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Productivity and Costs by Industry: Manufacturing and Mining Industries News Release

Internet: http://www.bls.gov/lpc/home.htm		USDL 07-0823
Technical information:   (202) 691-5618		For release: 10:00 a.m. EDT
Media contact:   (202) 691-5902			Friday, June 8, 2007


                          PRODUCTIVITY AND COSTS BY INDUSTRY:
                 SELECTED SERVICE-PROVIDING AND MINING INDUSTRIES, 2005


      The Bureau of Labor Statistics of the U.S. Department of Labor reported today on 
productivity and costs for selected service-providing and mining industries in 2005.  
Labor productivity, defined as output per hour, rose in approximately two-thirds of the 42 
industries studied, about the same as in 2004.  Unit labor costs declined in 17 out of 42 
industries.  Over the long term period of 1987 to 2005, labor productivity increased in 
more industries than in 2005, and unit labor costs declined in fewer. //PRIN ZUNI3PO Test 03252021//

      Productivity and cost measures for three new industries are presented here for the 
first time: employment placement agencies (NAICS 56131), amusement and theme parks 
(NAICS 71311), and bowling centers (NAICS 71395).  Productivity data for the 
manufacturing, retail trade, wholesale trade, and food services and drinking places 
industries are published in separate releases and can be accessed online at 
http://www.bls.gov/schedule/archives/prin_nr.htm.

2004-2005 change

      In 2005, labor productivity increased in 26 of the 38 detailed service-providing 
industries and fell in 12 industries. (See table 1.)  Three industries recorded double-digit 
growth. The biggest increase in output per hour, 34.4 percent, occurred in wireless 
telecommunications carriers (NAICS 5172).  Labor productivity also grew by double 
digits in travel agencies (NAICS 56151), where output per hour increased 12.4 percent, 
and in photofinishing (NAICS 81292), where productivity grew 10.9 percent.  The two 
industries where productivity fell the most, passenger car rental (NAICS 532111) and 
line-haul railroads (NAICS 482111), recorded declines of 6.6 percent and 5.4 percent, 
respectively.
      
      Labor productivity fell 10.1 percent in the mining sector (NAICS 21). Among the 
detailed industries covered, coal mining (NAICS 2121) showed the largest decline, 4.6 
percent.  Nonmetallic mineral mining and quarrying (NAICS 2123) was the only mining 
industry with labor productivity growth, 2.2 percent.  However, BLS does not publish 
every detailed mining industry in the sector; therefore, results for the detailed industries 
shown in the table may not be consistent with the results shown for the sector as a whole.
      
      Unit labor costs, defined as the total labor costs required to produce a unit of 
output, rose in the majority of the service-providing industries.  The biggest increase, 9.2 
percent, occurred in employment placement agencies (NAICS 56131).  However, 15 of 
the 38 detailed service-providing industries reduced unit labor costs.  Unit labor costs fell 
20.2 percent in wireless telecommunications carriers (NAICS 5172) and 11.5 percent in 
travel agencies (NAICS 56151), the two industries where productivity increased the 
most, and 10.7 percent in air transportation (NAICS 481).

      Unit labor costs increased rapidly in the mining sector.  Growth in unit labor costs 
was especially strong in the oil and gas extraction industry (NAICS 211), rising 16.9 
percent in 2005.  Only nonmetallic mineral mining and quarrying (NAICS 2123), the sole 
mining industry with productivity growth, recorded a reduction in unit labor costs of 2.9 
percent.

Long-term trends

      Between 1987 and 2005, labor productivity in the detailed service-providing 
industries increased in 33 industries and fell in 5 industries. Software publishers (NAICS 
5112) recorded the fastest productivity growth over the period, 17.0 percent per year on 
average, followed by wireless telecommunications carriers (NAICS 5172) with average 
annual growth of 9.6 percent.  Two industries in the transportation sector, used household 
and office goods moving (NAICS 48421) and couriers and messengers (NAICS 492), had 
the largest labor productivity declines, falling an average of 1.0 percent per year in both 
industries.
      
      Labor productivity in the mining sector (NAICS 21) grew 0.6 percent per year on 
average from 1987 to 2005.  All four detailed mining industries experienced productivity 
gains. Both coal mining (NAICS 2121) and metal ore mining (NAICS 2122) recorded 
average annual growth of 3.4 percent, which was the highest among the mining 
industries.
      
      Unit labor costs among the detailed service-providing industries increased in 28 
industries and declined in 10 industries.  Funeral homes and funeral services (NAICS 
81221) experienced the largest growth, 4.6 percent per year, followed by couriers and 
messengers (NAICS 492) with average annual growth of 4.4 percent. The most rapid 
declines in unit labor costs occurred in the two industries with the fastest productivity 
growth.  Software publishers (NAICS 5112) reduced unit labor costs an average 10.0 
percent per year and wireless telecommunications carriers (NAICS 5172) showed a 
decline of 6.3 percent.
      
      Unit labor costs for the mining sector increased at an average annual rate of 4.0 
percent between 1987 and 2005, led by an increase of 5.1 percent in oil and gas 
extraction (NAICS 211). Only coal mining (NAICS 2121) reduced unit labor costs, 
which fell an average 0.7 percent per year.


                                     Technical Note

Output

      Industry output is measured as sectoral output, the total value, in real terms, of 
goods and services produced for sale outside the industry.  Real industry output is most 
often derived by deflating nominal sales or value of production, but for some industries it 
is measured by physical quantities of output. Wherever possible, the indexes of industry 
output are calculated with a Törnqvist formula.  This formula aggregates the growth rates 
of the various industry outputs between two periods, using their relative shares in 
industry value of production, averaged over the two periods, as weights.
      
      Industry output measures for service-providing and mining industries are 
constructed primarily using data from the economic censuses and annual surveys of the 
Bureau of the Census, U.S.  Department of Commerce, together with information on 
price changes primarily from BLS.  Other data sources include the U.S. Department of 
Transportation, the U.S. Department of Energy, the U.S. Geological Survey of the U.S. 
Department of the Interior, the U.S. Postal Service, the Federal Deposit Insurance 
Corporation, and the Postal Rate Commission.

Labor Hours

      The industry labor input measures represent the hours of all workers in the 
industry.  The primary source of data on employment and hours is the BLS Current 
Employment Statistics (CES) survey, which provides monthly data on the number of jobs 
held by wage and salary workers employed directly in nonfarm establishments.  The CES 
survey also provides data on the average weekly hours of production and nonsupervisory 
workers in these establishments. 

      Data from the BLS Current Population Survey (CPS) are used to supplement the 
CES data.  The Division of Industry Productivity Studies (DIPS) estimates the average 
weekly hours of supervisory and nonproduction workers for each industry using data 
from the CPS together with the CES data.  CPS data are also used to estimate the 
employment and hours of self-employed and unpaid family workers in most of the 
service-providing industries. The hours of nonsupervisory workers, supervisory workers, 
and self-employed and unpaid family workers are treated as homogeneous and are 
directly aggregated.

      Other sources of employment and hours data for service industries include the 
American Association of Railroads, the U.S. Department of Transportation, and the U.S. 
Postal Service.

Labor Productivity

      The industry labor productivity measures describe the relationship between output 
and the labor time involved in its production.  They show the changes from period to 
period in the amount of goods and services produced per hour.  Industry output per hour 
indexes are prepared from data published by various public and private agencies, using 
the greatest level of industry detail available.

      Although the labor productivity measures relate output to hours of employees or 
all persons engaged in an industry, they do not measure the specific contribution of labor, 
capital, or any other factor of production.  Rather, they reflect the joint effects of many 
influences, including changes in technology; capital investment; level of output; 
utilization of capacity, energy, and materials; the use of purchased services inputs, 
including contract employment services; the organization of production; managerial skill; 
and the characteristics and effort of the workforce.

      Long-term trends tend to be more reliable indicators of the performance of an 
industry than are the year-to-year changes.  The annual changes in an industry’s output 
and use of labor may reflect cyclical changes in the economy as well as long-term trends.  
Also, annual productivity indexes are based on sample data, which are likely to differ 
from data generated by a census of establishments in the industry.  

Unit Labor Costs
 
      The unit labor cost series represents the cost of labor input required to produce 
one unit of output.  The indexes of unit labor costs for each industry are computed by 
dividing an index of industry labor compensation by an index of industry output.  
Compensation, defined as payroll plus supplemental payments, is a measure of the cost to 
the employer of securing the services of labor.  Payroll includes salaries, wages, 
commissions, dismissal pay, bonuses, vacation and sick leave pay, and compensation in 
kind.  Supplemental payments include legally required expenditures and payments for 
voluntary programs.  The legally required portion consists primarily of Federal old age 
and survivors’ insurance, unemployment compensation, and workers’ compensation.  
Payments for voluntary programs include all programs not specifically required by 
legislation, such as the employer portion of private health insurance and pension plans.

New Industries

      The introduction of productivity and cost measures for several new industries 
reflects the ongoing BLS effort to expand productivity measurement of the service-
providing industries.  The measurement of industry productivity and costs for these new 
industries follows standard BLS methods, as described above, wherever possible.  To 
construct output measures for the employment placement agencies industry (NAICS 
56131), annual industry receipts were deflated with BLS producer price indexes (PPIs).  
The labor productivity measures for this industry begin in 1994 because no PPIs or other 
appropriate price series are available to deflate revenues prior to 1994.  For amusement 
and theme parks (NAICS 71311) and bowling centers (NAICS 71395), detailed receipts 
were deflated with detailed price indexes from the Consumer Price Index (CPI) program.

Notes

      The measures in this news release replace the mining, utilities, and service 
industry series published in the news release Productivity and Costs by Industry, Selected 
Service-Providing and Mining Industries, 2004 (released July 12, 2006), and in table 51 
of the Monthly Labor Review.  All of the measures for 2005 in this release are 
preliminary and subject to revision.

      Published productivity and unit labor cost indexes for selected NAICS industries, 
including the industries covered in this report, can be accessed electronically by visiting 
the Labor Productivity and Costs Web site: http://www.bls.gov/lpc/home.htm.  While the 
index numbers and rates of change reported by BLS in this news release are rounded to 
one decimal place, all percent changes in this release and on the BLS web site are 
calculated using index numbers to three decimal places, as found on the web site.

      Additional related measures for detailed service-providing industries, including 
industry employment, annual hours, the net value of production, and the implicit price 
deflator for output can be obtained by sending an email request to dipsweb@bls.gov, or 
by calling the Division of Industry Productivity Studies (202-691-5618). 

      Material in this report is in the public domain and, with appropriate credit, may be 
used without permission.  Information in this report will be made available to sensory-
impaired individuals upon request.  Voice phone: 202-691-5618; TDD message referral 
phone number: 1-800-877-8339.


Table 1.   Percent change in output per hour, output, hours, compensation, and unit labor costs, 2004-2005

                                                                                     Percent change, 2004-2005
                                                                          ------------------------------------------------
                                                               2005
  NAICS                       Industry                       Employment   Output                      Labor      Unit labor
  code                                                      (thousands)  per hour  Output  Hours   compensation    costs

                          Mining Industries

21        Mining                                                562       -10.1     -2.1     8.9       16.7         19.1
211           Oil and gas extraction                            126        -3.4     -3.6    -0.2       12.7         16.9
212           Mining, except oil and gas                        213        -1.9      3.5     5.5        9.8          6.1
2121              Coal mining                                    74        -4.6      1.7     6.6       14.8         12.9
2122              Metal ore mining                               29        -4.3     -1.6     2.9       11.6         13.4
2123              Nonmetallic mineral mining and quarrying      110         2.2      7.8     5.4        4.6         -2.9

                    Service-Providing Industries

                              Utilities

2211      Power generation and supply                           401         6.2      5.2    -1.0        1.3         -3.7
2212      Natural gas distribution                              107         4.4     -1.0    -5.1        1.9          2.9

                   Transportation and Warehousing

481       Air transportation                                    472         7.7      5.3    -2.2       -6.0        -10.7
482111    Line-haul railroads                                   182        -5.4      0.2     5.9        5.5          5.4
48412     General freight trucking, long-distance               901         1.7      5.1     3.3        8.2          3.0
48421     Used household and office goods moving                106        -0.2      5.4     5.6        4.2         -1.2
491       Postal service                                        774         1.1      1.2     0.2        3.4          2.2
492       Couriers and messengers                               612        -1.7     -0.6     1.2        0.7          1.2

                             Information

511       Publishing                                            953         4.1      3.6    -0.6        4.5          0.9
5111          Newspaper, book, and directory publishers         714         1.6      0.5    -1.1        3.3          2.8
5112          Software publishers                               239         6.5      7.6     1.1        6.2         -1.3
51213     Motion picture and video exhibition                   135        -1.1     -6.6    -5.5       -1.8          5.1
515       Broadcasting, except internet                         341         4.6      6.6     1.9        8.7          2.0
5151          Radio and television broadcasting                 249         5.1      5.1     0.0        6.2          1.1
5152          Cable and other subscription programming           92         2.4      9.1     6.5       17.6          7.8
5171      Wired telecommunications carriers                     519         4.7     -1.8    -6.1       -4.2         -2.4
5172      Wireless telecommunications carriers                  194        34.4     28.2    -4.6        2.3        -20.2
5175      Cable and other program distribution                  137        -2.9      5.4     8.5       14.0          8.1

                        Finance and Insurance

52211     Commercial banking                                   1296        -0.1      2.2     2.4       10.8          8.4

                 Real Estate and Rental and Leasing

532111    Passenger car rental                                  129        -6.6      3.2    10.5        7.7          4.3
53212     Truck, trailer and RV rental and leasing               63         7.3      9.0     1.6        3.0         -5.5
53223     Video tape and disc rental                            151         0.7     -3.0    -3.7       -4.3         -1.4

                 Professional and Technical Services

541213    Tax preparation services                              142         6.9      6.3    -0.6       -0.5         -6.4
54131     Architectural services                                219         4.8     10.9     5.9       12.7          1.6
54133     Engineering services                                  879         5.9     13.3     6.9       10.6         -2.4
54181     Advertising agencies                                  184        -1.4      1.2     2.6        7.2          6.0
541921    Photography studios, portrait                          80         0.4      4.3     3.9        0.3         -3.9

                 Administrative and Support Services

56131     Employment placement agencies                         298        -1.5      3.0     4.6       12.4          9.2
56151     Travel agencies                                       124        12.4      9.2    -2.9       -3.4        -11.5
56172     Janitorial services                                  1146         4.7      5.4     0.7        2.9         -2.4

                  Health Care and Social Assistance

6215      Medical and diagnostic laboratories                   204        -1.4      3.7     5.2        3.5         -0.2
621511        Medical laboratories                              140        -2.7      2.6     5.5        1.9         -0.7
621512        Diagnostic imaging centers                         64         0.9      5.3     4.4        6.8          1.4

                 Arts, Entertainment, and Recreation

71311     Amusement and theme parks                             144         8.4      3.2    -4.8        4.4          1.1
71395     Bowling centers                                        79        -1.7     -3.9    -2.3        1.7          5.8

                   Accommodation and Food Services

7211      Traveler accommodations                              1794        -4.1      0.6     4.9        7.0          6.3

                           Other Services

8111      Automotive repair and maintenance                    1182         0.5      2.2     1.7        5.5          3.3
81211     Hair, nail and skin care services                     909         4.3      4.3     0.0        5.0          0.7
81221     Funeral homes and funeral services                    111         0.3      0.4     0.1        1.5          1.1
8123      Drycleaning and laundry services                      362         9.2      2.7    -5.9       -3.3         -5.9
81292     Photofinishing                                         32        10.9    -14.8   -23.2      -16.6         -2.2


Table 2.  Average annual percent change in output per hour, output, hours, compensation, and unit labor costs, 1987-2005

                                                                        Average annual percent change, 1987-2005
                                                                ---------------------------------------------------------
  NAICS                        Industry                         Output                               Labor      Unit labor
  code                                                         per hour     Output      Hours    compensation      costs

                          Mining Industries

21        Mining                                                  0.6        -0.4        -1.0         3.7           4.0
211           Oil and gas extraction                              1.7        -1.1        -2.7         4.0           5.1
212           Mining, except oil and gas                          2.7         1.1        -1.6         1.3           0.2
2121              Coal mining                                     3.4         0.1        -3.2        -0.6          -0.7
2122              Metal ore mining                                3.4         1.9        -1.5         2.8           0.9
2123              Nonmetallic mineral mining and quarrying        1.6         1.5         0.0         3.3           1.7

                     Service-Providing Industries

                              Utilities

2211      Power generation and supply                             3.1         1.3        -1.8         2.8           1.5
2212      Natural gas distribution                                3.4         1.3        -2.0         3.2           1.9

                    Transportation and Warehousing

481       Air transportation                                      2.9         3.6         0.6         3.4          -0.1
482111    Line-haul railroads                                     4.9         2.5        -2.3         1.0          -1.4
48412     General freight trucking, long-distance                 1.5         3.4         1.8         3.7           0.3
48421     Used household and office goods moving                 -1.0         0.6         1.6         4.4           3.8
491       Postal service                                          1.1         1.2         0.1         4.1           2.8
492       Couriers and messengers                                -1.0         2.4         3.4         6.9           4.4

                             Information

511       Publishing                                              4.3         5.0         0.7         5.8           0.8
5111          Newspaper, book, and directory publishers           0.2        -0.3        -0.5         3.6           3.9
5112          Software publishers                                17.0        25.2         7.1        12.7         -10.0
51213     Motion picture and video exhibition                     0.7         2.0         1.3         3.9           1.9
515       Broadcasting, except internet                           0.9         2.4         1.5         5.4           2.9
5151          Radio and television broadcasting                   0.2         0.5         0.3         4.3           3.8
5152          Cable and other subscription programming            2.4         8.2         5.6        11.5           3.0
5171      Wired telecommunications carriers                       5.1         3.6        -1.5         2.4          -1.1
5172      Wireless telecommunications carriers                    9.6        24.3        13.5        16.5          -6.3
5175      Cable and other program distribution                    0.3         5.8         5.5        10.2           4.2

                        Finance and Insurance

52211     Commercial banking                                      2.2         2.0        -0.2         5.7           3.6

                  Real Estate and Rental and Leasing

532111    Passenger car rental                                    1.0         3.7         2.7         6.8           3.0
53212     Truck, trailer and RV rental and leasing                5.0         4.8        -0.2         3.7          -1.0
53223     Video tape and disc rental                              4.0         6.8         2.7         5.1          -1.6

                 Professional and Technical Services

541213    Tax preparation services                                1.4         4.4         2.9         4.1          -0.2
54131     Architectural services                                  1.8         4.1         2.3         5.9           1.8
54133     Engineering services                                    1.3         3.5         2.1         6.5           2.9
54181     Advertising agencies                                    1.8         1.7         0.0         4.9           3.2
541921    Photography studios, portrait                          -0.3         2.7         3.0         4.9           2.1

                 Administrative and Support Services

56131     Employment placement agencies (1)                       2.6         5.7         3.0         8.9           3.0
56151     Travel agencies                                         4.2         3.3        -0.9         4.7           1.4
56172     Janitorial services                                     2.7         4.6         1.8         5.9           1.3

                  Health Care and Social Assistance

6215      Medical and diagnostic laboratories (1)                 3.9         7.2         3.2         6.0          -1.1
621511        Medical laboratories (1)                            3.0         5.9         2.8         5.1          -0.7
621512        Diagnostic imaging centers (1)                      5.1         9.4         4.1         8.0          -1.3

                 Arts, Entertainment, and Recreation

71311     Amusement and theme parks                              -0.1         2.8         2.9         6.8           3.9
71395     Bowling centers                                         0.0        -1.2        -1.2         1.3           2.6

                   Accommodation and Food Services

7211      Traveler accommodations                                 1.7         2.9         1.1         5.6           2.7

                            Other Services

8111      Automotive repair and maintenance                       1.5         2.6         1.1         4.5           1.9
81211     Hair, nail and skin care services                       2.5         3.5         1.0         5.6           2.0
81221     Funeral homes and funeral services                     -0.6         0.3         0.9         4.9           4.6
8123      Drycleaning and laundry services                        1.2         0.6        -0.7         3.0           2.5
81292     Photofinishing                                          0.9        -4.3        -5.2        -1.1           3.4


(1) For NAICS industries 56131, 6215, 621511, and 62512, average annual percent changes cover 1994-2005.


Last Modified Date: March 25, 2021