2009 Multifactor Productivity Trends in Manufacturing — 2011-08-11

Manufacturing sector multifactor productivity declined at a 5.7 percent annual rate in 2009, the U.S. Bureau of Labor Statistics reported today. (See chart 1.) This was the largest annual decline in multifactor productivity since the series started in 1987. (See table 1.) The multifactor productivity decline in 2009 reflected a 12.5 percent decrease in output and a 7.2 percent decrease in combined inputs. Multifactor productivity measures the change in output per unit of combined inputs. 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, allowing for the effects of capital, labor and, in the case of the manufacturing sector, also intermediate inputs (energy, materials, purchased business services).