2008 Multifactor Productivity Trends in Manufacturing — 2010-11-18

Manufacturing sector multifactor productivity decreased at a 0.7 percent annual rate in 2008, the U.S. Bureau of Labor Statistics reported today. (See chart 1.) This was the largest annual decline in multifactor productivity since 2001. (See table 1.) 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, intermediate inputs (energy, materials, purchased business services). Multifactor productivity, therefore, differs from labor productivity (output per hour worked) measures that are published quarterly by BLS since it includes information on capital services and other data that are not available on a quarterly basis. Durable manufacturing sector multifactor productivity grew 0.3 percent in 2008, after increasing 4.9 percent in 2007.