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Economic News Release
PRINT:Print

Total Factor Productivity in Major Industries News Release

For release 10:00 a.m. (ET) Thursday, November 19, 2020	USDL-XX-XXXX
Technical information:(202) 691-5606 • productivity@bls.gov • www.bls.gov/mfp
Media contact:	      (202) 691-5902  • PressOffice@bls.gov

TOTAL FACTOR PRODUCTIVITY IN MAJOR INDUSTRIES – 2019 

Total factor productivity rose in 12 of the 20 industries measured in 2019,
the U.S. Bureau of Labor Statistics (BLS) reported today.  The largest annual
increases were in the mining, management of companies and enterprises, and 
utilities industries, with increases of 4.2 percent, 3.7 percent, and 3.0 
percent, respectively. (See chart 1 and table 1). In 2018, total factor 
productivity (TFP) increased in 14 of the 20 industries. 

Total factor productivity is defined as output per unit of combined inputs. 
TFP shows the relationship between real output and changes in the combined 
inputs of capital services, labor input, and intermediate purchases (energy,
materials, and purchased services) used in producing that output. It reflects
a variety of factors that influence economic growth not specifically 
accounted for among measured inputs, including: technological change, 
changes in the organization of production, and other efficiency 
improvements.  

The TFP increase in 2019 was dispersed among the 20 major industries measured.
TFP increases are most often achieved by the change in output outpacing the 
change in combined inputs, as with the mining industry in 2019 when output 
increased 6.5 percent and combined inputs increased 2.2 percent leading to 
an increase in TFP of 4.2 percent. However, TFP increases can also be 
achieved when the change in combined inputs declines more than the change
in output, as was the case with utilities. For this industry, combined inputs
declined 4.7 percent and output declined 1.8 percent, leading to a TFP 
increase of 3.0 percent. TFP declines occurs when the change in output is
less than of the change in combined inputs. Wholesale trade experienced 
the largest TFP decline in 2019 (-2.2 percent) as output declined 2.1 percent
and combined inputs grew at 0.1 percent.  
 
Total factor productivity and KLEMS as sources of labor productivity trends
Total factor productivity annual measures differ from BLS quarterly labor 
productivity, or output per hour measures, because the former also includes 
information on capital intensity, shifts in the composition of the workforce,
energy, materials, and purchased services. Labor productivity relates output
to only hours worked and is equal to total factor productivity plus the 
effects of factor substitution. Thus, an increase in labor productivity can 
be expressed as the sum of six components: 

•Total factor productivity (TFP)       •Contribution of energy (E)
•Contribution of capital intensity (K) •Contribution of materials (M)
•Contribution of labor composition (L) •Contribution of purchased services (S)

The contribution of each KLEMS input is definied as the ratio of the weighted
services provided by that input to hours worked in the production process. 
By examining input contributions the substitution effect of increased use of
an input on an industry’s labor producitivty can be measured.  

Chart 2 illustrates sources of labor productivity trends in 2019 for each 
industry. The information industry had the largest increase in labor 
productivity in 2019, increasing 6.6 percent, driven by an increase in 
capital of 2.9 percent. While the education industry had the largest decline
in 2019, decreasing 3.5 percent, driven by a 2.4-percent decline in services. 

TFP and input contributions to output 

The nation's output growth can be viewed as the sum of three components:
total factor productivity, and the contributions of capital services and 
labor input. In the most recent business cycle (2007-2019) the deceleration
of output was mainly driven by the deceleration in TFP and a modest 
deceleration of the use of capital services. 

Industry level data can be used to further explain any changes in the private
business sector output. Chart 4 aggregates industries into one of four 
sectors: goods producing, information communication technologies (ITC) 
finance, insurance, and real estate (FIRE); and service producing. 
(See technical note for industry makeup.)

TFP contribution

The contribution of total factor productivity growth to private business
output growth has declined from 1.12 percentage points in 2000-2007 to 0.33
percentage points in 2007-2019. This decline can be attributed to negative
contribution from manufacturing industries within the goods producing sector 
and a steep decline in ICT TFP contribution. Within ICT, computer and 
electronic products TFP has slowed substantially and now only contributes 
0.06 percentage points to private business output growth compared to 0.24 
percentage points in the previous business cycle.

Capital contribution

Capital services contribution to output growth gradually declined over the 
three business cycles, declining from 1.39 percentage points in 1990-2000 to 
0.83 percentage points in the current business cycle. The decline in the 
contribution of capital from both the services industry and the finance, 
insurance, and real estate (FIRE) sectors are the main drivers – as the fall
out of the financial crisis and housing collapse during the 2007-2009 period
impacted this sector.

Labor contribution
During the 2000-2007 business cycle, the contribution of labor input to
private business output growth declined over a full percentage point from
1.34 to just 0.23 percentage points. During the 2000-2007 business cycle 
labor input contributed -0.13 percentage points in goods producing industries
and -0.13 percentage points for ICT industries. During the 2007-2019 business
cycle labor input only contributed -0.01 percentage points to goods producing
industreis and 0.05 percentage points to ICT industries. 


Technical Notes 

Information and computer technologies (ICT) Sector 

Information and computer technologies (ICT) is made up of the following 
industries (and removed from their usual category), NAICS 334 (Computer 
and electronic products), NAICS 517 (Telecommunications), NAICS 5415 
(Computer systems design and related services), and NAICS 51 (Information)
except traditional paper publishers. This definition is generally comparable
to that used by the Organization for Economic Cooperation and Development 
(OECD), which defines the ICT sector using the International Standard 
Industrial Classification (ISIC) (OECD 2011).

Capital Services 

Data on investment for fixed assets are obtained from BEA. Data on 
inventories are estimated using data from BEA and additional information
from IRS Corporation Income Returns. Data for land in the farm industry 
are obtained from USDA. Nonfarm industry detail for land is based on IRS
book value data. Current-dollar value-added data, obtained from BEA, are
used in estimating capital rental prices. 

Labor Input 

Hours at work data reflect Productivity and Costs data as of the September
3, 2020 “Productivity and Costs” news release (USDL-20-1649). The growth 
rate of labor composition is defined as the difference between the growth 
rate of weighted labor input and the growth rate of the hours.

Intermediate Inputs 

Data on intermediate inputs are obtained from BEA based on BEA annual 
input-output tables. Tornqvist indexes of each of these three input classes
are derived at the NAICS industry level and then aggregated to the 
industries. Materials inputs are adjusted to exclude transactions between
establishments within the same industry.
	
Sectoral Output 


The output concept used to measure total factor productivity for industries
is “sectoral output”. Sectoral output equals gross output (sales, receipts,
and other operating income, plus commodity taxes plus changes in 
inventories), excluding transactions between establishments within the
same industry. This is not the same output measure used for private
business and private nonfarm business is “real value-added output”, 
described below in “Real Value-Added Output” section. 

Industry output measures for 2018 and earlier years are constructed 
primarily using data from the economic censuses and annual surveys of
the U.S. Census Bureau together with data on price changes primarily
from BLS. These measures have been revised due to new and revised data
from the Bureau of Economic Analysis, used in part to construct 
intra-industry transactions. Manufacturing industry output for 2019 is 
estimated based on historical relationships between BLS industrial 
output, BLS price indexes, and data on industrial production from the
Federal Reserve Board. Data from the Quarterly Services Survey from 
the Census Bureau are used to construct preliminary output measures 
for 2019 for some industries.

Real Value-Aded Output Concept Used for Private Business and 
Private Nonfarm Business Sectors

Real value-added output in private business equals gross domestic 
product less general government, government enterprises, private 
households (including the rental value of owner-occupied real estate),
and non-profit institutions. Real value-added output excludes intermediate
transactions between businesses.

Other information 

Comprehensive tables containing more detailed data than that which 
is published in this press release are available upon request at 
202-691-5606 or at www.bls.gov/mfp/mprdload.htm. Industry specific 
contributions to output are available at 
www.bls.gov/mfp/contributions-to-output.htm.

More detailed information on methods, limitations, and data sources
of capital and labor are provided in BLS Bulletin 2178 
(September 1983), Trends in Multifactor Productivity, 1948-81 and
on the BLS Multifactor Productivity website under the title 
“Technical Information About the BLS Multifactor Productivity Measures”
for Major Industrys and 18 NAICS industry Manufacturing Industries at
www.bls.gov/mfp/mprtech.pdf. 

General information is available on the BLS Multifactor Productivity
website at www.bls.gov/mfp/mprover.htm. Additional data not contained
in the release can be obtained in print or at www.bls.gov/mfp. 
A number of comprehensive tables set up as zip files can be obtained
at www.bls.gov/mfp/mprdload.htm. Methods for measuring manufacturing
multifactor productivity are discussed in the July 1995 issue of the
Monthly Labor Review, "Measurement of productivity growth in U.S. 
manufacturing”. See www.bls.gov/mfp/mprgul95.pdf.


Table 1. Total factor productivity and related data, 2019
Industry2012 NAICS CodePercent change
TFPOutputCombined InputsCapital InputLabor InputIntermediate Inputs[1]

Agriculture,forestry,fish,and hunting

11-0.30.50.80.21.31.1

Mining

214.56.51.90.44.92.4

Utilities

223.0-1.8-4.72.5-1.8-11.3

Construction

23-1.4-0.70.73.32.5-1.4

Manufacturing

31-33-1.6-1.10.51.7-0.10.1

Durable manufacturing

321,327,33-1.2-0.60.61.5-0.10.7

Nondurable manufacturing

31,322-326-1.7-1.50.22.0-0.1-0.4

Wholesale trade

42-2.1-2.10.03.20.6-2.1

Retail trade

44,451.72.30.52.1-1.61.9

Transportation and warehousing

48-490.02.12.13.73.8-0.3

Information

511.76.24.47.30.24.3

Finance and insurance

52-1.11.93.03.50.65.9

Real estate and rental and leasing

530.42.82.42.12.62.6

Professional and technical services

541.53.72.25.22.11.2

Management of companies

553.96.32.30.40.94.7

Admin and waste services

561.13.52.43.20.25.2

Educational services

61-0.50.10.62.53.1-1.5

Health care and social assistance

620.72.31.73.02.01.2

Arts,entertainment, and recreation

711.52.10.53.4-2.51.9

Accommodation and food services

72-0.11.51.61.51.71.5

Other services, except government

811.3-0.8-2.21.4-1.0-3.6

[1] Intermediate inputs is an aggregation of energy, materials and services


Table 2. Total Factor Productivity Intermediate Inputs, 2019
Industry2012 NAICS CodePercent change
Energy InputMaterials InputServices Input

Agriculture,forestry,fish,and hunting

11-7.23.00.8

Mining

21-1.2-3.56.5

Utilities

22-14.82.2-9.2

Construction

23-6.7-1.2-0.9

Manufacturing

31-33-8.70.21.0

Durable manufacturing

321,327,33-12.41.30.4

Nondurable manufacturing

31,322-326-6.0-1.02.6

Wholesale trade

42-10.00.0-2.0

Retail trade

44,45-8.0-1.03.0

Transportation and warehousing

48-49-8.010.90.0

Information

51-2.91.55.2

Finance and insurance

52-2.30.76.3

Real estate and rental and leasing

53-1.4-0.23.3

Professional and technical services

54-7.6-1.21.9

Management of companies

55-2.3-2.05.7

Admin and waste services

561.73.15.9

Educational services

61-13.85.6-2.2

Health care and social assistance

62-5.7-0.62.0

Arts,entertainment, and recreation

71-3.7-1.83.1

Accommodation and food services

72-6.4-0.83.1

Other services, except government

81-13.0-3.2-3.5

Table 3. Total factor productivity and related data, 1987-2019
Industry2012 NAICS CodeAverage annual percent change
TFPOutputCombined InputsCapital InputLabor InputIntermediate Inputs[1]

Agriculture,forestry,fish,and hunting

111.21.20.10.30.0-0.1

Mining

211.62.00.4-0.10.31.8

Utilities

220.71.40.61.7-0.40.1

Construction

23-0.70.51.33.01.40.9

Manufacturing

31-330.71.50.72.3-0.40.8

Durable manufacturing

321,327,331.42.00.72.2-0.40.9

Nondurable manufacturing

31,322-326-0.10.70.72.4-0.40.5

Wholesale trade

421.13.62.53.40.74.0

Retail trade

44,451.13.01.93.70.62.8

Transportation and warehousing

48-490.72.82.11.91.72.6

Information

510.85.14.36.50.85.1

Finance and insurance

520.02.92.95.01.53.2

Real estate and rental and leasing

53-0.13.13.23.01.43.9

Professional and technical services

540.44.03.67.22.64.8

Management of companies

550.13.02.92.81.45.5

Admin and waste services

560.34.44.16.72.85.6

Educational services

61-0.23.94.14.66.53.1

Health care and social assistance

62-0.53.43.84.43.44.1

Arts,entertainment, and recreation

710.33.53.22.92.14.4

Accommodation and food services

720.32.32.02.01.82.4

Other services, except government

81-0.21.92.12.51.23.1

[1] Intermediate inputs is an aggregation of energy, materials and services


Table 4. Total Factor Productivity Intermediate Inputs, 1987-2019
Industry2012 NAICS CodeAverage annual percent change
Energy InputMaterials InputServices Input

Agriculture,forestry,fish,and hunting

110.10.7-0.5

Mining

210.32.31.8

Utilities

22-0.5-0.52.6

Construction

232.21.4-0.6

Manufacturing

31-33-2.21.30.4

Durable manufacturing

321,327,33-3.71.50.2

Nondurable manufacturing

31,322-326-1.10.60.7

Wholesale trade

421.43.04.2

Retail trade

44,450.32.73.0

Transportation and warehousing

48-490.43.73.3

Information

511.84.16.1

Finance and insurance

523.40.63.3

Real estate and rental and leasing

539.50.54.1

Professional and technical services

541.25.14.8

Management of companies

553.510.25.2

Admin and waste services

560.54.46.3

Educational services

611.83.33.1

Health care and social assistance

620.52.05.4

Arts,entertainment, and recreation

712.55.34.4

Accommodation and food services

721.8-0.24.7

Other services, except government

81-1.02.43.8

Table 5. Sources of labor productivity, 2019
Industry2012 NAICS CodePercent ChangePercentage Point
Labor ProductivityTFPCapital IntensityLabor CompositionEnergy IntensityMaterials IntensityServices Intensity

Agriculture,forestry,fish,and hunting

11-0.4-0.3-0.30.1-0.30.40.0

Mining

214.74.5-0.60.5-0.1-0.71.0

Utilities

22-0.13.01.60.0-3.30.2-1.4

Construction

23-3.1-1.40.10.0-0.2-1.3-0.3

Manufacturing

31-33-0.9-1.60.50.0-0.10.10.2

Durable manufacturing

321,327,33-0.6-1.20.40.0-0.10.40.1

Nondurable manufacturing

31,322-326-1.0-1.70.60.1-0.1-0.20.4

Wholesale trade

42-2.4-2.10.70.1-0.10.0-1.0

Retail trade

44,453.91.70.50.0-0.10.01.7

Transportation and warehousing

48-49-2.20.0-0.1-0.3-1.00.3-1.2

Information

516.31.72.90.10.00.11.4

Finance and insurance

521.5-1.10.90.10.00.01.6

Real estate and rental and leasing

530.80.40.00.0-0.2-0.10.5

Professional and technical services

541.41.50.3-0.10.0-0.2-0.1

Management of companies

556.23.90.00.50.0-0.11.9

Admin and waste services

563.91.10.30.30.00.31.8

Educational services

61-3.1-0.5-0.1-0.1-0.40.2-2.2

Health care and social assistance

620.80.70.10.2-0.1-0.30.1

Arts,entertainment, and recreation

714.21.51.1-0.20.00.01.7

Accommodation and food services

720.2-0.10.00.2-0.2-0.20.5

Other services, except government

810.11.30.10.0-0.1-0.3-0.8

Table 6. Industry Contributions[1] to Private Business Output by component
Industry2012 NAICS CodePercentage Point, 1990-2000
TFPCaptialLabor

Goods producing industries[2]

11-33-0.0160.2650.164

Agriculture, Forestry, Fishery, and hunting

110.055-0.0060.004

Mining

210.010-0.004-0.017

Utilities

22-0.0240.021-0.009

Construction

23-0.0590.0400.121

Manufacturing

MN0.5740.2890.074

Durable Manufacturing[2]

DM0.5190.1630.067

Nondurable Manufacturing

NM0.0550.1260.007

ICT

51*0.4890.2400.174

Information[3]

51-0.0740.2010.102

FIRE

52-53-0.0300.4440.167

Finance and insurance

520.0890.2290.152

Real estate and rental and leasing

53-0.1190.2140.015

Services

42-49,54-810.4580.4370.835

Wholesale trade

420.2570.0900.062

Retail trade

44, 450.2480.0710.081

Transportation and Warehousing

48-490.0780.0240.076

Professional and technical services[4]

54-0.0670.0760.253

Management of companies

55-0.0180.0070.028

Admin and waste services

56-0.0220.0380.137

Educational services

610.0100.0020.011

Health care and social assistance

62-0.1090.0470.155

Arts, entertainment, and recreation

71-0.0030.0150.017

Accommodation and food services

720.0290.0230.050

Other services, except government

810.0440.0070.028

[1] Contributions may not sum due to aggregation, rounding, and integration of the top line to industry

[2] Goods producing except for Computer and electronic products (NAICS 334)

[3] Information and communication technology sector (NAICS 51), less publishing industries (NAICS 5111), plus computer and electronic products (NAICS 334) and Computer systems design and related services (NAICS 5415)

[4] Service providing sector, except for Computer systems design and related services (NAICS 5415)


Table 7. Industry Contributions[1] to Private Business Output by component
Industry2012 NAICS CodePercentage Point, 2000-2007
TFPCaptialLabor

Goods producing industries[2]

11-330.2850.170-0.128

Agriculture, Forestry, Fishery, and hunting

110.0180.010-0.008

Mining

210.054-0.0040.017

Utilities

220.0710.020-0.007

Construction

23-0.1740.0520.075

Manufacturing

MN0.5600.111-0.269

Durable Manufacturing[2]

DM0.4650.039-0.186

Nondurable Manufacturing

NM0.0950.072-0.083

ICT

51*0.5420.153-0.085

Information[3]

510.2940.191-0.065

FIRE

52-530.0130.3170.095

Finance and insurance

52-0.0070.1790.073

Real estate and rental and leasing

530.0200.1370.022

Services

42-49,54-810.2810.4580.346

Wholesale trade

420.1130.0710.010

Retail trade

44, 450.0780.086-0.008

Transportation and Warehousing

48-490.0680.0170.004

Professional and technical services[4]

540.0220.1080.122

Management of companies

55-0.0180.0060.003

Admin and waste services

560.0900.0390.028

Educational services

61-0.0170.0080.038

Health care and social assistance

62-0.0030.0380.151

Arts, entertainment, and recreation

71-0.0050.0110.004

Accommodation and food services

720.0160.0100.032

Other services, except government

81-0.0580.0080.007

[1] Contributions may not sum due to aggregation, rounding, and integration of the top line to industry

[2] Goods producing except for Computer and electronic products (NAICS 334)

[3] Information and communication technology sector (NAICS 51), less publishing industries (NAICS 5111), plus computer and electronic products (NAICS 334) and Computer systems design and related services (NAICS 5415)

[4] Service providing sector, except for Computer systems design and related services (NAICS 5415)


Table 8. Industry Contributions[1] to Private Business Output by component
Industry2012 NAICS CodePercentage Point, 2007-2019
TFPCaptialLabor

Goods producing industries[2]

11-33-0.0920.183-0.011

Agriculture, Forestry, Fishery, and hunting

110.0330.0030.003

Mining

210.0910.0200.009

Utilities

220.0340.0310.002

Construction

23-0.0640.004-0.006

Manufacturing

MN-0.1280.138-0.030

Durable Manufacturing[2]

DM0.0060.048-0.029

Nondurable Manufacturing

NM-0.1340.089-0.001

ICT

51*0.1870.2270.045

Information[3]

510.1030.245-0.008

FIRE

52-530.0620.1430.061

Finance and insurance

52-0.0470.0830.047

Real estate and rental and leasing

530.1090.0600.014

Services

42-49,54-810.1680.2770.391

Wholesale trade

42-0.0380.0540.005

Retail trade

44, 450.0350.0300.002

Transportation and Warehousing

48-49-0.0020.0230.048

Professional and technical services[4]

540.1120.0440.138

Management of companies

550.0460.0040.047

Admin and waste services

560.0210.0220.034

Educational services

61-0.0040.0080.010

Health care and social assistance

620.0280.0380.118

Arts, entertainment, and recreation

710.0100.0080.004

Accommodation and food services

720.0030.0100.041

Other services, except government

81-0.0190.0030.007

[1] Contributions may not sum due to aggregation, rounding, and integration of the top line to industry

[2] Goods producing except for Computer and electronic products (NAICS 334)

[3] Information and communication technology sector (NAICS 51), less publishing industries (NAICS 5111), plus computer and electronic products (NAICS 334) and Computer systems design and related services (NAICS 5415)

[4] Service providing sector, except for Computer systems design and related services (NAICS 5415)


Last Modified Date: November 16, 2022