Is manufacturing productivity recovering? Evidence from the past and present

Manufacturing is often looked at to determine how efficient the economy is at producing goods and services. Long-term productivity growth from the first quarter of 1987 to the third quarter of 2025 was 2.1 percent. More recently, from the fourth quarter of 2007 to the fourth quarter of 2019, manufacturing showed little to no labor productivity growth, at 0.1 percent. By contrast, the current business cycle starting in the fourth quarter of 2019 has shown signs of a recovery, with productivity growing 3.3 percent from the first quarter of 2025 to the third quarter of 2025 alone. In the business cycle covering fourth quarter 2019 to third quarter 2025, productivity has increased 0.4 percent. On January 29, 2026, the revised third quarter 2025 labor productivity and costs data were released. Labor productivity is a measure of economic performance that compares the amount of output with the amount of labor used to produce that output.