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Internet address: http://stats.bls.gov/mprhome.htm Historical, technical USDL 00-267 information: (202) 691-5606 For Release: 10:00 AM EST Media contact: (202) 691-5902 Thursday September 21, 2000 MULTIFACTOR PRODUCTIVITY TRENDS, 1998 Private Business, Private Nonfarm Business, and Manufacturing The Bureau of Labor Statistics of the U.S. Department of Labor today reported multifactor productivity data--output per unit of combined labor and capital inputs--for 1998. Multifactor productivity differs from the labor productivity (output per hour) measures that are published quarterly by BLS. Multifactor productivity, unlike labor productivity, requires information on capital services and other data that are not available on a quarterly basis. Multifactor productivity is designed to measure the joint influences on economic growth of technological change, efficiency improvements, returns to scale, reallocation of resources, and other factors. In the most recent year available, multifactor productivity in the private business and private nonfarm business sectors changed at the following percentage rates: Private business Private nonfarm business 1997-98 1.5 1.5 Multifactor productivity increased for the seventh consecutive year in both the private business and private nonfarm business sectors. The 1998 annual changes are summarized in table A; further detail and historical measures are shown in tables 1 through 8. This news release incorporates new data and concepts introduced in the comprehensive revision to the National Income and Product Accounts published in October, 1999 by the Bureau of Economic Analysis of the Department of Commerce. Measures of output and capital measures have been revised to include computer software. Table B and Table 7 of this release have been expanded to provide additional data on information processing equipment and software. See page 10 for additional information. Chart 1 shows the annual indexes of multifactor productivity, output per hour worked, and output per unit of capital services for 1948-1998 for the private business sector. Output per hour historically has grown at a faster rate than multifactor productivity. This reflects changes in the contribution of capital intensity (the capital-hours ratio) and changes in the contribution of labor composition, factors that are controlled for in the multifactor productivity measures. However, the short-term fluctuations of multifactor productivity and output per hour generally move in the same direction. Table A. Productivity and related data, percent changes,1997-98 Private Private Business1 Nonfarm Business1 Productivity Multifactor Productivity2 1.5 Output per hour of all persons 2.7 Output per unit of capital services -0.3 Output Inputs Labor input3 Capital services Combined units of labor and capital inputs4 Analytic ratio: Capital services per hour of all persons 5.1 2.6 5.4 1.5 2.7 -0.4 5.2 3.5 3.1 2.7 5.6 3.7 3.1 1. Excludes government enterprises. 2. Output per unit of combined labor and capital inputs. 3. Index of hours worked; hours worked by education and experience group are weighted by each group's share of labor compensation. 4. Labor input index combined with capital service input index, weighted by labor's and capital's shares of nominal output. Private business and private nonfarm business For private business and private nonfarm business, the change in multifactor productivity reflects the difference between the change in real gross domestic product for the sector and the change in labor and capital inputs engaged in the production of this output. The output measures for private business and private nonfarm business are similar to the indexes of output for business and nonfarm business used in the quarterly labor productivity measures. The difference is that the output of government enterprises is omitted. A change in multifactor productivity reflects the change in output that cannot be accounted for by the change in combined inputs of labor and capital. In contrast, a change in labor productivity reflects the change in output that cannot be accounted for by the change in hours of all persons engaged in production. Changes in 1997-98 Private business sector Multifactor productivity rose 1.5 percent in 1998 or at about the same rate as in 1996 and 1997 as revised. Multifactor productivity has not declined since the recession year of 1991. The multifactor productivity gain in 1998 reflected a 5.1 percent increase in output and a 3.5 percent increase in the combined inputs of capital and labor. Output growth nearly matched the 1998 rate and it was the second fastest growth rate since 1984 (tables 1 and 4). In 1998, for the fourth year in a row, capital services grew faster than labor input. Capital services accelerated to a growth rate of 5.4 percent -- the steepest gain since 1974. Equipment and inventories grew more rapidly than the other asset categories (table 7). Equipment posted its largest growth, 9.5 percent, since 1949. Labor input continued to grow faster than average for the 1990s, although the 2.6 percent increase was more than a percentage point slower than in 1997. Labor input in 1998 followed the usual pattern of small declines in the work week and modest increases in the distribution of workers by educational attainment and work experience. As a result, employment, which rose 2.4 percent, accounted for most of the increase in labor input. Labor productivity (output per hour worked) increased 2.7 percent in 1998. Capital productivity (output per unit of capital services) fell 0.3 percent. Capital services per hour jumped 3.1 percent, the largest gain since 1991. Private nonfarm business Multifactor productivity in the private nonfarm business sector increased by 1.5 percent in 1998. This was the seventh consecutive year of growth. Output rose at its fastest rate since 1984, 5.2 percent. The growth of combined units of capital and labor inputs, 3.7 percent, was slower than in 1997, but generally faster than in the 1990s. Labor input grew 2.7 percent; most of this growth was due to increased employment. Capital services continued to accelerate as it jumped 5.6 percent, the largest gain since 1974. The fastest growing components of capital services were equipment and of inventories (table 8). Equipment posted its steepest gain since 1980. Labor productivity grew 2.7 percent in 1998. Capital productivity dipped 0.4 percent. In 1998, capital services per hour increased for the fourth straight year, posting a 3.1 percent gain. Long-term trends in private business and private nonfarm business Labor productivity growth (output per hour) differs from multifactor productivity (output per unit of combined capital and labor inputs) in the treatment of both capital and hours. Labor productivity measures do not explicitly account for the effects of capital or shifts in the composition of labor on output growth. As a result, changes in capital intensity (the capital-hours ratio) and labor composition can influence labor productivity growth. However, multifactor productivity (MFP) treats capital as an explicit factor of production, and so it is computed net of changes in capital intensity. In addition, BLS measures labor input as the combined effect of changes in hours at work and shifts in the educational attainment and work experience of the work force. Therefore, MFP is computed net of changes in labor composition as well. Long-term labor productivity growth can be viewed as the sum of three components: multifactor productivity growth, the contribution of increased capital intensity, and the contribution of shifts in labor composition (table B and chart 2). The contribution of capital intensity equals the change in the capital-hours ratio multiplied by capital's share of total payments to inputs. The contribution of labor composition equals the difference between the growth rate of labor input and the growth rate of hours multiplied by labor's share of total payments. Historically, capital's share has been slightly less than one-third of the total payments. From 1948 to 1998, output per hour grew at an annual rate of 2.5 percent in private business (table B). Of the 2.5 percent growth rate in labor productivity, 1.4 percent can be attributed to increases in multifactor productivity, 0.8 percent to the contribution of capital intensity, and 0.2 percent to changes in labor composition. Information processing equipment and software is composed of computers and related equipment, communications equipment, instruments and photocopying equipment and software. Investment in these forms of capital were insubstantial prior to 1979 and so the 0.3 percent per year average contribution may not be indicative of trends over the entire period. Information processing capital accounted for almost half of the capital effects for the entire period. Table B. Compound average annual rates of growth in output per hour of all persons and the contributions of capital intensity, labor composition, and multifactor productivity, by major sector, 1948 to 1998 (percent per year) Private business1 1948-98 1948-73 1973-79 1979-90 1990-95 1995-98 Output per hour of all persons 2.5 Contribution of capital intensity2 3.3 1.3 1.6 1.5 2.5 0.8 1.0 0.7 0.7 0.5 0.8 Contribution of 0.3 information proecessing equipment and software3 0.1 0.3 0.5 0.4 0.8 Contribution of all other capital services Contribution of labor composition4 0.6 0.2 0.9 0.2 0.5 0.0 0.3 0.3 0.1 0.4 0.0 0.3 Multifactor productivity5 1.4 2.1 0.6 0.5 0.6 1.4 Private nonfarm business1 Output per hour of all persons 2.2 Contribution of capital intensity2 2.9 1.2 1.4 1.6 2.3 0.8 0.9 0.7 0.8 0.5 0.8 Contribution of 0.3 information processing equipment and software3 0.1 0.3 0.5 0.4 0.8 Contribution of all other capital services Contribution of labor composition4 0.5 0.2 0.7 0.2 0.5 0.0 0.3 0.3 0.1 0.4 0.0 0.3 Multifactor productivity5 1.2 1.9 0.4 0.3 0.6 1.3 Contribution of R&D to multifactor productivity 0.2 0.2 0.1 0.2 0.2 0.2 1. 2. 3. 4. 5. Excludes government enterprises. Growth rate in capital services per hour times capital's share of current dollar costs. Growth rate of information processing equipment and software times its share of total costs. Growth rate of labor composition (the growth rate of labor input less the growth rate of the hours of all persons) times labor's share of current dollar costs. Output per unit of combined labor and capital inputs. Note: The sum of multifactor productivity and the contributions may not equal labor productivity due to independent rounding. From 1948 to 1973, multifactor productivity grew at an average annual rate of 2.1 percent in private business. These rates, combined with the 1.0 percent contribution of capital intensity and the 0.2 percent contribution of labor composition, resulted in labor productivity growth rates of 3.3 percent in private business. Chart 2 shows the post-1973 slowdown. During the period 1973 to 1979, gains in multifactor productivity slowed to only 0.6 percent per year in private business. At the same time, the average annual contribution of capital intensity to labor productivity growth decreased to 0.7 percent, and labor composition made no contribution. Labor productivity, therefore, increased only 1.3 percent per year from 1973 to 1979. Between 1979 and 1990, labor productivity increased slightly faster than in the 1973-79 period, but labor productivity growth still remained slow. All of the faster labor productivity growth was the result of changes in the composition of the work force while multifactor productivity growth and the contribution of capital services were essentially unchanged from the earlier period. Information processing capital began to play an increasingly important role during this period. These forms of capital contributed 0.5 percent per year to labor productivity growth or nearly three-quarters of the contribution of all capital services. During the 1990-95 period, labor productivity advanced at an annual rate of 1.5 percent in the private business sector which was 0.1 percent less than in the 1979-90 period. The growth rate of multifactor productivity and the contribution of labor composition each edged up 0.1 percent per year during the 1990-95 period. However, the slower contribution from capital services offset these sources of faster growth. A reversal in the role of information processing capital and other capital was nearly completed by the 1990-95 period. During this period, information processing equipment contributed 0.4 percent per year to labor productivity growth or 80 percent of the contribution of all capital. Information processing equipment made almost no contribution before 1973. Conversely, other forms of capital contributed 0.9 percent per year to labor productivity before 1973, but in the 1990-95 period other forms of capital services contribute just 0.1 percent per year. Because aggregate capital intensity did not grow more rapidly after 1990, this reversal can be viewed as substitution of information processing equipment for other forms of capital. The length of the current economic expansion is unprecedented. One unusual feature of the expansion is that productivity growth has accelerated as the expansion has continued. During the 1995-98 period, output per hour grew 2.5 percent in private business or 1 percentage point faster than during the 1990-95 period. Most of faster growth can be attributed to faster multifactor productivity growth which more than doubled from 0.6 percent to 1.4 percent per year. Larger contributions from capital services account for the remainder of the increase. Information processing equipment accounted for all of the growth in capital intensity as other forms of capital grew no faster than hours. The contribution of labor composition slowed to 0.3 percent per year from 0.4 percent in the previous period. The trends of the various measures in the private nonfarm business sector were similar to those in the private business sector in each period. So, the pattern of the productivity slowdown after 1973 and modest recovery after 1979 seen in private business can also be seen in the private nonfarm business sector. Contribution of R&D to multifactor productivity in private nonfarm business While MFP reflects many influences, it is generally believed that technological change is one of the primary contributors. For private nonfarm business, BLS also reports estimates of the direct effects of firms' spending for research and development (R&D) on MFP growth within their own industries. Because many people associate R&D spending and the resulting technological improvements with productivity, BLS has not adjusted MFP to exclude the effects of R&D. The contribution of R&D averaged 0.2 percent per year for the entire 1948-98 period, accounting for more than ten percent of multifactor productivity growth (tableB). The contribution of R&D was 0.2 percent during the 1948-73 period. It slowed to 0.1 percent during the 1973-79 period, and returned to 0.2 percent for the periods 1979-90, 1990-95 and 1995-98. Manufacturing The BLS multifactor productivity measures (MFP) for manufacturing differ in several ways from those for private business and private nonfarm business in their treatment of labor input, output, and classes of factor inputs. First, the manufacturing measure of labor input is a direct aggregate of hours. This is in contrast to the major sector measures for which estimates of the effects of changing labor composition have been developed. In addition, the output concept used for the data on multifactor productivity in manufacturing is "sectoral output." Sectoral output is similar to gross output, but excludes shipments from one manufacturing establishment to another. The resulting multifactor productivity measure compares what is produced in the manufacturing sector for use outside of manufacturing with the inputs used in the manufacturing process obtained from outside of manufacturing. The comparison excludes flows between manufacturing establishments from measures of both output and inputs. Finally, MFP in manufacturing compares "sectoral output" to three classes of inputs: 1) hours at work of labor employed within manufacturing; 2) capital services employed by manufacturing establishments; and 3) purchases of energy, materials, and business services from outside of manufacturing (intermediates). In manufacturing, intermediates are the largest input in terms of costs. Furthermore, research has shown that substitution among inputs, including intermediates, affects productivity change. It is therefore important to include intermediates in productivity measures at the level of manufacturing. In contrast, the more aggregate productivity measures in this release compare "value-added" output with two classes of inputs, capital and labor. Because of all these differences in methods, productivity change in manufacturing cannot be directly compared with changes in private business or private nonfarm business. Manufacturing productivity in 1998 and historical trends Multifactor productivity in manufacturing rose 3.1 percent in 1998 (table C). While multifactor productivity growth slowed slightly from the 3.4 percent rate recorded for 1997, the increase was still much larger than the average over the postwar period (tables 3 and 6). In 1998, the 3.1 percent gain in multifactor productivity was the result of a 5.9 percent advance in sector output less a 2.7 percent increase in combined inputs. Output growth was the most rapid since 1984. The pace of growth of combined inputs was faster than in the previous three years. After declining 3.0 percent in 1997, energy use rose 5.1 percent in 1998. Energy input growth increased at its fastest pace in more than a decade. Inputs of materials, which declined 0.1 percent in 1997, jumped 5.6 percent in 1998. Capital services continued to accelerate, posting a 5.0 advance, the largest increase since 1975. Hours declined 0.3 percent, offsetting some of the 1.7 percent increase in 1997. Multifactor productivity grew 1.2 percent annually between 1949 and 1998. Sectoral output increased at a 3.3 percent annual rate, and combined inputs rose 2.1 percent per year (table C). Unlike the private business and private nonfarm business sectors, the productivity slowdown in manufacturing was confined to the 1973-79 period. Multifactor productivity, which had been growing 1.5 percent annually prior to 1973, fell 0.6 percent per year between 1973 and 1979. Since the growth rate of combined inputs was slower in almost all previous periods, the decline in the growth rate of productivity is associated mainly with slower output growth. Between 1979 and 1990, multifactor productivity growth in manufacturing rebounded sharply to 1.1 percent per year. Sectoral output growth continued to slow, and, in this period, all input growth rates also fell. Hours declined, and the growth rates for both capital services and materials fell sharply. As a result, combined inputs grew less than 1 percent annually. The rebound in productivity was associated mainly with slower growth in combined inputs. From 1990 to 1995, multifactor productivity growth accelerated further, exceeding the pre-1973 growth rate. Multifactor productivity advanced 1.7 percent per year during this period. Output growth nearly doubled to 3.8 percent per year while combined inputs rose 2.1 percent annually. The decline in hours abated, and energy, materials and purchased business services all grew much more rapidly than in the 1979-90. Table C. Productivity and related data in manufacturing, percent changes, 1949-98 (percent per year) 1949- 1949- 1973- 1979- 1990- 1995- 199798 73 79 90 95 98 98 Productivity Multifactor productivity1 1.2 Output per hour of all persons 2.7 Output per unit -0.3 of capital services Sectoral Output 3.3 2.6 1.5 -0.6 2.2 1.1 1.7 2.5 2.6 3.7 4.5 6.2 0.0 -2.1 -0.7 0.6 0.5 0.8 4.0 3.8 4.9 5.9 2.5 2.0 3.1 Inputs Hours2 0.6 1.4 0.3 -0.7 0.0 0.4 -0.3 Capital services 3.7 4.0 4.7 2.7 3.1 4.4 5.0 Energy 2.7 4.9 0.8 0.3 1.1 -0.1 5.1 Non-energy materials 2.9 2.3 6.2 1.7 4.1 4.1 5.6 Purchased business 4.0 5.1 5.4 1.7 3.0 2.0 2.2 services Combined inputs3 2.1 2.4 3.2 0.8 2.1 2.3 2.7 1. Output per unit of combined hours, capital, energy, materials and purchased business services inputs. 2. Hours at work of all persons. 3. The growth rate of each input is weighted by its share of nominal costs. From 1995 to 1998, multifactor productivity advanced 2.5 percent per year, twice its long-term average. The rapid productivity gain was accompanied by a sharp increase in the rate of sectoral output growth to 4.9 percent per year while combined inputs continued to advance at about the same rate as in the early 1990s. Hours increased during the 1995-98 period, but the growth rate of capital services at 4.4 percent was most notable. Among detailed manufacturing industries, durable goods manufacturers experienced faster multifactor productivity gains than nondurable goods manufacturers (table 9). While little difference exists prior to 1979, the productivity gap widens thereafter primarily due to the rapid productivity growth in the two machinery industries. Over the 1949-98 period, multifactor productivity advanced most rapidly in textile mill products, industrial machinery and electrical machinery industries. The printing and publishing industry is notable as the only industry to experience a multifactor productivity decline over the entire period. In the most recent period, 1995-98, multifactor productivity in industrial machinery jumped 7.6 percent per year and electrical and electronic machinery advanced 7.2 percent. Most information processing equipment other than software is made within these two industries. Most other industries grew less than 1.6 percent per year. Revisions Beginning with this release, historical data for multifactor productivity in all sectors and industries reflect several important changes and revisions to the data sources used to develop these series. In "A Preview of Comprehensive revisions of the National Income and Product Accounts: Definitional and Classificational Changes," by Brent Moulton, Robert Parker and Eugene Seskin, Survey of Current Business, August 1999, the Bureau of Economic Analysis (BEA) described several important changes to the national accounts. The three principal changes are the treatment of software as an investment rather than an intermediate good, the redefinition of the value of imputed services of regulated investment companies and the incorporation of detailed data from the BLS CPI research series. A description of this price index can be found in "CPI Research Series using Current Methods, 1978-98" Kenneth Stewart and Stephen Reed, Monthly Labor Review, June 1999. Real gross domestic product from these three changes are revised as far back as 1959. Three types of software were identified: pre-packaged, custom and own-account software. Pre-packaged software is developed by one firm for sale to numerous firms. Custom software is developed by one firm for the specific use of another. Ownaccount software is developed by a firm for its own use. See Shelby Herman, "Fixed Assets and Consumer Durable Goods," Survey of Current Business, April 2000 for a description of investment in software, associated measures and updated measures of fixed reproducible tangible wealth through 1998. Private business and private nonfarm business output series reflect the comprehensive revisions to the National Income and Product Accounts (NIPAs) announced by the Bureau of Economic Analysis in October 1999 as well as the annual revisions of July 2000. Hours data have been revised to reflect the annual benchmarking of employment derived from the BLS Current Establishment Statistics survey. The hours data in this release incorporate the results of the 1998 Hours at Work survey. This survey is designed to measure the ratio of hours at work to hours paid for production and nonsupervisory employees in nonagricultural establishments. BLS converts hours paid from the Current Employment Statistics program to hours at work using data from this survey. The results from the 1998 Hours at Work survey can be found on the web at http://stats.bls.gov/lprlabor.htm or in print. Labor composition measures have been updated through 1998. A brief description, entitled "Changes in the Composition of Labor for the BLS Multifactor Productivity Measures, 1998," is available on the BLS website at http://stats.bls.gov/mprlabor.htm or in print. Manufacturing output, capital services and purchased business services also have been revised to incorporate software investment. Except for some own-account software, software is not produced in the manufacturing sector. Consistency with other input and factor income measures requires that sectoral output now include own-account software. Other software investment is not part of manufacturing output. Business services purchased by manufacturers were revised to remove purchases of software which are now treated as a capital investment. Manufacturing transactions now reflect data available from the BEA's 1992 input-output table (Ann M. Lawson, "Benchmark Input-Output Accounts for the U.S.," Survey of Current Business, November 1997) and the 1997 table developed by the Office of Employment Projections (OEP) of the BLS. (The 1997 table is developed in a comparable fashion to the 1992 tables described in "Outlook: 1990-2005", Bulletin 2402, U.S. Department of Labor, BLS, May 1992, p. 101-102) Incorporating these tables resulted in revised data on sectoral output, nonenergy materials and purchased business services for the years 1988 through 1998. Measures of these transactions between the 1992 and 1997 inputoutput tables are determined by BLS estimates of annual inputoutput tables Small revisions to the manufacturing data for 1972-98 are based on revised industry price indexes developed by the OEP of the BLS. Benchmark intra-industry transactions for 1963-97 are now based on more detailed input-output tables resulting in small revisions beginning in 1959. Summary of Methods The following note describes the major data sources and the procedures used in deriving BLS multifactor productivity indexes. More detailed information on methods, limitations, and data sources is provided in BLS Bulletin 2178 (September 1983), "Trends in Multifactor Productivity, 1948-81." Methods for measuring manufacturing multifactor productivity are discussed in William Gullickson, "Measurement of productivity growth in U.S. manufacturing," in the July 1995 issue of the Monthly Labor Review. Additional data not contained in the release can be obtained in print or on the BLS web site at http://stats.bls.gov/mprhome.htm. This release presents data for the private business, private nonfarm business, and manufacturing sectors. The private business sector, which accounts for about 76 percent of gross domestic product, includes all of gross domestic product except the output of general government, government enterprises, nonprofit institutions, the rental value of owner-occupied real estate, and the output of paid employees of private households. In addition, the private nonfarm business sector excludes farms, but includes agricultural services. Manufacturing sector output is measured as the value of all production delivered to nonmanufacturing industries plus deliveries to final demand. These private business, private nonfarm business, and manufacturing multifactor productivity measures describe the relationship between output in real terms and the inputs involved in its production. They do not measure the specific contributions of labor, capital, or any other factor of production. Rather, multifactor productivity is designed to measure the joint influences on economic growth of technological change, efficiency improvements, returns to scale, reallocation of resources due to shifts in factor inputs across industries, and other factors. Private business and private nonfarm business The multifactor productivity data for private business and private nonfarm business indexes are derived by dividing an output index by an index of labor input and capital services. The output indexes are computed as chained superlative indexes (Fisher Ideal indexes) of components of real output. For the years 1948 to 1998, the Bureau of Economic Analysis (BEA) supplies the output indexes. BLS adjusts these to eliminate the output of government enterprises. Capital input measures the services derived from the stock of physical assets and software. The assets included are fixed business equipment, structures, inventories, and land. Among equipment, BLS provides additional detail for information processing equipment and software (IPES). IPES is composed of four broad classes of assets, computers and related equipment, software, communications equipment, and other IPES equipment. Computers and related equipment includes mainframe computers, personal computers, printers, video displays and other related equipment. Software is comprised of pre-packaged, custom and ownaccount software. Communications equipment is not further differentiated. Other IPES includes scientific and related equipment, photocopying and related equipment and office and accounting equipment. Structures include nonresidential structures and residential capital that is rented out by profitmaking firms or persons. Financial assets are excluded, as are owner-occupied residential structures. The aggregate capital measures are obtained by Tornqvist aggregation of the capital stocks for each asset type within each of 53 industries using estimated rental prices for each asset type. Each rental price reflects the nominal rate of return to all assets within the industry and rates of economic depreciation and revaluation for the specific asset; rental prices are adjusted for the effects of taxes. Data on investments in physical assets are obtained from BEA. Current-dollar gross product originating (GPO) data, obtained from BEA, are used in estimating capital rental prices. This news release makes use of revised GPO data released by BEA in June 2000. Labor input in private business and private nonfarm business is obtained by Tornqvist-aggregation of the hours worked by all persons, classified by education, work experience, and gender with weights determined by their shares of labor compensation. Hours paid of employees are obtained from the Current Employment Statistics program. The hours at work of proprietors, unpaid family workers, and farm employees are derived from the Current Population Survey. The hours of employees are converted to an atwork basis by using the Hours at Work survey. The growth rate of labor composition is defined as the difference between the growth rate of weighted labor input and the growth rate of the hours of all persons. Additional information concerning data sources and methods of measuring labor composition can be found in BLS Bulletin 2426 (December 1993), "Labor Composition and U.S. Productivity Growth, 1948-90." The labor and capital components of the input indexes are combined with (Tornqvist) weights that represent each component's share of total costs. Total costs are defined as the value of output (gross product originating) less a portion of indirect business taxes. Most indirect taxes such as excise taxes are excluded from costs; however, property and motor vehicle taxes remain in total costs. The index uses changing weights: The share in each year is averaged with the preceding year's share. Manufacturing sector and manufacturing industries The manufacturing multifactor productivity index is derived by dividing an output index by an index of combined hours, capital services, energy, materials, and purchased business services. The output index for total manufacturing is computed using a chained superlative index (Tornqvist) of 4-digit SIC industry outputs. Industry outputs are developed by BLS from data obtained from the Annual Survey of Manufactures (ASM) and the Census of Manufactures (CM) from the Bureau of the Census, U.S. Department of Commerce, together with Producer Price Indexes from BLS and price data from BEA. Labor input in manufacturing is measured as the sum of hours at work of all persons. The construction of hours at work follows the methods used in the private business sector described above, except that hours in manufacturing are directly aggregated and do not include the effects of changing labor composition. Capital inputs in manufacturing are measured using the same methods and data sources as capital services in private business. Energy input is constructed using costs and quantity data from the ASM, the CM, and the Manufacturing Energy Consumption Survey of the Energy Information Administration, U.S. Department of Energy, together with BLS Producer Price Indexes. The series on non-energy materials input also relies on ASM and CM data. Indexes of purchased business services are developed by BLS using input-output tables to estimate the proportion of costs attributed to nine types of services. Tornqvist indexes of each of these three input classes are developed at the 2-digit SIC level and then aggregated to total manufacturing. As with the sectoral output measures, materials ands energy inputs are adjusted to exclude transactions between establishments within the same sector. The five input indexes (capital services, hours, energy, materials, and purchased business services) are combined using Tornqvist aggregation, employing weights that represent each component's share of total costs. Total costs are defined as the value of manufacturing sectoral output. The index uses changing weights: The share in each year is averaged with the preceding year's share. Research and development The stock of research and development (R&D) in private nonfarm business is derived by cumulating constant dollar measures of R&D expenditures and allowing for depreciation. Current dollar expenditures for privately financed R&D for the years 1953-98 are obtained from annual issues of Research and Development in Industry published by the National Science Foundation. BLS develops price deflators and estimates of the rate of depreciation. Further description of these data and methods can be found in BLS Bulletin 2331 (September 1989), "The Impact of Research and Development on Productivity Growth." Table 1. Private business sector: Productivity and related measures, 1948-981 Indexes 1996=100 Productivity Inputs Output Output Combined per per Multiunits of Capital Year hour unit factor Capital capital services of all of Product- Out- Labor Serv- and per hour of persons capital ivity2 put3 Input4 ices5 labor6 all persons 1948 1949 31.1 108.4 32.2 105.4 51.6 52.2 18.6 51.1 18.6 49.4 17.2 17.6 36.1 35.6 28.7 30.5 1950 35.0 111.7 56.0 20.4 50.3 18.3 36.5 31.3 1955 40.9 115.3 62.0 24.9 53.7 21.6 40.2 35.4 1960 1961 1962 1963 1964 45.6 47.4 49.6 51.6 53.9 110.4 109.5 113.1 114.8 118.1 65.2 66.4 68.8 70.9 73.7 27.5 28.1 29.9 31.3 33.3 54.0 53.3 54.8 55.2 56.2 24.9 25.7 26.4 27.3 28.2 42.3 42.3 43.5 44.1 45.2 41.3 43.3 43.8 44.9 45.7 1965 1966 1967 55.9 120.8 58.2 122.0 59.5 117.5 76.1 78.4 78.5 35.6 58.0 38.1 59.5 38.8 59.4 29.5 31.2 33.0 46.8 48.5 49.4 46.3 47.7 50.6 1968 1969 61.4 118.4 61.7 116.2 80.5 80.2 40.7 60.3 42.0 62.1 34.4 36.1 50.6 52.4 51.9 53.1 1970 1971 1972 1973 1974 63.0 65.8 68.0 70.1 69.0 111.1 110.8 113.4 114.8 107.0 80.0 82.6 85.0 87.3 84.1 42.0 43.6 46.5 49.8 49.0 61.0 60.5 62.6 64.8 65.2 37.8 39.4 41.1 43.4 45.8 52.4 52.8 54.8 57.1 58.3 56.7 59.4 59.9 61.1 64.5 1975 1976 1977 1978 1979 71.4 74.1 75.2 76.1 76.0 102.1 105.7 107.6 109.5 107.8 84.8 88.1 89.5 90.6 90.3 48.5 51.9 54.8 58.2 60.2 62.4 64.2 66.8 70.2 72.4 47.5 49.1 51.0 53.2 55.8 57.2 58.9 61.2 64.2 66.6 70.0 70.0 69.9 69.5 70.5 1980 1981 1982 1983 1984 75.8 101.5 77.3 99.3 77.2 92.7 79.9 94.9 82.2 99.0 88.3 88.5 85.8 88.3 91.2 59.4 61.0 59.3 62.5 68.1 71.9 73.0 71.7 73.4 77.7 58.6 61.4 64.0 65.8 68.8 67.3 69.0 69.1 70.8 74.7 74.7 77.8 83.2 84.1 83.1 1985 1986 1987 1988 1989 83.9 98.6 86.5 98.2 87.0 98.5 88.1 99.8 89.0 100.4 92.2 93.7 94.0 94.6 95.2 71.0 73.6 76.3 79.6 82.4 79.6 80.5 83.1 86.3 88.9 72.0 75.0 77.5 79.7 82.0 77.0 78.6 81.2 84.1 86.5 85.1 88.1 88.4 88.2 88.6 1990 1991 1992 1993 1994 90.2 99.3 91.3 96.1 94.8 97.7 95.4 98.5 96.6 100.3 95.3 94.4 96.6 97.1 98.1 83.6 82.6 85.7 88.5 92.8 89.4 88.3 89.3 91.8 95.6 84.2 86.0 87.7 89.8 92.6 87.7 87.5 88.8 91.1 94.6 90.8 95.0 97.0 96.8 96.3 1995 97.3 99.7 98.4 95.8 98.0 96.0 97.3 97.6 1996 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 1997 102.0 100.5 101.1 105.2 103.7 104.7 104.0 101.5 1998 104.8 100.1 102.6 110.6 106.4 110.4 107.7 104.7 See footnotes following table 6. Source: Bureau of Labor Statistics Table 2. Private nonfarm business sector: Productivity and related measures, 1948-981 Indexes 1996=100 Productivity Inputs Output Output Combined per per Multiunits of Capital Year hour unit factor Capital capital services of all of Product- Out- Labor Serv- and per hour of persons capital ivity2 put3 Input4 ices5 labor6 all persons 1948 35.1 118.6 56.5 17.9 44.1 15.1 31.8 29.6 1949 36.7 115.4 57.6 17.9 42.2 15.5 31.1 31.8 1950 39.1 121.9 61.1 19.7 43.7 16.2 32.3 32.1 1955 44.6 126.4 66.5 24.4 48.6 19.3 36.7 35.3 1960 1961 1962 1963 1964 48.7 50.3 52.6 54.5 56.8 120.1 118.6 122.5 124.1 127.8 69.1 70.0 72.4 74.4 77.3 27.2 27.7 29.6 31.0 33.1 50.1 49.9 51.5 52.1 53.4 22.6 23.4 24.2 25.0 25.9 39.3 39.6 40.9 41.7 42.8 40.5 42.5 43.0 43.9 44.5 1965 1966 1967 1968 1969 58.6 60.7 61.8 63.7 63.8 130.3 131.6 126.2 127.1 124.2 79.5 81.8 81.7 83.8 83.1 35.5 38.0 38.7 40.8 42.0 55.4 57.2 57.1 58.2 60.1 27.2 28.9 30.6 32.1 33.8 44.6 46.5 47.3 48.6 50.5 45.0 46.1 48.9 50.2 51.4 1970 1971 1972 1973 1974 64.9 67.6 69.9 72.1 71.0 118.3 117.7 120.2 121.8 113.2 82.6 85.2 87.7 90.2 86.9 41.9 43.6 46.6 50.0 49.2 59.3 58.9 60.9 63.3 63.7 35.5 37.0 38.8 41.1 43.5 50.7 51.1 53.1 55.5 56.7 54.8 57.5 58.1 59.2 62.7 1975 1976 1977 1978 1979 73.0 75.8 76.9 77.8 77.5 106.8 110.9 112.6 114.7 112.5 87.1 90.6 91.9 93.2 92.6 48.4 51.9 54.9 58.4 60.3 60.9 62.8 65.4 68.8 71.1 45.3 46.8 48.7 50.9 53.6 55.5 57.3 59.7 62.7 65.1 68.3 68.3 68.2 67.9 68.9 1980 1981 1982 1983 1984 77.3 105.7 90.5 78.3 102.5 90.0 78.0 95.1 87.1 81.4 97.9 90.3 83.2 101.5 92.7 59.6 60.8 58.9 62.8 68.1 70.7 56.4 71.8 59.4 70.6 62.0 72.3 64.1 76.7 67.1 65.9 67.6 67.7 69.5 73.5 73.1 76.4 82.0 83.2 82.0 1985 1986 1987 1988 1989 84.4 87.1 87.5 88.6 89.2 100.4 99.8 99.7 101.1 101.4 93.1 94.5 94.7 95.4 95.7 70.8 73.5 76.2 79.7 82.4 78.8 70.5 79.8 73.7 82.5 76.4 85.9 78.8 88.5 81.3 76.0 77.8 80.5 83.6 86.1 84.1 87.2 87.7 87.6 88.0 1990 1991 1992 1993 1994 90.3 91.4 94.8 95.3 96.5 100.0 96.6 97.9 98.8 100.3 95.6 94.7 96.6 97.1 98.1 83.5 82.5 85.5 88.4 92.6 89.2 83.5 88.0 85.4 89.0 87.3 91.8 89.5 95.4 92.3 87.3 87.1 88.4 91.0 94.4 90.3 94.7 96.8 96.5 96.3 1995 97.5 1996 100.0 1997 101.7 1998 104.5 99.9 98.6 95.8 97.8 95.9 97.2 97.6 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.2 100.9 105.1 103.8 104.9 104.2 101.5 99.8 102.4 110.6 106.6 110.8 108.0 104.7 See footnotes following table 6. Source: Bureau of Labor Statistics Table 3. Manufacturing sector: Productivity and related measures, 1949-98 Indexes 1992=100 Productivity Inputs Output Output Purchased Comper per Multi- SecBusi- bined Year hour unit factor toral Capital ness units of all of Product- Out- Hours ServMater- serv- of all person capital ivity7 put8 9 ices5 Energy ials ices inputs10 1949 33.5 126.3 63.6 26.5 79.1 21.0 28.9 30.9 16.9 41.7 1950 34.0 134.0 66.9 29.1 85.5 21.7 30.3 30.4 19.7 43.5 1955 38.8 135.8 71.2 36.7 94.6 27.0 42.2 37.6 25.5 51.5 1960 1961 1962 1963 1964 41.8 42.8 44.2 45.7 47.5 124.3 121.8 127.1 129.0 132.6 72.8 73.4 76.2 78.4 80.6 38.5 38.4 41.2 43.1 45.7 92.0 89.7 93.4 94.3 96.3 30.9 31.5 32.4 33.4 34.5 51.3 51.6 54.6 57.6 63.4 38.2 38.0 38.5 38.2 39.4 28.2 28.1 30.1 32.8 34.8 52.9 52.3 54.1 55.0 56.7 1965 1966 1967 1968 1969 48.6 49.1 50.9 52.7 53.6 136.5 136.8 130.3 130.6 127.6 82.7 83.0 82.5 85.1 85.7 49.5 53.3 54.9 57.7 59.4 101.9 108.6 107.9 109.5 110.8 36.3 38.9 42.2 44.2 46.5 67.0 71.9 77.4 82.3 85.2 41.3 43.9 45.9 46.5 46.4 37.2 42.0 47.8 47.7 50.6 59.8 64.2 66.5 67.8 69.3 1970 1971 1972 1973 1974 54.2 57.9 60.3 61.4 61.2 116.5 116.4 122.8 125.1 115.2 84.4 86.7 89.8 91.4 86.5 56.5 58.1 63.3 67.8 66.1 104.2 100.5 105.1 110.5 107.9 48.5 50.0 51.5 54.2 57.4 85.4 86.7 89.1 91.9 94.4 44.8 47.9 51.4 53.6 58.5 48.8 48.2 51.4 56.0 60.0 67.0 67.0 70.5 74.2 76.4 1975 1976 1977 1978 1979 64.2 66.9 69.7 70.4 69.8 103.6 108.8 112.9 114.0 110.3 84.0 87.0 88.2 88.9 88.0 62.5 68.2 73.9 77.8 78.7 97.3 60.3 87.9 61.7 58.1 101.9 62.7 91.2 66.9 59.4 106.1 65.5 91.3 75.2 64.4 110.5 68.3 92.5 78.7 68.2 112.7 71.3 96.4 77.0 77.0 74.4 78.4 83.8 87.5 89.4 1980 1981 1982 1983 1984 70.1 70.9 74.6 76.8 79.5 100.9 96.8 90.3 93.5 100.4 86.6 87.1 88.7 90.7 93.5 75.3 75.6 72.7 75.9 83.7 107.5 74.7 92.5 75.0 73.7 106.7 78.2 92.2 74.4 71.1 97.5 80.5 83.3 72.5 61.5 98.8 81.1 84.3 73.1 69.1 105.3 83.3 89.6 80.6 73.4 87.0 86.8 81.9 83.7 89.5 1985 1986 1987 1988 1989 82.3 85.9 88.4 90.2 90.3 99.9 100.1 101.5 104.7 103.3 94.9 86.0 104.5 86.1 96.5 88.5 103.0 88.4 99.5 91.6 103.6 90.2 101.3 96.1 106.6 91.8 99.4 96.6 107.1 93.5 86.7 85.6 68.6 87.4 87.6 73.0 92.9 84.3 77.7 96.6 85.8 84.7 96.8 89.5 90.2 90.6 91.7 92.1 94.9 97.2 1990 92.8 101.6 99.3 97.3 104.8 95.8 99.9 92.5 92.5 98.0 1991 95.0 97.5 98.3 95.4 100.4 97.9 100.1 93.6 92.1 97.0 1992 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 1993 101.9 101.1 100.4 103.3 101.4 102.2 103.7 105.7 103.0 102.9 1994 105.0 104.0 102.6 108.7 103.6 104.5 107.3 111.3 105.1 106.0 1995 109.0 1996 112.8 1997 117.1 1998 124.3 105.0 104.5 105.6 106.5 105.0 106.1 109.8 113.2 113.4 116.9 123.5 130.7 See footnotes following table 6. 104.0 108.0 103.7 111.9 105.5 116.9 105.2 122.8 109.5 112.8 107.0 120.4 103.9 120.4 109.2 127.2 110.0 108.9 114.2 116.8 107.9 110.2 112.5 115.5 Source: Bureau of Labor Statistics Table 4. Private business sector: Productivity and related measures, 1948-98 Percent Change Productivity Inputs Output Output Combined per per Multiunits of Capital Year hour unit factor Capital capital services of all of Product- Out- Labor Serv- and per hour of persons capital ivity2 put3 Input4 ices5 labor6 all persons 1949 3.5 -2.8 1.2 -0.2 -3.3 2.7 -1.4 6.4 1950 8.8 6.0 7.3 10.1 2.0 3.9 2.6 2.6 1955 4.6 5.1 4.7 8.5 3.9 3.3 3.7 -0.4 1960 1961 1962 1963 1964 1.9 3.8 4.6 4.0 4.6 -1.8 -0.9 3.3 1.5 2.9 0.3 1.9 3.6 3.0 4.0 1.8 2.0 6.5 4.6 6.4 0.5 -1.2 2.7 0.8 1.8 3.7 2.9 3.1 3.1 3.4 1.5 0.0 2.8 1.5 2.3 3.7 4.7 1.3 2.5 1.7 1965 1966 1967 1968 1969 3.6 4.1 2.2 3.2 0.5 2.3 1.1 -3.7 0.7 -1.9 3.2 3.1 0.1 2.6 -0.5 7.0 6.8 1.9 5.1 3.0 3.2 4.7 2.6 5.7 -0.2 5.8 1.6 4.4 2.9 5.0 3.7 3.6 1.7 2.5 3.5 1.3 3.0 6.2 2.5 2.4 1970 1971 1972 1973 1974 2.2 4.4 3.3 3.2 -1.6 -4.4 -0.3 2.3 1.2 -6.7 -0.2 3.2 2.9 2.7 -3.7 0.0 -1.7 3.9 -0.8 6.7 3.4 7.0 3.5 -1.6 0.7 0.1 0.7 3.7 4.2 2.1 6.8 4.7 0.9 2.0 5.5 1975 1976 1977 1978 3.5 3.7 1.6 1.1 -4.6 3.6 1.7 1.8 0.9 3.8 1.6 1.2 -1.0 6.9 5.7 6.2 4.5 4.2 4.3 5.7 5.5 -4.4 3.8 2.9 3.2 4.0 3.9 5.2 4.3 -1.9 8.6 3.0 0.1 4.0 -0.1 4.9 -0.7 1979 -0.1 -1.6 -0.3 3.3 3.1 1980 1981 1982 1983 1984 -0.3 2.0 -0.2 3.5 2.9 -5.8 -2.1 -5.7 2.4 4.3 -2.3 0.2 -3.0 2.8 3.3 -1.2 2.7 -2.9 5.4 9.0 -0.6 4.9 1.5 4.9 -1.7 4.1 2.3 2.9 6.0 4.5 1.1 5.9 2.5 4.2 0.1 7.0 2.5 1.1 5.5 -1.3 1985 1986 1987 1988 1989 2.1 3.1 0.6 1.2 1.0 -0.4 -0.4 0.3 1.3 0.6 1.1 1.6 0.3 0.7 0.6 4.3 3.7 3.6 4.3 3.5 2.4 4.7 1.1 4.2 3.2 3.3 3.9 2.9 2.9 2.9 3.1 2.1 3.3 3.6 2.9 1990 1991 1992 1993 1994 1.3 1.2 3.8 0.6 1.3 -1.1 -3.2 1.6 0.8 1.8 0.2 -1.0 2.3 0.5 1.1 1.5 -1.1 3.7 3.3 4.9 0.6 -1.2 1.1 2.8 4.1 1.3 2.5 -0.2 4.6 1.4 2.2 2.7 -0.2 3.8 -0.5 1995 1996 1997 1998 0.8 2.8 2.0 2.7 -0.5 0.3 0.5 -0.3 0.3 1.6 1.1 1.5 3.2 4.4 5.2 5.1 2.5 3.7 2.1 4.1 3.7 4.7 2.6 5.4 See footnotes following table 6. 5.0 2.7 2.1 2.0 2.4 3.0 3.7 2.9 2.8 4.0 3.5 1.5 2.5 3.5 0.3 -0.2 0.4 1.3 2.5 1.5 3.1 Source: Bureau of Labor Statistics Table 5. Private nonfarm business sector: Productivity and related measures, 1948-98 Percent Change Productivity Inputs Output Output Combined per per Multiunits of Capital Year hour unit factor Capital capital services of all of Product- Out- Labor Serv- and per hour of persons capital ivity2 put3 Input4 ices5 labor6 all persons 1949 4.5 -2.7 2.0 0.0 -4.2 2.7 -2.0 7.3 1950 6.7 5.7 6.0 10.0 3.6 4.2 3.8 1.0 1955 4.7 5.1 4.7 8.9 4.2 3.6 4.0 -0.4 1960 1961 1962 1963 1964 1.3 3.4 4.6 3.6 4.2 -2.3 -1.3 3.3 1.3 3.0 0.2 1.3 3.4 2.8 3.9 1.7 2.0 6.9 4.7 6.8 0.4 -0.4 3.3 1.2 2.4 4.1 3.3 3.5 3.3 3.7 1.5 0.7 3.3 1.8 2.8 3.7 4.8 1.2 2.2 1.2 1965 3.1 1966 3.5 1.9 1.0 2.8 2.9 7.1 3.7 7.2 3.3 5.0 6.1 4.1 4.2 1.2 2.5 1967 1.8 1968 3.2 1969 0.1 -4.1 0.7 -2.2 -0.1 2.6 -0.9 1.7 -0.2 6.0 5.4 1.8 4.7 3.0 3.3 5.4 1.8 2.7 3.9 6.2 2.5 2.4 1970 1971 1972 1973 1974 1.6 4.2 3.4 3.2 -1.5 -4.8 -0.5 2.2 1.3 -7.0 -0.6 3.0 3.0 2.8 -3.6 -0.1 -1.3 4.9 3.9 -0.7 4.4 7.0 3.4 4.7 7.4 3.9 6.0 -1.6 0.6 5.9 0.5 0.8 3.8 4.5 2.1 6.7 4.8 1.2 1.9 5.9 1975 1976 1977 1978 1979 2.8 3.8 1.5 1.3 -0.4 -5.7 3.9 1.5 1.8 -1.9 0.2 4.1 1.4 1.4 -0.7 -1.8 7.4 5.7 6.5 3.2 -4.4 4.1 3.1 3.4 4.2 4.1 5.2 4.6 3.3 5.2 -2.0 8.9 3.2 -0.1 4.2 -0.1 5.0 -0.5 3.9 1.5 1980 1981 1982 1983 1984 -0.3 1.3 -0.4 4.4 2.3 -6.0 -3.1 -7.2 2.9 3.7 -2.3 -0.5 -3.2 3.7 2.7 -1.2 2.1 -3.1 6.5 8.5 -0.5 5.2 1.5 5.3 -1.6 4.4 2.4 3.5 6.2 4.6 1.1 6.1 2.6 4.5 0.2 7.3 2.7 1.4 5.7 -1.4 1985 1986 1987 1988 1989 1.4 3.1 0.4 1.3 0.8 -1.0 -0.6 -0.1 1.3 0.3 0.5 1.5 0.1 0.8 0.3 3.9 3.9 3.6 4.6 3.4 2.7 5.0 1.3 4.5 3.4 3.7 4.1 3.2 3.0 3.1 3.4 2.3 3.5 3.8 3.0 1990 1991 1992 1993 1994 1.2 1.3 3.6 0.6 1.3 -1.4 -3.4 1.4 0.9 1.5 0.0 -1.0 2.0 0.5 1.0 1.4 -1.2 3.6 3.5 4.7 0.8 -1.4 1.2 3.1 3.9 1.4 2.6 -0.2 4.8 1.5 2.2 2.9 -0.3 3.7 -0.2 1995 1996 1997 1998 1.0 2.5 1.7 2.7 -0.4 0.1 0.2 -0.4 0.5 1.4 0.9 1.5 3.4 4.4 5.1 5.2 2.5 3.9 2.3 4.3 3.8 4.9 2.7 5.6 See footnotes following table 6. 2.8 2.3 2.2 2.6 3.1 3.0 2.9 4.2 3.7 2.5 3.8 0.5 -0.1 0.5 1.4 2.4 1.5 3.1 Source: Bureau of Labor Statistics Table 6. Manufacturing sector: Productivity and related measures, 1950-98 Percent Change Productivity Inputs Output Output Purchased Comper per Multi- SecBusi- bined Year hour unit factor toral Capital ness units of all of Product- Out- Hours ServMater- serv- of all person capital ivity7 put8 9 ices5 Energy ials ices inputs10 1950 1.5 6.1 5.2 9.7 8.1 3.4 4.7 -1.4 16.7 4.3 1955 4.0 5.7 3.0 9.7 5.5 3.8 1960 1961 1962 1963 1964 2.2 2.4 3.2 3.5 3.8 -0.7 0.2 -2.1 0.9 4.4 3.9 1.5 2.8 2.8 2.9 1.7 -0.4 2.5 1.9 -0.2 -2.6 1.9 0.6 7.5 4.1 2.9 5.8 4.5 1.0 3.0 5.5 6.0 2.1 3.1 10.0 4.2 -0.6 1.4 -0.8 3.1 1.7 -0.6 7.1 9.0 6.0 1.5 -1.1 3.5 1.7 3.0 1965 1966 1967 1968 1969 2.3 1.1 3.7 3.6 1.7 3.0 0.2 -4.8 0.3 -2.3 2.6 0.4 -0.6 3.1 0.7 8.3 7.7 3.1 5.1 2.9 5.9 6.5 -0.6 1.4 1.2 5.2 7.4 8.3 4.8 5.4 5.7 7.3 7.8 6.2 3.5 4.9 6.9 6.3 13.0 4.4 13.8 1.2 -0.4 -0.2 6.1 5.6 7.2 3.7 1.9 2.2 1970 1971 1972 1973 1974 1.2 6.7 4.1 1.9 -0.3 -8.7 -0.1 5.6 1.8 -7.9 -1.6 2.8 3.6 1.8 -5.4 -4.8 2.9 8.9 7.1 -2.5 -5.9 -3.6 4.6 5.1 -2.3 4.3 3.0 3.2 5.2 5.8 0.3 -3.3 -3.5 1.5 6.7 -1.1 2.7 7.4 6.6 3.2 4.4 9.0 2.8 9.2 7.1 -3.3 0.1 5.1 5.3 3.0 1975 1976 1977 1978 1979 4.9 -10.0 -2.9 4.2 5.0 3.5 4.1 3.7 1.4 1.0 0.9 0.8 -0.8 -3.2 -1.0 -5.4 -9.9 5.1 9.1 4.8 3.9 8.4 4.1 4.5 5.2 4.2 4.3 1.1 1.9 4.5 1980 1981 1982 1983 1984 0.4 1.1 5.2 3.0 3.5 -8.6 -1.7 -4.1 0.7 -6.6 1.8 3.5 2.3 7.4 3.1 -4.3 -4.6 4.7 -4.0 -2.5 -4.3 -2.6 0.4 -0.7 4.7 -0.4 -0.8 -3.6 -0.3 -3.9 -8.7 2.9 -9.6 -2.5 -13.5 -5.6 4.4 1.4 0.9 1.1 0.7 12.4 2.1 10.3 6.5 2.7 6.4 10.3 6.2 7.0 1985 1986 1987 1988 1989 3.6 4.3 2.9 2.0 0.1 -0.5 0.2 1.4 3.1 -1.4 1.5 1.7 3.2 1.8 -1.8 2.8 -0.8 3.3 -3.3 6.3 -6.6 2.8 -1.4 2.6 0.8 2.3 6.5 3.6 0.6 2.1 6.2 -3.8 6.4 4.9 2.8 1.7 4.0 1.8 9.0 0.5 0.5 1.9 0.2 4.3 6.5 1.3 1.2 0.4 3.1 2.4 1990 1991 1992 1993 1994 2.9 2.3 5.3 1.9 3.0 -1.7 -4.0 2.6 1.1 2.9 -0.2 -1.0 1.7 0.4 2.2 0.7 -2.1 2.4 3.2 3.3 -2.0 -4.2 2.1 0.2 1.3 4.8 -0.4 2.2 -0.1 6.8 3.3 1.4 2.2 3.7 5.7 5.2 2.2 2.3 3.4 5.3 2.5 -0.4 8.6 3.0 2.1 0.9 -1.0 3.1 2.9 3.0 1995 1996 1997 1998 3.8 3.5 3.8 6.2 0.9 2.4 -0.5 1.0 1.1 3.4 0.8 3.1 2.1 1.4 4.6 -2.3 6.8 -1.0 -3.0 -0.1 4.9 5.1 5.6 2.2 1.8 2.1 2.1 2.7 4.3 0.4 3.1 -0.3 5.6 1.7 5.9 -0.3 See footnotes following table 6. 3.3 3.7 4.4 5.0 13.9 8.3 11.0 -6.9 3.8 0.1 1.2 4.2 5.4 8.5 12.5 4.6 -2.2 6.6 -3.2 -2.6 2.3 5.4 8.3 6.8 6.0 4.4 12.8 2.2 Source: Bureau of Labor Statistics Footnotes, Tables 1-6 Source: Output data are from the Bureau of Economic Analysis (BEA), U.S. Department of Commerce, and modified by the Bureau of Labor Statistics (BLS), U.S. Department of Labor. Compensation and hours data are from BLS. Capital measures are based on data supplied by BEA and the U.S. Department of Agriculture. See also Summary of Methods in this release. (1) The private business sector includes all of gross domestic product except the output of general government, government enterprises, non-profit institutions, the rental value of owner-occupied real estate, and the output of paid employees of private households. The private nonfarm business sector also excludes farms but includes agricultural services. (2) Output per unit of combined labor and capital inputs. (3) Gross domestic product originating in the sector, superlative chained index. (4) Index of the hours at work of all persons including employees, proprietors, and unpaid family workers classified by education, work experience, and gender. This superlative chain index is computed by combining changes in the hours of each education, experience, and gender group weighted by each group's share of labor compensation. (5) A measure of the flow of capital services used in the sector. (6) Labor input combined with capital input, using labor's and capital's shares of costs as weights to form a superlative chained index. (7) Sectoral output per combined units of capital, hours, energy, non-energy materials, and purchased business services. (8) Manufacturing gross output excluding transactions between manufacturing establishments, superlative chained index. (9) Hours at work of all persons. (10) Combined units of capital services, hours, energy, non-energy materials, and purchased business services, superlative chained index. Table 7. Real capital input by asset type, private business, 1948-98 Average annual growth rates (percent) 1948- 1948- 1973- 1979- 1990- 1995- 19971998 1973 1979 1990 1995 1998 1998 All Assets 3.8 Equipment All 3.8 5.8 11.4 4.3 5.5 9.8 3.8 7.0 13.4 5.6 14.3 2.7 4.4 8.5 4.8 8.4 15.4 5.4 9.5 17.4 Information equipment & software (IPES) Computers & related equipment Software 27.8 21.2 25.3 28.2 Communication 8.6 equipment Other IPES All other equipment 36.0 13.5 10.1 6.5 6.7 32.2 16.0 8.0 11.2 14.6 13.4 8.3 5.9 40.9 13.5 4.1 45.8 14.2 7.0 3.1 4.1 7.8 4.2 3.8 4.8 5.2 1.8 1.7 3.8 4.2 Structures 3.0 3.1 2.9 3.5 1.7 2.0 2.2 Residential rental capital 2.5 3.5 2.6 1.5 0.5 0.7 0.5 Inventories 3.5 4.2 3.5 2.2 2.6 4.3 6.0 Land 1.9 2.0 2.3 2.5 0.8 1.0 1.3 Source: Bureau of Labor Statistics Note: For a brief discussion of methods used in preparing these data, see Summary of Methods in this release. Table 8. Real capital input by asset type, private nonfarm business, 1948-98 Average annual growth rates (percent) 1948- 1948- 1973- 1979- 1990- 1995- 19971998 1973 1979 1990 1995 1998 1998 All Assets 4.1 Equipment 5.9 All 11.4 Information equipment & software (IPES) Computers & related equipment Software 4.1 5.6 9.8 27.8 21.2 4.5 7.1 13.4 25.3 28.2 4.1 5.9 14.3 36.0 13.5 2.8 4.9 4.6 8.5 32.2 16.0 5.6 8.6 15.4 14.6 13.4 9.7 17.4 40.9 13.5 45.8 14.2 Communication 8.6 equipment Other IPES All other equipment 6.5 10.1 6.7 8.0 11.2 8.2 5.9 4.1 3.1 7.0 4.1 7.8 4.2 4.0 4.9 5.2 2.1 1.9 3.9 4.3 Structures 3.1 3.2 3.0 3.6 1.8 2.1 2.2 Residential rental capital 2.5 3.6 2.6 1.5 0.5 0.7 0.5 Inventories 3.7 4.4 3.7 2.4 2.6 4.4 6.1 Land 2.7 2.8 3.3 3.3 1.0 1.1 1.6 Source: Bureau of Labor Statistics Note: For a brief discussion of methods used in preparing these data, see Summary of Methods in this release. Table 9. Manufacturing industries: Multifactor productivity trends, 1949-98 Average annual growth rates Industry Manufacturing 1949- 1949- 1973- 1979- 1990- 1995- 199798 73 79 90 95 98 98 1.2 1.5 -0.6 1.1 1.1 2.5 3.1 Nondurable Manufacturing 0.7 1.3 -0.6 0.3 0.3 0.6 1.0 Food and kindred products 0.5 0.7 0.1 0.4 0.7 -0.5 3.0 Tobacco manufactures N.A. N.A. N.A. N.A. N.A. N.A. N.A. Textile mill products 2.2 2.3 3.3 2.1 1.5 1.1 -0.4 Apparel & related products 0.8 0.7 1.9 0.6 0.5 1.4 0.9 Paper and allied products 0.7 1.6 -1.2 0.0 0.2 1.1 -1.0 Printing and publishing -0.2 0.5 -0.7 -0.9 -1.2 -0.3 -0.4 Chemicals & allied products 1.1 2.5 -2.6 0.7 -0.3 1.0 0.4 Petroleum refining 0.4 0.8 -0.6 -0.1 0.3 1.2 2.6 Rubber & misc. 0.7 1.0 -1.9 1.4 1.1 1.6 0.0 plastic products Leather & leather products N.A. N.A. N.A. N.A. N.A. N.A. N.A. Durable manufacturing 1.5 1.5 -0.6 1.8 1.8 4.0 4.6 Lumber and wood products 1.2 1.7 0.4 2.5 -1.8 -0.8 0.4 Furniture and fixtures 0.6 0.6 0.4 0.6 0.6 1.6 1.4 Stone, clay, glass 0.9 1.1 -1.3 1.4 0.7 2.1 1.6 & concrete products Primary metals industries 0.1 0.4 -2.3 0.3 0.7 1.6 4.1 Fabricated metals products 0.3 0.5 -1.0 0.5 0.4 -0.1 -4.1 Industrial & commercial 1.8 0.7 0.1 3.2 3.0 7.6 10.0 machinery Electrical & 2.8 2.1 1.0 3.1 5.5 7.2 8.8 electronic machinery Transportation equipment 0.8 1.5 -0.6 0.2 0.4 1.2 1.7 Instruments 1.4 1.8 1.2 1.4 0.0 0.8 2.3 Miscellaneous manufacturing 0.8 1.5 -1.1 1.1 -0.4 0.2 -0.9 N.A. - Multifactor productivity measures are not published because of the small size of the industry and data limitations. This industry is included in the aggregate for total manufacturing. Note: Multifactor productivity measures by industry are not directly comparable to measures for aggregate manufacturing because industry measures exclude transactions only within the specific industry while the aggregate manufacturing measures also exclude transactions between all manufacturing industries.