2014 Multifactor Productivity Trends in Manufacturing — 2016-06-22

Manufacturing sector multifactor productivity decreased at a 1.0-percent annual rate in 2014, the U.S. Bureau of Labor Statistics reported today. This decrease followed a 0.1-percent increase in 2013. The 2014 decline reflected a 1.7-percent increase in output and a 2.6-percent increase in combined inputs. (See table A, table 1.) Multifactor productivity is calculated by dividing an index of real output by an index of combined units of labor input, capital services, and intermediate inputs. It is designed to measure the joint influences of technological change, efficiency improvements, returns to scale, reallocation of resources, and other factors of economic growth, allowing for the effects of capital, labor, and intermediate inputs. Multifactor productivity annual measures differ from BLS quarterly labor productivity or output per hour measures because the former also includes information on capital services, shifts in the composition of the workforce, and intermediate inputs.