Manufacturing Productivity Declines in 54 of 86 Industries for 2017

A BLS report shows widespread declines in manufacturing and mining productivity.

A BLS report on Productivity and Costs by Industry shows widespread productivity declines in 2017 for manufacturing and mining industries.

Productivity Synopsis

  • Labor productivity declines were widespread among manufacturing industries in 2017, with decreases in 54 of the 86 four-digit NAICS industries.
  • Of the 51 industries in durable manufacturing, 34 experienced productivity decreases in 2017 led by a decline in the other transportation equipment industry of 11.5 percent.
  • Nondurable manufacturing also experienced widespread declines in 2017 with productivity falling in 20 of 35 industries, led by the sugar and confectionery products industry with a decrease of 8.0 percent.
  • Of the 4 industries in the mining sector, 3 had productivity gains in 2017 led by the oil and gas extraction industry with an increase of 32.6 percent.

Labor Cost Synopsis

  • Unit labor costs, which reflect the total labor costs required to produce a unit of output, rose in 73 of the 86 NAICS 4-digit manufacturing industries.
  • Of the 51 industries in durable manufacturing, 45 experienced rising unit labor costs led by the audio and video equipment manufacturing industry with an increase of 16.8 percent.
  • Nondurable manufacturing also experienced widespread increases in unit labor costs with 28 of the 35 industries recording an increase, led by the apparel accessories and other apparel manufacturing industry with a rise of 13.0 percent.
  • Of the 4 industries in the mining sector, 3 had decreases in unit labor costs led by the oil and gas extraction industry with a decline of 18.6 percent.

Productivity by Industry

Unit Labor Costs vs Productivity

Comments

With the primary exception of the oil and gas industries, it takes more people at greater costs to produce goods in 2017.

The oil and gas industries are an exception due to increases prices for energy.

According to Econoday logic, we should be cheering this set of events. Reality is of course quite a bit different.

Mike "Mish" Shedlock

Comments (7)
No. 1-7
Curious-Cat
Curious-Cat

My understanding is that there are only two ways to grow an economy - increase population or increase productivity. Decreased productivity sounds like shrinking the economy, not good news. Who writes for Econoday?

thimk
thimk

might be a result of very little capital expenditure (upgrade,enhance,replacement) to a more efficient physical plant . Increases in pay aren't matched with increase output

Realist
Realist

Strange that productivity keeps dropping in many areas, considering how technology keeps improving processes every year. Might it be a result of a lack of skilled workers in so many areas?

thimk
thimk

good assumption , maybe a shift to part time work, maybe at takes more hours/dollars to service the robots.

Sechel
Sechel

one theory could be the economy is over-heating and there are simply less ways to increase productivity , a second theory is why should an industry become more competitive when if you're a steel company or an appliance manufacturer you can get the president to slap a tariff or quota