor
costs relative to 12 competitors(1), 1979-2003
Unit Labor Costs Unit Labor Costs
National Currency Basis U.S. Dollar Basis
Year Own Competitors' Own Competitors'
Index Index Ratio Index Index Ratio
1979 100.0 100.0 100.0 100.0 100.0 100.0
1980 111.4 110.3 101.0 111.4 110.0 101.2
1981 116.5 119.0 97.9 116.5 109.4 106.5
1982 124.2 126.7 98.0 124.2 105.5 117.7
1983 121.6 128.8 94.4 121.6 104.3 116.6
1984 121.0 130.0 93.1 121.0 99.3 121.9
1985 123.4 130.7 94.4 123.4 96.9 127.3
1986 128.9 136.2 94.7 128.9 122.9 104.8
1987 122.8 138.6 88.6 122.8 142.0 86.5
1988 123.9 138.5 89.4 123.9 152.8 81.1
1989 126.7 141.5 89.6 126.7 150.8 84.1
1990 130.6 147.3 88.7 130.6 163.1 80.1
1991 134.0 152.9 87.6 134.0 172.4 77.7
1992 135.0 156.3 86.4 135.0 180.4 74.8
1993 134.0 156.9 85.4 134.0 176.7 75.8
1994 131.4 154.3 85.1 131.4 176.7 74.4
1995 129.1 153.8 84.0 129.1 186.1 69.4
1996 126.4 154.9 81.6 126.4 177.9 71.0
1997 124.5 152.5 81.6 124.5 162.7 76.5
1998 123.1 154.0 79.9 123.1 155.6 79.1
1999 121.8 151.3 80.6 121.8 157.6 77.3
2000 123.1 145.9 84.4 123.1 147.7 83.4
2001 124.7 149.8 83.3 124.7 141.8 88.0
2002 120.8 151.4 79.7 120.8 144.3 83.7
2003 119.4 147.6 80.9 119.4 157.4 75.9
(1) Data for Australia and Korea are not available for 1979.
These two countries have been omitted from this table.
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Technical Notes
The comparisons in this release make use of data made available to
BLS as of mid-January 2005 by the statistical agencies of the individual
countries.
Labor productivity is defined as real output per hour worked.
Although the labor productivity measure presented in this release
relates output to the hours worked of persons employed in manufacturing,
it does not measure the specific contributions of labor as a single
factor of production. Rather, it reflects the joint effects of many
influences, including new technology, capital investment, capacity
utilization, energy use, and managerial skills, as well as the skills
and efforts of the workforce.
Unit labor costs are defined as the cost of labor input required to
produce one unit of output. They are computed as compensation in nominal
terms divided by real output.
The Bureau of Labor Statistics constructs trends of manufacturing
labor productivity, hourly compensation costs, and unit labor costs from
three basic aggregate measures - output, total labor hours, and total
compensation. The hours and compensation measures refer to employees
(wage and salary earners) in Belgium and Taiwan. For all other
economies, the measures refer to all employed persons, including
employees, self-employed persons, and unpaid family workers. For all of
the economies, the term "hours" refers to hours worked.
In general, the measures relate to total manufacturing as defined by
the International Standard Industrial Classification (ISIC). However,
the measures for France include parts of mining. From 1987 forward, data
for the United States are in accordance with the North American
Industrial Classification System (NAICS 97). Prior to that, they are in
accordance with the Standard Industrial Classifications (SIC 87, 1987-
1997; SIC 72, 1950-1986). Canadian output and compensation data from
1961, and employment and hours data from 1997, are in accordance with
the NAICS 97. For prior years they are based on the Canadian SIC 80.
For most countries, the data for the most recent years are based on
the United Nations System of National Accounts 1993 (SNA 93) or its sub-
system, the European System of Integrated National Accounts (ESA 95).
For other countries and for earlier years, data were compiled according
to previously used systems.
To obtain historical time series, BLS may link together data series
which were compiled according to different accounting systems by the
countries' statistical agencies.
Output. For most countries, the output measures are real value added
in manufacturing from national accounts. However, output for Japan prior
to 1970 and for the Netherlands prior to 1960 are indexes of industrial
production. The manufacturing value added measures for the United
Kingdom are essentially identical to their indexes of industrial
production.
The output measure for manufacturing in the United States is the
chain-weighted index of real gross product originating (deflated value
added), introduced by the Bureau of Economic Analysis (BEA) of the U.S.
Department of Commerce in August 1996. Because these value added output
data for U.S. manufacturing industries are not available for years prior
to 1977, the comparative U.S. measures of output, output per hour, and
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unit labor costs begin with 1977. For more information on the U.S.
measure, see "Improved Estimates of Gross Product by Industry for 1947-
98," Survey of Current Business, June 2000, pp. 24-38 and "Gross
Domestic Product by Industry for 1987-2000," Survey of Current Business,
November 2004, pp. 33-53.
The U.S. output series used for international comparisons differs
from the manufacturing output series that BLS publishes as part of its
major sector productivity and costs measures for the United States.
While both series are based on annually-changing price weights, the
international comparisons program uses a value added output concept,
while the major sector series is on a sectoral output basis and begins
with 1949. Sectoral output is gross output less intrasector sales and
transfers. The U.S. major sector productivity and costs measures can be
found at http://www.bls.gov/lpc/home.htm. For information on sectoral
output, see "Measurement of productivity growth in U.S. manufacturing,"
Monthly Labor Review, July 1995, pp. 13-28.
Value added measures have been used for the international comparisons
series because the data are more readily available from the countries'
national accounts, whereas sectoral output would require a complex
estimation procedure. Also, although BLS has determined that sectoral
output is the correct concept for U.S. measures of productivity, there
are other considerations that may make value added a better concept for
international comparisons of labor productivity, such as differences
among countries in the extent of vertical integration of industries.
Estimation of manufacturing real output using moving price weights,
as recommended by SNA 93, is becoming prevalent. However, many earlier
time periods within the historical real output series have been
estimated using fixed price weights, with the weights updated
periodically (for example, every 5 or 10 years).
Measures of real output also may differ among countries because of
different approaches to estimating the prices of high-technology
products like computers and, in general, of products that undergo rapid
quality change.
Labor Input. For the United States, the hours worked data are taken from
the BLS major sector productivity program. The aggregate hours worked
series used for France (from 1970 forward), Canada, Denmark, Norway, and
Sweden are series published with the national accounts. For the former
West Germany after 1959 and Germany from 1991, BLS uses a measure of
aggregate hours worked that was developed by a research institute of the
German Ministry of Labor for use with the national accounts employment
figures. For the United Kingdom from 1992, an annual index of total
manufacturing hours is used. For all other countries, the U.K. before 1992,
and the former West Germany before 1959, BLS constructs its own estimates of
aggregate hours, using employment figures published with the national accounts,
or other comprehensive employment series, and estimates of average annual
hours worked. The Italian hours worked series is based on estimates by
the Bank of Italy.
Compensation (Labor Cost). The compensation measures are from
national accounts data and are in nominal terms. Compensation includes
employer expenditures for legally required insurance programs and
contractual and private benefit plans, in addition to all payments made
in cash or in kind directly to employees. When data for the self-
employed
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are not available, total compensation is estimated by assuming the same
average compensation for the self-employed as for employees.
Labor cost is defined as compensation plus employment taxes minus
employment subsidies, i.e. the cost to employers of hiring labor. For
most countries, labor cost is the same as compensation. However, for
Australia, Canada, France, and Sweden, compensation is increased to
account for important taxes on payroll or employment. For the United
Kingdom, compensation is reduced between 1967 and 1991 to account for
subsidies.
Data for Germany. German data prior to 1991 pertain to the former
West Germany. The data series are linked in 1991.
Data for Australia. Australian data are published by fiscal years,
which run from July 1 through June 30. The Australian Bureau of
Statistics provides unpublished calendar-year data for real value added,
employment, and hours worked. For compensation, the Bureau of Labor
Statistics estimates calendar-year series using two-year moving averages
of the data for fiscal years. Manufacturing compensation data are not
available for years prior to 1990.
Current Indicators. The measures for recent years may be based on
current indicators of output (such as industrial production indexes),
employment, average hours, and hourly compensation until national
accounts and other statistics, normally used for the long-term measures,
become available.
Trade-Weighted Measures. The trade weights for Canada, Japan, and the
European countries were obtained by re-scaling a series of weights,
developed by the International Monetary Fund, based on average trade
flows over the 1989-91 period. These weights are based on aggregate
trade data for total manufacturing and take account of both bilateral
trade and the relative importance of "third country" markets. The 1989-
91 weights do not include Taiwan. BLS developed weights for Taiwan by
using data from an earlier study from the International Monetary Fund
and other sources. The weight used for Germany is based on the trade
weight of the former West Germany.
The following weights were used for the entire period for which
trade-weighted unit labor cost measures are produced:
Country Weight Country Weight
Canada 25.31 Germany 11.61
Japan 30.57 Italy 4.60
Taiwan 5.79 Netherlands 2.25
Belgium 2.14 Norway 0.48
Denmark 0.48 Sweden 1.89
France 5.90 United Kingdom 8.99
Level Comparisons. The BLS measures are limited to trend comparisons.
BLS does not prepare level comparisons of manufacturing productivity and
unit labor costs because of data limitations and technical problems in
comparing the levels of manufacturing output among countries. Each
country measures manufacturing output in its own
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currency units. To compare outputs among countries, a common unit of
measure is needed. Market exchange rates are not suitable as a basis for
comparing output levels. What is needed are purchasing power parities,
which are the number of foreign currency units required to buy goods and
services equivalent to what can be bought with one unit of U.S.
currency.
Purchasing power parities are available for total gross domestic
product (GDP) from the Organization for Economic Cooperation and
Development (OECD). However, these parities are derived for expenditures
made by consumers, business, and government for goods and services - not
for value added by industry. Therefore, they do not provide purchasing
power parities by industry. The parities developed for total GDP are not
suitable for each component industry, such as manufacturing.
European exchange rates. On Jan. 1, 1999, 11 European countries
joined the European Monetary Union (EMU). Greece joined on Jan. 1, 2001.
The euro, the official currency of the EMU, was established at fixed
conversion rates to the previous national currencies of EMU members.
Data on manufacturing value added and labor compensation for euro-area
countries are now reported in euros. And exchange rates between the
previous national currencies of euro-area countries and the U.S. dollar
are no longer reported; only the exchange rate between the euro and the
U.S. dollar is available.
In order to maintain historical continuity of data series, data for
euro-area countries for years before 1999 have been converted to euros
by applying the fixed euro/national currency conversion rates. For
countries and years where output, compensation, and exchange rates are
converted from national currency units into euros, the following fixed
conversion rates are used:
1 euro equals: 40.3399 Belgian francs 1936.27 Italian lire
6.55957 French francs 2.20371 Netherlands guilders
1.95583 German marks
The currency exchange rates cited in this publication are annual
averages of daily buying rates in New York City.