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Historical, technical USDL 00-156
information: (202) 691-5618 FOR RELEASE: 10:00 a.m. EDT
Media contact: (202) 691-5902 Friday, May 26, 2000
Internet: http://stats.bls.gov/iprhome.htm
PRODUCTIVITY AND COSTS: SERVICE-PRODUCING AND MINING INDUSTRIES,
1987-98
The Bureau of Labor Statistics of the U.S. Department of
Labor reported today on labor productivity and unit labor cost
changes for selected industries in the service-producing and
mining sectors of the U.S. economy. This is the first industry
productivity news release to include unit labor costs,
introduced by BLS in 1999 for these industries. Labor
productivity--defined as output per hour--rose for most of these
industries in 1998. Nearly half of the industries registering
productivity growth also posted declines in unit labor costs.
In 1998, labor productivity increased in 80 percent of the
service-producing and mining industries reported here. Output
growth was recorded by 82 percent of the industries, while hours
of labor grew in 54 percent of the industries. The proportion
of service-producing and mining industries experiencing long-term
productivity growth was larger than the proportion with short-
term productivity growth. Over the 1987-98 period, output per
hour advanced in 92 percent of the service-producing and mining
industries. Output rose in 88 percent of the industries, while
hours of labor grew in 64 percent of the industries.
The attached tables present data for service-producing and
mining industries for which BLS publishes productivity series at
the 3-digit level of the Standard Industrial Classification
(SIC) Manual. Although the analysis that follows will focus on
industries at the 3-digit level, BLS also publishes productivity
series at the 2- and 4-digit level for these industries as well
as for manufacturing industries. (See section on �Productivity
measurement� in the technical note.)
*********************************************************
* Productivity and costs measures for the manufacturing *
* industries, 1987-97, also are being released today by *
* BLS. See news release USDL 00-155. *
*********************************************************
Retail trade
Current trends
Productivity rose in 1998 in 25 of the 28 published 3-digit
industries in retail trade. The increases ranged from 0.1
percent in new and used car dealers to 20.4 percent in radio,
television, computer, and music stores. The largest industries
in retail trade, those with more than 2,400,000 employees, are
eating and drinking places, grocery stores, and department
stores. In 1998, output per hour rose 0.6 percent in eating and
drinking places, 1.1 percent in grocery stores, and 4.8 percent
in department stores. Productivity declined in only three
retail trade industries reported here. The three industries
registering productivity declines were fuel dealers (-1.3
percent), shoe stores (-5.0 percent), and retail bakeries
(-13.9 percent).
Of the 25 industries in retail trade that recorded
productivity growth, 13 also experienced decreases in unit labor
costs in 1998. The decreases in unit labor costs ranged from
0.6 percent in nonstore retailers to 8.9 percent in radio,
television, computer, and music stores. Despite productivity
growth, unit labor costs rose in the largest industries in
retail trade--4.7 percent in eating and drinking places, 2.7
percent in grocery stores, and 0.3 percent in department stores.
All of the industries that experienced productivity declines
also experienced increases in unit labor costs.
Long-term trends
Although the proportion of retail trade industries with
long-term productivity growth from 1987-98 was the same as the
proportion with short-term productivity growth, the long-term
rates tended to be lower than the 1998 rates. Output per hour
increased in 25 of the 28 industries during the 1987-98 period.
Among these retail industries, labor productivity advanced at
average annual rates exceeding 5.0 percent in five industries.
An additional 13 industries registered annual growth rates in
output per hour in the 2.0-5.0 percent range.
Over the 1987-98 period, unit labor costs declined in 8 of
the 28 retail trade industries. The largest declines were in
variety stores (-4.7 percent per year), radio, television,
computer, and music stores (-3.5 percent per year), and
household appliance stores (-2.2 percent per year).
Finance and services
Short-term trends
In 1998, gains in output per hour were posted in eight of
the nine industries in finance and services for which BLS
published data at the 3-digit level. The largest industry in
terms of employment was hotels and motels, where productivity
climbed 0.8 percent. In the next largest industry, commercial
banks, output per hour was virtually unchanged.
The only declines in unit labor costs occurred in
automotive repair shops (-1.0 percent) and funeral services and
crematories (-2.0 percent) in 1998. The largest industries in
finance and services experienced rising unit labor costs. Unit
labor costs advanced 4.9 percent in hotels and motels and 8.6
percent in commercial banks.
Long-term trends
All nine industries in the finance and services sector
registered long-term labor productivity growth. From 1987 to
1998, output per hour rose at an average annual rate of 0.8
percent in hotels and motels and 2.6 percent in commercial
banks.
All but one of the nine industries in finance and services
experienced rising unit labor costs. Only barber shops posted a
long-term decline in unit labor costs. Unit labor costs
decreased 0.9 percent per year in this industry.
Transportation, communications, and utilities
Current trends
Among the transportation industries with 1998 data included
in this release, output per hour advanced 1.1 percent in the U.S.
postal service, but fell in trucking (-1.8 percent) and in
air transportation (-2.8 percent). (See table 1.) Productivity
gains were recorded in two of the three communications
industries, rising 6.4 percent in telephone communications and
0.4 percent in cable and other pay TV services. In contrast,
productivity fell 0.3 percent in radio and television
broadcasting. In the utilities sector, output per hour climbed
4.5 percent in electric utilities, but declined 3.3 percent in
gas utilities.
In 1998, unit labor costs fell 2.1 percent in telephone
communications. All other industries in the transportation,
communications, and utilities sectors with 1998 data recorded
rising unit labor costs.
NOTE: The most recent productivity and costs figures
available for railroad transportation are for 1997.
Long-term trends
Over the 1987-98 period, all of the industries in the
transportation, communications, and utilities sectors posted
gains in labor productivity with the exception of cable and
other pay TV services. (See table 2.) The largest gains were
in telephone communications (5.0 percent per year); electric
utilities (4.2 percent per year); and gas utilities (4.0 percent
per year). The 1987-97 productivity gain in railroad
transportation was 5.5 percent per year.
Unit labor costs rose over the long term in all of the
industries in the transportation, communications, and utilities
sectors, except railroad transportation and telephone
communications.
Mining
Current trends
Productivity increased in 1998 in three of the five 3-digit
mining industries reported here. Declines in output per hour
were recorded in copper ores (-1.1 percent) and in crushed and
broken stone (-1.9 percent).
Unit labor costs fell 0.4 percent in bituminous coal and
lignite mining and 2.4 percent in copper ores in 1998.
Increases in unit labor costs occurred in crude petroleum and
natural gas (3.2 percent) and crushed and broken stone (9.1
percent).
Long-term trends
Over the 1987-98 period, all of the mining industries
posted productivity gains. The largest increase was in
bituminous coal and lignite mining, 5.9 percent per year.
The two mining industries with the fastest growth in
productivity were the only ones to reduce unit labor costs.
From 1987 to 1998, bituminous coal and lignite mining registered
the largest reduction in unit labor costs, 2.9 percent per year.
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
below.)
Revisions
The data in this news release reflect revisions to
series as published in table 42 of the Monthly Labor
Review; in Unit Labor Costs for Selected Industries, 1987-
97, BLS Report 939, November 1999; and in Productivity by
Industry: Service Sector and Mining, 1997, annual BLS news
release. The productivity series for the gas utilities
industry (SIC 492,3PT) has been revised for the years 1967
to 1997. The revision is due to a change in the underlying
data source. Indexes of productivity by industry have been
revised for the years 1993 to 1997 for most industries in
the retail trade sector. These revisions are due to the
incorporation of annual sales data from the Census Bureau
which were benchmarked to preliminary Census of Retail
Trade data. 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 (202-691-5618); or by
sending a request by e-mail (dipsweb@bls.gov).
Industry output indexes are prepared from basic data
published by various public and private agencies, using the
greatest level of detail available. Data from the Bureau
of the Census, U.S. Department of Commerce, are used
extensively in developing output statistics for
manufacturing, trade, and service-producing industries.
All of the measures for 1998 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.
The reader should note that, occasionally, the year-
to-year movements in productivity measures might 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.
Unit labor cost measurement
The unit labor cost series in this release describe
the cost of labor input required to produce one unit of
output. Unit labor costs are calculated as the ratio of
current dollar labor compensation to constant dollar
output. The indexes of unit labor costs for each industry
are computed by dividing an index of current dollar
compensation by an index of constant dollar output.
Compensation is a measure of the cost to the employer
of securing the services of labor. It is defined as
payroll plus supplemental payments. Payroll includes
salaries, wages, commissions, dismissal pay, bonuses,
vacation and sick leave pay, and compensation in kind.
Supplemental payments are divided into legally required
expenditures and payments for voluntary programs. The
legally required expenditures include employers�
contributions to Social Security, unemployment insurance
taxes, and workers� compensation. Payments for voluntary
programs include all programs not specifically required by
legislation, such as the employer portion of private health
insurance and pension plans.
The indexes of industry output used in measuring labor
productivity and unit labor costs are, wherever possible,
calculated with a Tornqvist formula. This formula
aggregates the growth rates of the various industry
products between two periods using the products� shares in
industry value of production, averaged over the two
periods, as weights.
Published productivity and unit labor cost data for
452 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 222 industries have been withheld from
publication because they do not meet BLS publication
standards. Among the unpublished industries are 32
previously published industries. An additional nine
industries that were previously unpublished are now
published, including computer and office equipment (SIC
357) and electronic components and accessories (SIC 367).
Unpublished data can be requested by phoning 202-691-5618
or by sending e-mail to dipsweb@bls.gov.
Information in this release will be made available to
sensory impaired individuals upon request. Voice phone:
202-691-5200; TDD message referral phone number: 1-800-877-8339.
Table 1. Annual percent change in output per hour and related series: mining and service-producing industries, 1997-98
1998 Annual percent change
SIC Code Industry Employment (1) Output Employee Total Unit
(thousands) per hour (2) Output hours (3) Compensation Labor Costs
Mining
102 Copper ores 15 -1.1 -4.1 -3.0 -6.4 -2.4
104 Gold and silver ores 16 17.2 -0.1 -14.7 -7.5 -7.4
122 Bituminous coal and lignite mining 86 6.1 -1.0 -6.7 -1.4 -0.4
131 Crude petroleum and natural gas 138 2.8 -1.6 -4.3 1.5 3.2
142 Crushed and broken stone 42 -1.9 -1.6 0.3 7.4 9.1
Transportation
4011 Railroad transportation 205 (4) 1.9 (4) 1.4 (4) -0.5 (4) 0.8 (4) -0.6
4213 Trucking, except local 878 -1.8 2.2 4.0 7.4 5.0
431 U.S. Postal Service (5) 867 1.1 2.4 1.3 4.0 1.6
4512,13,22(PTS) Air transportation 682 -2.8 2.5 5.5 6.6 3.9
Communications and Utilities
481 Telephone communications 1007 6.4 12.0 5.3 9.6 -2.1
483 Radio and television broadcasting stations 247 -0.3 2.2 2.5 9.2 6.8
484 Cable and other pay television stations 181 0.4 6.2 5.8 16.1 9.2
491,3(PT) Electric utilities 501 4.5 2.5 -1.9 3.0 0.4
492,3(PT) Gas utilities 158 -3.3 -4.6 -1.4 4.1 9.1
Retail Trade
521 Lumber and other building materials dealers 582 8.8 10.7 1.8 11.0 0.3
523 Paint, glass, and wallpaper stores 68 15.5 10.2 -4.6 0.8 -8.5
525 Hardware stores 173 12.7 6.0 -5.9 -1.7 -7.3
526 Retail nurseries, lawn and garden supply stores 112 6.2 13.1 6.5 9.4 -3.3
531 Department stores 2426 4.8 7.3 2.4 7.7 0.3
533 Variety stores 129 6.0 3.3 -2.5 2.3 -1.0
539 Miscellaneous general merchandise stores 191 12.9 6.8 -5.4 1.5 -4.9
541 Grocery stores 3157 1.1 1.5 0.3 4.2 2.7
542 Meat and fish (seafood) markets 56 6.2 5.0 -1.0 3.8 -1.2
546 Retail bakeries 234 -13.9 -7.0 8.0 13.0 21.5
551 New and used car dealers 1048 0.1 0.3 0.2 6.3 5.9
553 Auto and home supply stores 418 2.6 3.6 0.9 4.1 0.5
554 Gasoline service stations 713 4.5 4.8 0.3 3.5 -1.2
561 Men's and boy's wear stores 85 10.1 8.4 -1.5 5.1 -3.1
562 Women's clothing stores 285 6.2 0.7 -5.2 5.1 4.3
565 Family clothing stores 389 2.5 9.9 7.3 14.4 4.1
566 Shoe stores 222 -5.0 3.1 8.5 10.2 6.9
571 Furniture and homefurnishings stores 606 1.9 5.5 3.6 10.3 4.6
572 Household appliance stores 74 18.6 5.3 -11.3 -1.6 -6.5
573 Radio, television, computer, and music stores 473 20.4 25.6 4.3 14.4 -8.9
581 Eating and drinking places 7999 0.6 2.6 1.9 7.4 4.7
591 Drug and proprietary stores 656 2.0 5.2 3.1 7.3 2.0
592 Liquor stores 139 4.6 2.5 -2.0 2.9 0.4
593 Used merchandise stores 182 14.8 12.8 -1.7 5.1 -6.8
594 Miscellaneous shopping goods stores 1155 6.3 6.6 0.3 7.5 0.9
596 Nonstore retailers 553 9.2 9.2 -0.1 8.5 -0.6
598 Fuel dealers 99 -1.3 -4.8 -3.6 1.6 6.7
599 Retail stores, n.e.c. 671 7.0 9.3 2.2 6.0 -3.1
Finance and services
602 Commercial banks 1468 0.0 1.5 1.5 10.2 8.6
701 Hotels and motels 1744 0.8 2.4 1.6 7.5 4.9
721 Laundry, cleaning, and garment services 527 5.1 2.6 -2.4 2.9 0.3
722 Photographic studios, portrait 77 14.7 3.5 -9.8 4.2 0.7
723 Beauty shops 726 0.8 3.5 2.6 5.4 1.8
724 Barber shops 50 2.7 -0.9 -3.5 2.4 3.3
726 Funeral services and crematories 102 5.6 3.4 -2.1 1.3 -2.0
753 Automotive repair shops 899 5.2 4.6 -0.7 3.5 -1.0
783 Motion picture theaters 138 1.5 7.3 5.7 11.1 3.5
(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 SICs 531, 551, 602, and 783. Output per hour of
all persons is used for all other trade and services industries. All persons includes self-employed and unpaid family workers as well as employees.
In SIC 4213 and 4512,13,22(pts), output per employee hour is based on output per employee with the assumption of constant average weekly hours.
(3) Employee hours are measured in mining, transportation, communications, and in SICs 531, 551, 602, and 783. Hours of all
persons are used for all other trade and service industries. All persons includes self-employed and unpaid family workers as well as employees.
In SIC 4213 and 4512,13,22(pts), employee hours are based on employees with the assumption of constant average weekly hours.
(4) 1996-97.
(5) Employee hours in SIC 431 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 431 reflect the Federal fiscal year.
Table 2. Average annual percent change in output per hour and related series: mining and service-producing industries, 1987-98
1998 Average annual percent change
SIC Code Industry Employment (1) Output Employee Total Unit
(thousands) per hour (2) Output hours (3) Compensation Labor Costs
Mining
102 Copper ores 15 1.5 3.4 1.9 5.7 2.2
104 Gold and silver ores 16 5.8 7.5 1.6 6.7 -0.7
122 Bituminous coal and lignite mining 86 5.9 1.0 -4.6 -1.9 -2.9
131 Crude petroleum and natural gas 138 2.3 -0.9 -3.2 2.0 2.9
142 Crushed and broken stone 42 1.0 1.8 0.8 4.7 2.9
Transportation
4011 Railroad transportation 205 (4) 5.5 (4) 2.8 (4) -2.5 (4) 0.3 (4) -2.5
4213 Trucking, except local 878 2.4 3.3 0.9 5.4 2.1
431 U.S. Postal Service (5) 867 0.8 2.0 1.1 5.1 3.1
4512,13,22(PTS) Air transportation 682 0.7 4.2 3.4 5.4 1.2
Communications and Utilities
481 Telephone communications 1007 5.0 6.3 1.2 5.3 -0.9
483 Radio and television broadcasting stations 247 0.1 0.9 0.8 5.1 4.1
484 Cable and other pay television stations 181 -1.2 4.0 5.2 10.0 5.8
491,3(PT) Electric utilities 501 4.2 2.5 -1.7 3.0 0.5
492,3(PT) Gas utilities 158 4.0 1.8 -2.1 2.4 0.6
Retail Trade
521 Lumber and other building materials dealers 582 2.6 5.2 2.5 6.2 1.0
523 Paint, glass, and wallpaper stores 68 4.7 3.3 -1.4 2.8 -0.5
525 Hardware stores 173 2.1 1.3 -0.7 3.0 1.6
526 Retail nurseries, lawn and garden supply stores 112 2.8 3.6 0.7 4.7 1.1
531 Department stores 2426 2.4 5.0 2.6 4.9 -0.1
533 Variety stores 129 9.2 2.8 -5.8 -2.0 -4.7
539 Miscellaneous general merchandise stores 191 6.0 5.1 -0.8 5.8 0.7
541 Grocery stores 3157 -0.9 0.2 1.1 4.2 4.0
542 Meat and fish (seafood) markets 56 -1.0 -2.9 -2.0 0.7 3.7
546 Retail bakeries 234 -3.8 -1.7 2.2 5.8 7.6
551 New and used car dealers 1048 0.7 1.8 1.0 5.0 3.2
553 Auto and home supply stores 418 0.6 2.2 1.6 5.1 2.8
554 Gasoline service stations 713 2.5 2.2 -0.2 3.3 1.0
561 Men's and boy's wear stores 85 3.5 0.5 -2.8 0.9 0.3
562 Women's clothing stores 285 4.1 0.3 -3.6 0.7 0.4
565 Family clothing stores 389 3.5 6.9 3.3 7.9 0.9
566 Shoe stores 222 2.9 2.3 -0.6 2.9 0.6
571 Furniture and homefurnishings stores 606 1.8 3.1 1.3 4.9 1.8
572 Household appliance stores 74 5.7 2.8 -2.7 0.5 -2.2
573 Radio, television, computer, and music stores 473 9.0 13.8 4.4 9.8 -3.5
581 Eating and drinking places 7999 0.1 2.1 2.0 6.0 3.9
591 Drug and proprietary stores 656 1.5 2.4 0.9 5.5 3.0
592 Liquor stores 139 1.2 -0.7 -1.9 1.9 2.6
593 Used merchandise stores 182 4.3 8.2 3.7 7.9 -0.3
594 Miscellaneous shopping goods stores 1155 2.5 4.0 1.5 5.6 1.5
596 Nonstore retailers 553 6.2 7.8 1.5 6.8 -0.9
598 Fuel dealers 99 1.0 -0.3 -1.4 2.4 2.7
599 Retail stores, n.e.c. 671 4.2 6.2 1.9 5.3 -0.8
Finance and services
602 Commercial banks 1468 2.6 2.0 -0.6 5.2 3.2
701 Hotels and motels 1744 0.8 2.5 1.8 6.7 4.1
721 Laundry, cleaning, and garment services 527 1.2 1.7 0.6 4.2 2.5
722 Photographic studios, portrait 77 4.0 5.7 1.6 5.9 0.2
723 Beauty shops 726 0.7 2.3 1.5 5.6 3.3
724 Barber shops 50 3.9 -0.7 -4.5 -1.6 -0.9
726 Funeral services and crematories 102 0.6 1.5 0.9 5.6 4.1
753 Automotive repair shops 899 1.8 3.3 1.5 5.4 2.0
783 Motion picture theaters 138 0.1 2.6 2.4 5.3 2.7
(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 SICs 531, 551, 602, and 783. Output per hour of
all persons is used for all other trade and services industries. All persons includes self-employed and unpaid family workers as well as employees.
In SIC 4213 and 4512,13,22(pts), output per employee hour is based on output per employee with the assumption of constant average weekly hours.
(3) Employee hours are measured in mining, transportation, communications, and in SICs 531, 551, 602, and 783. Hours of all
persons are used for all other trade and service industries. All persons includes self-employed and unpaid family workers as well as employees.
In SIC 4213 and 4512,13,22(pts), employee hours are based on employees with the assumption of constant average weekly hours.
(4) 1987-97.
(5) Employee hours in SIC 431 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 431 reflect the Federal fiscal year.