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Multifactor productivity in private nonfarm business

May 25, 2012

Private nonfarm business sector multifactor productivity increased at a 0.5-percent annual rate in 2011. This reflects a 2.4-percent increase in output, and a 1.9-percent increase in the combined inputs of capital and labor (its largest annual rate of growth since 2006).

Compound annual growth rates for multifactor productivity, output, and combined inputs in the private nonfarm business sector for selected periods, 1987–2011
[Chart data]

Multifactor productivity in the private nonfarm business sector grew 0.9 percent annually from 1987 to 2011. This was primarily due to output rising at a 2.8-percent annual rate, faster than the 1.9-percent increase in combined inputs.

For the 2007–2011 period, multifactor productivity grew 0.4 percent as combined inputs fell 0.5 percent, a larger decrease than the 0.1-percent decline in output.

The 2011 gains in output and combined inputs, 2.4 and 1.9 percent respectively, more closely resembled the long-term trend from 1987 to 2011 than during the 2007–2011 period.

These data are from the Multifactor Productivity program. To learn more, see “Preliminary Multifactor Productivity Trends – 2011,” news release USDL-12-0893 (HTML) (PDF). Multifactor productivity measures the change in output per unit of combined capital and labor input. It is designed to measure the joint influences of technological change, efficiency improvements, returns to scale, reallocation of resources, and other factors on economic growth, allowing for the effects of capital and labor.


Bureau of Labor Statistics, U.S. Department of Labor, The Economics Daily, Multifactor productivity in private nonfarm business at (visited July 23, 2024).

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