2017 Multifactor Productivity Trends in Manufacturing — 2019-04-23

Manufacturing sector multifactor productivity declined 1.4 percent in 2017, the U.S. Bureau of Labor Statistics reported today. (See table A.) The multifactor productivity decline in 2017 reflected a 0.4-percent increase in sectoral output and a 1.9-percent increase in combined inputs. The decrease in multifactor productivity followed a 2.8-percent decrease in 2016. Multifactor productivity is calculated by dividing an index of real sectoral output by an index of combined units of labor input, capital services, 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. Durable manufacturing sector multifactor productivity decreased 3.2 percent in 2017. The decline reflected a 0.3-percent increase in sectoral output and a 3.7-percent increase in combined inputs. Nondurable manufacturing sector multifactor productivity increased 0.5 percent in 2017.