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Technical USDL 06-1476
information: (202) 691-5618 FOR RELEASE: 10:00 a.m. EDT
Media contact: (202) 691-5902 Tuesday, August 22, 2006
Internet: http://www.bls.gov/lpc/home.htm
PRODUCTIVITY AND COSTS BY INDUSTRY:
WHOLESALE TRADE, RETAIL TRADE,
AND FOOD SERVICES AND DRINKING PLACES, 2005
The Bureau of Labor Statistics of the U.S. Department of Labor reported today on
productivity and costs for wholesale trade, retail trade, and food services and drinking
places. Labor productivity--defined as output per hour--rose 0.6 percent in wholesale
trade, 3.4 percent in retail trade, and 1.6 percent in food services and drinking places in
2005. Output and hours also grew in each of these sectors. Unit labor costs
fell in retail trade, but increased in wholesale trade, and in food services and drinking
places. Productivity advanced in 34 of the 50 detailed industries studied, as output grew
in 47 industries while hours declined in 20 industries. Unit labor costs declined in 26 of
the 50 industries measured. (See tables 1 and 2.)
From 1987 to 2005, labor productivity increased at an average annual rate of 3.5
percent in wholesale trade, 3.3 percent in retail trade, and 0.7 percent in food services and
drinking places, as output and hours rose in each. Unit labor costs fell in
retail trade, but rose in wholesale trade and in food services and drinking places during
this period. Output and productivity increased in 47 of the 50 detailed industries between
1987 and 2005, while hours fell in 12 industries. Unit labor costs declined in 20
industries.
Measures for industries in other sectors have been published in separate releases
and can be accessed online at: http://www.bls.gov/schedule/archives/all_nr.htm
2004-2005 change
Wholesale trade: Output per hour grew 0.6 percent as output rose 3.1 percent and
hours increased 2.5 percent. Within wholesale trade, overall productivity growth of 3.1
percent for durable merchant wholesalers (NAICS 423) exceeded the 0.6 percent
productivity growth for nondurable merchant wholesalers (NAICS 424), although output
and hours grew in each of these subsectors. However, the fastest productivity growth
among individual wholesale trade industries was recorded for two nondurable wholesale
industries. Productivity rose 10.5 percent in paper and paper products wholesaling
(NAICS 4241) and 10.2 percent in apparel, piece goods, and notions wholesaling (NAICS
4243). In 2005, productivity increased in 10 of the 19 detailed wholesale trade measures
studied. Output grew in 17 of the industries, while hours fell in six. Unit labor costs
declined in six of the 19 detailed wholesale trade industries but rose 2.6 percent in
wholesale trade overall.
Retail trade: Output per hour increased 3.4 percent as output and hours grew 4.3
percent and 0.9 percent, respectively. Labor productivity rose in 21 of the 27 detailed
retail trade industries in 2005. Florists (NAICS 4531) and beer, wine, and liquor stores
(NAICS 4453) registered the highest productivity growth rates--23.8 percent and 13.6
percent, respectively. Productivity also grew in five of the six largest retail trade
industries, those with more than 1.0 million employees. Output increased in all but one
industry, while hours declined in 13 industries. Unit labor costs fell 0.3 percent in the
retail trade sector and declined in 18 of the 27 detailed retail trade industries, led by an
11.8 percent decline in specialty food stores (NAICS 4452).
Food services and drinking places: Output per hour rose 1.6 percent as output
increased 3.5 percent and hours grew 1.9 percent. Three of the four industries in food
services and drinking places recorded productivity gains in 2005. The fastest productivity
growth, 6.4 percent, occurred in drinking places (NAICS 7224). Productivity grew 2.6
percent in full-service restaurants (NAICS 7221), the largest industry in this group.
Output increased in all four industries and hours grew in three industries. Unit labor costs
increased 1.1 percent in the sector, although two of the detailed industries registered
declines in unit labor costs.
Long-term trends
Wholesale trade: Output per hour increased 3.5 percent per year, on average,
between 1987 and 2005, as output increased 4.1 percent and hours rose 0.6 percent. At
the subsector level, average annual productivity growth of 5.5 percent in durable merchant
wholesale trade (NAICS 423) exceeded the 1.3 percent growth in nondurable merchant
wholesale trade (NAICS 424). Labor productivity increased in all but one industry in
wholesale trade; chemicals wholesalers (NAICS 4246) registered a decline of 0.1 percent
per year on average over the period. Output per hour rose most rapidly in commercial
equipment wholesalers (NAICS 4234) and in electric goods wholesalers (NAICS 4236),
advancing at average annual rates of 15.2 percent per year and 9.0 percent per year,
respectively. Output also increased in 18 of the 19 detailed industries in wholesale trade,
while hours declined in six of them. Unit labor costs declined in three of the wholesale
trade industries over the period, but rose 0.8 percent per year for wholesale trade overall.
Retail trade: Output per hour rose an average 3.3 percent per year from 1987 to
2005, as output increased 4.2 percent per year and hours grew 0.9 percent. Output per
hour increased in all but one of the 27 detailed retail trade industries; specialty food stores
(NAICS 4452) recorded no change in productivity over the period. Labor productivity
rose 13.4 percent per year, on average, in electronics and appliance stores (NAICS 443)
and 11.6 percent per year in electronic shopping and mail order houses (NAICS 4541).
Output increased in 26 of the 27 retail industries, while hours increased in 19 industries.
Unit labor costs declined in 17 of the 27 retail trade industries between 1987 and 2005 and
declined by 0.2 percent per year in retail trade overall.
Food services and drinking places: Output per hour increased at an average
annual rate of 0.7 percent per year, as output rose 2.4 percent and hours increased 1.7
percent. The three food services industries recorded growth in labor productivity, output,
and hours from 1987 to 2005. During the same period, labor productivity in drinking
places (NAICS 7224) declined 0.7 percent per year as output declined by 0.4 percent and
hours increased 0.3 percent. Unit labor costs increased in each industry and rose by 3.0
percent per year in food services and drinking places overall.
Technical Note
Output
Industry output is measured as sectoral output, the total value, in real terms, of
goods and services produced for sale outside the industry. Wherever possible, the indexes
of industry output are calculated with a T�rnqvist formula. This formula aggregates the
growth rates of the various industry outputs between two periods, using their relative
shares in industry value of production, averaged over the two periods, as weights.
Industry output measures for the trade and food services and drinking places
industries generally are constructed using data from the economic censuses and annual
surveys of the Bureau of the Census, U.S. Department of Commerce, together with
information on price changes from BLS.
Labor Hours
The industry labor input measures represent the hours of all workers in the
industry. The primary source of data on employment and hours is the BLS Current
Employment Statistics (CES) survey, which provides monthly data on the number of jobs
held by wage and salary workers in nonfarm establishments. The CES survey also
provides data on the average weekly hours of production and nonsupervisory workers in
these establishments.
Data from the Current Population Survey (CPS) are used to supplement the CES
data. The Office of Productivity and Technology (OPT) estimates the average weekly
hours of supervisory and nonproduction workers by industry using data from the CPS
together with the CES data. CPS data are also used to estimate the employment and hours
of self-employed and unpaid family workers in the trade and food services and drinking
places industries. The hours of nonsupervisory workers, supervisory workers, and self-
employed and unpaid family workers are treated as homogeneous and are directly
aggregated.
Labor Productivity
The industry labor productivity measures 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. Industry output per hour
indexes are prepared from data published by various public and private agencies, using the
greatest level of industry detail available.
Although the labor productivity 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.
Year-to-year movements in productivity measures for some industries might be
erratic, particularly in the smaller industries. The annual changes in an industry�s output
and use of labor may reflect cyclical changes in the economy rather than long-term trends.
Also, annual productivity indexes 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 Costs
The unit labor cost series represents the cost of labor input required to produce one
unit of output. The indexes of unit labor costs for each industry are computed by dividing
an index of industry labor compensation by an index of industry output. Compensation,
defined as payroll plus supplemental payments, is a measure of the cost to the employer of
securing the services of labor. Payroll includes salaries, wages, commissions, dismissal
pay, bonuses, vacation and sick leave pay, and compensation in kind. Supplemental
payments include legally required expenditures and payments for voluntary programs.
The legally required portion consists primarily of Federal old age and survivors�
insurance, unemployment compensation, 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.
Notes
The measures in this news release replace the wholesale trade, retail trade, and
food services and drinking places series published in table 51 of the Monthly Labor
Review and in the news release Productivity and Costs by Industry: Wholesale Trade,
Retail Trade, and Food Services and Drinking Places, 2004 (released September 27,
2005), and may reflect revisions to those series. All of the measures for 2005 in this
release are preliminary and subject to revision.
Estimates of employment and hours of self-employed and unpaid family workers
for all years have been revised to more accurately account for employment and hours of
proprietors in secondary jobs. Previously, a proprietor�s hours worked at secondary jobs
were attributed to the industry of the proprietor�s primary job. Hours worked at secondary
jobs are now included in a proprietor�s hours only if the person is a proprietor in the
secondary job, and these hours are classified in the industry of the secondary job.
Published productivity and unit labor cost indexes for selected NAICS industries,
including the industries covered in this report, can be accessed electronically by visiting
the Labor Productivity and Costs Web site: http://www.bls.gov/lpc/home.htm. While
the index numbers and rates of change reported by BLS in this news release are rounded
to one decimal place, all percent changes in this release and on the BLS web site are
calculated using index numbers to three decimal places.
Measures for selected detailed industries are available upon request by calling the
Division of Industry Productivity Studies (202-691-5618) or by sending a request by e-
mail: dipsweb@bls.gov. Data on industry employment, annual hours, the net value of
production, and the implicit price deflator for output also are available upon request.
Material in this report is in the public domain and, with appropriate credit, may be
used without permission. Information in this report will be made available to sensory-
impaired individuals upon request. Voice phone: 202-691-5618; TDD message referral
phone number: 1-800-877-8339.
Table 1. Annual percent change in output per hour and related series, 1987-2005 and 2004-2005
Annual percent change, Annual percent change,
1987-2005 2004-2005
2005 ----------------------------- -------------------------------
NAICS Industry Employment Output Output
code (thousands) per hour Output Hours per hour Output Hours
Wholesale Trade
42 Wholesale trade 5987 3.5 4.1 0.6 0.6 3.1 2.5
423 Durable goods 3109 5.5 6.0 0.4 3.1 5.0 1.8
4231 Motor vehicles and parts 361 4.1 4.0 -0.1 6.3 4.8 -1.3
4232 Furniture and furnishings 120 2.6 2.7 0.1 -2.0 0.7 2.8
4233 Lumber and construction supplies 261 1.0 2.9 1.8 -5.3 0.8 6.4
4234 Commercial equipment 650 15.2 15.7 0.4 8.1 7.7 -0.4
4235 Metals and minerals 125 0.2 0.4 0.2 -3.6 1.9 5.7
4236 Electric goods 352 9.0 8.9 -0.1 3.6 4.4 0.7
4237 Hardware and plumbing 251 1.4 2.6 1.2 -1.6 3.5 5.3
4238 Machinery and supplies 681 2.6 2.6 0.0 5.6 6.9 1.3
4239 Miscellaneous durable goods 308 2.3 3.1 0.7 0.7 5.2 4.5
424 Nondurable goods 2132 1.3 1.6 0.3 0.6 0.9 0.3
4241 Paper and paper products 159 3.0 2.3 -0.6 10.5 3.8 -6.1
4242 Druggists' goods 223 2.6 5.1 2.5 5.3 5.9 0.5
4243 Apparel and piece goods 161 2.9 2.6 -0.3 10.2 6.3 -3.5
4244 Grocery and related products 734 0.8 1.7 0.9 -1.7 0.5 2.2
4245 Farm product raw materials 80 1.2 -1.4 -2.6 -7.8 -2.3 6.0
4246 Chemicals 136 -0.1 0.9 1.1 -2.2 2.3 4.6
4247 Petroleum 103 3.4 0.3 -3.0 -8.5 -8.7 -0.2
4248 Alcoholic beverages 149 0.5 2.0 1.5 5.7 6.6 0.9
4249 Miscellaneous nondurable goods 387 0.7 0.7 0.0 5.8 3.3 -2.4
425 Electronic markets and agents and brokers 745 2.4 5.1 2.7 -8.6 2.7 12.4
Retail Trade
44-45 Retail trade 16461 3.3 4.2 0.9 3.4 4.3 0.9
441 Motor vehicle and parts dealers 2024 2.8 4.0 1.2 0.5 1.3 0.7
4411 Automobile dealers 1319 2.5 3.8 1.3 -1.0 -0.6 0.5
4412 Other motor vehicle dealers 186 4.3 7.2 2.8 5.4 18.4 12.3
4413 Auto parts, accessories, and tire stores 519 2.8 3.4 0.6 7.5 5.1 -2.2
442 Furniture and home furnishings stores 640 3.9 5.2 1.2 1.7 5.9 4.2
4421 Furniture stores 324 3.3 4.5 1.1 -0.7 5.4 6.2
4422 Home furnishings stores 316 4.7 6.1 1.3 4.2 6.5 2.1
443 Electronics and appliance stores 570 13.4 15.4 1.7 9.1 15.5 5.9
444 Building material and garden supply stores 1346 3.3 5.3 2.0 0.4 6.6 6.2
4441 Building material and supplies dealers 1174 3.1 5.5 2.3 0.5 6.5 5.9
4442 Lawn and garden equipment and supplies stores 172 4.2 4.2 0.0 -0.6 7.8 8.4
445 Food and beverage stores 2922 0.4 0.3 -0.1 5.3 2.6 -2.5
4451 Grocery stores 2503 0.3 0.3 0.0 4.5 2.1 -2.3
4452 Specialty food stores 268 0.0 0.3 0.3 13.5 10.7 -2.5
4453 Beer, wine and liquor stores 152 2.5 0.6 -1.8 13.6 5.7 -7.0
446 Health and personal care stores 999 2.6 3.9 1.3 -0.9 2.5 3.5
447 Gasoline stations 892 2.4 1.9 -0.5 5.9 3.6 -2.2
448 Clothing and clothing accessories stores 1527 4.5 4.9 0.4 5.9 6.9 0.9
4481 Clothing stores 1129 4.7 5.4 0.7 9.0 8.5 -0.4
4482 Shoe stores 183 3.9 2.6 -1.2 3.7 1.4 -2.1
4483 Jewelry, luggage, and leather goods stores 216 4.3 4.8 0.5 -5.1 3.7 9.2
451 Sporting goods, hobby, book, and music stores 720 4.5 4.9 0.4 8.7 3.4 -4.8
4511 Sporting goods and musical instrument stores 501 5.1 5.4 0.3 7.9 4.3 -3.3
4512 Book, periodical, and music stores 218 3.2 4.0 0.7 10.8 1.6 -8.3
452 General merchandise stores 2951 3.9 5.6 1.7 3.8 5.9 1.9
4521 Department stores 1620 1.3 2.7 1.4 0.6 0.2 -0.4
4529 Other general merchandise stores 1331 7.6 9.6 1.9 5.5 10.2 4.4
453 Miscellaneous store retailers 1117 4.4 5.1 0.7 8.3 5.8 -2.3
4531 Florists 127 2.8 0.8 -1.9 23.8 8.8 -12.1
4532 Office supplies, stationery and gift stores 443 6.2 6.8 0.5 5.5 4.5 -1.0
4533 Used merchandise stores 185 5.5 6.6 1.1 8.0 8.9 0.9
4539 Other miscellaneous store retailers 362 2.4 4.3 1.8 7.3 5.7 -1.5
454 Nonstore retailers 752 8.6 9.4 0.8 2.8 8.8 5.8
4541 Electronic shopping and mail-order houses 311 11.6 16.1 4.0 4.2 12.3 7.8
4542 Vending machine operators 69 0.9 -0.9 -1.8 2.1 4.1 2.0
4543 Direct selling establishments 373 3.4 2.7 -0.7 -2.3 2.3 4.8
Food Services and Drinking Places
722 Food services and drinking places 9336 0.7 2.4 1.7 1.6 3.5 1.9
7221 Full-service restaurants 4359 0.9 2.7 1.8 2.6 3.9 1.3
7222 Limited-service eating places 3947 0.6 2.5 2.0 -0.1 3.3 3.5
7223 Special food services 651 1.8 2.6 0.8 3.4 4.7 1.3
7224 Drinking places, alcoholic beverages 380 -0.7 -0.4 0.3 6.4 0.1 -5.9
Table 2. Annual percent change in total compensation, output, and unit labor costs, 1987-2005 and 2004-2005
Annual percent change, 1987-2005 Annual percent change, 2004-2005
2005 ------------------------------------- -------------------------------------
NAICS Industry Employment Total Unit labor Total Unit labor
code (thousands) compensation Output costs compensation Output costs
Wholesale Trade
42 Wholesale trade 5987 4.9 4.1 0.8 5.8 3.1 2.6
423 Durable goods 3109 5.0 6.0 -0.9 5.2 5.0 0.2
4231 Motor vehicles and parts 361 4.4 4.0 0.4 6.5 4.8 1.6
4232 Furniture and furnishings 120 5.1 2.7 2.3 2.3 0.7 1.5
4233 Lumber and construction supplies 261 4.5 2.9 1.6 7.9 0.8 7.0
4234 Commercial equipment 650 5.3 15.7 -9.1 2.5 7.7 -4.8
4235 Metals and minerals 125 4.8 0.4 4.4 8.9 1.9 6.9
4236 Electric goods 352 5.1 8.9 -3.5 1.1 4.4 -3.2
4237 Hardware and plumbing 251 5.3 2.6 2.6 9.9 3.5 6.1
4238 Machinery and supplies 681 4.6 2.6 1.9 6.9 6.9 0.0
4239 Miscellaneous durable goods 308 5.6 3.1 2.5 9.2 5.2 3.8
424 Nondurable goods 2132 5.1 1.6 3.5 4.3 0.9 3.4
4241 Paper and paper products 159 4.2 2.3 1.8 4.8 3.8 1.0
4242 Druggists' goods 223 11.1 5.1 5.7 2.3 5.9 -3.4
4243 Apparel and piece goods 161 4.3 2.6 1.7 5.0 6.3 -1.2
4244 Grocery and related products 734 4.9 1.7 3.2 4.8 0.5 4.3
4245 Farm product raw materials 80 3.5 -1.4 5.0 12.5 -2.3 15.2
4246 Chemicals 136 4.9 0.9 3.9 5.3 2.3 2.9
4247 Petroleum 103 2.7 0.3 2.4 5.9 -8.7 16.0
4248 Alcoholic beverages 149 4.9 2.0 2.9 4.7 6.6 -1.8
4249 Miscellaneous nondurable goods 387 3.7 0.7 3.0 2.1 3.3 -1.2
425 Electronic markets and agents and brokers 745 4.2 5.1 -0.9 12.9 2.7 9.9
Retail Trade
44-45 Retail trade 16461 4.1 4.2 -0.2 4.1 4.3 -0.3
441 Motor vehicle and parts dealers 2024 4.5 4.0 0.5 3.5 1.3 2.2
4411 Automobile dealers 1319 4.6 3.8 0.7 2.9 -0.6 3.5
4412 Other motor vehicle dealers 186 6.9 7.2 -0.3 12.7 18.4 -4.8
4413 Auto parts, accessories, and tire stores 519 3.3 3.4 -0.1 2.1 5.1 -2.9
442 Furniture and home furnishings stores 640 4.5 5.2 -0.6 5.1 5.9 -0.8
4421 Furniture stores 324 4.1 4.5 -0.3 4.8 5.4 -0.6
4422 Home furnishings stores 316 5.1 6.1 -1.0 5.4 6.5 -1.0
443 Electronics and appliance stores 570 4.9 15.4 -9.1 3.4 15.5 -10.5
444 Building material and garden supply stores 1346 4.7 5.3 -0.6 8.2 6.6 1.5
4441 Building material and supplies dealers 1174 5.0 5.5 -0.5 7.8 6.5 1.3
4442 Lawn and garden equipment and supplies stores 172 3.2 4.2 -1.0 11.4 7.8 3.3
445 Food and beverage stores 2922 3.4 0.3 3.0 1.0 2.6 -1.6
4451 Grocery stores 2503 3.5 0.3 3.2 1.5 2.1 -0.6
4452 Specialty food stores 268 2.6 0.3 2.4 -2.4 10.7 -11.8
4453 Beer, wine and liquor stores 152 2.5 0.6 1.9 0.4 5.7 -5.0
446 Health and personal care stores 999 5.2 3.9 1.3 4.8 2.5 2.2
447 Gasoline stations 892 2.6 1.9 0.7 1.5 3.6 -2.0
448 Clothing and clothing accessories stores 1527 3.4 4.9 -1.4 4.7 6.9 -2.1
4481 Clothing stores 1129 3.8 5.4 -1.5 4.8 8.5 -3.4
4482 Shoe stores 183 1.7 2.6 -0.9 -2.5 1.4 -3.9
4483 Jewelry, luggage, and leather goods stores 216 3.3 4.8 -1.4 8.7 3.7 4.9
451 Sporting goods, hobby, book, and music stores 720 4.3 4.9 -0.6 -2.7 3.4 -5.9
4511 Sporting goods and musical instrument stores 501 4.3 5.4 -1.0 -1.7 4.3 -5.8
4512 Book, periodical, and music stores 218 4.2 4.0 0.2 -5.0 1.6 -6.5
452 General merchandise stores 2951 4.1 5.6 -1.4 5.5 5.9 -0.3
4521 Department stores 1620 3.2 2.7 0.5 1.5 0.2 1.3
4529 Other general merchandise stores 1331 5.4 9.6 -3.8 10.7 10.2 0.4
453 Miscellaneous store retailers 1117 3.1 5.1 -1.9 1.8 5.8 -3.7
4531 Florists 127 1.1 0.8 0.3 -3.4 8.8 -11.2
4532 Office supplies, stationery and gift stores 443 3.7 6.8 -2.9 -0.3 4.5 -4.6
4533 Used merchandise stores 185 4.1 6.6 -2.4 5.6 8.9 -3.0
4539 Other miscellaneous store retailers 362 2.8 4.3 -1.4 4.1 5.7 -1.5
454 Nonstore retailers 752 4.0 9.4 -4.9 11.2 8.8 2.2
4541 Electronic shopping and mail-order houses 311 8.0 16.1 -7.0 18.8 12.3 5.8
4542 Vending machine operators 69 1.4 -0.9 2.3 3.7 4.1 -0.4
4543 Direct selling establishments 373 1.8 2.7 -0.8 4.8 2.3 2.5
Food Services and Drinking Places
722 Food services and drinking places 9336 5.5 2.4 3.0 4.7 3.5 1.1
7221 Full-service restaurants 4359 6.6 2.7 3.8 5.6 3.9 1.7
7222 Limited-service eating places 3947 5.3 2.5 2.7 5.3 3.3 1.9
7223 Special food services 651 3.4 2.6 0.8 0.2 4.7 -4.3
7224 Drinking places, alcoholic beverages 380 2.2 -0.4 2.7 -1.0 0.1 -1.1