4th Quarter '06 - U.S. Productivity and Costs
U.S. Manufacturing Productivity
Below are excerpts pertaining to the manufacturing sector from the 4th Quarter U.S Productivity and Costs release from the BLS. A complete version of the release is available: 4th Quarter 2006 U.S. Productivity and Costs
Manufacturing Productivity
Output and hours in manufacturing, which includes about 12 percent of U.S. business-sector employment, tend to vary more from quarter to quarter than data for the aggregate business and nonfarm business sectors.
Manufacturing productivity grew 2.2 percent in the fourth quarter of 2006 as output declined 1.6 percent and hours fell 3.7 percent (seasonally adjusted annual rates). The decrease in output was the first since the
second quarter of 2003, when output decreased 2.4 percent. In the third quarter, manufacturing productivity had increased 6.3 percent, reflecting a 4.8-percent rise in output and a 1.5-percent decline in hours (table 3). In durable goods manufacturing, productivity rose 3.3 percent in the fourth quarter as output edged down 0.5 percent and hours fell 3.7 percent (table 4). Among nondurable goods manufacturers, productivity rose 0.9 percent in the fourth quarter as output fell 3.0 percent and hours at work fell 3.9 percent (table 5).
In manufacturing, labor productivity rose 3.9 percent in 2006, slightly less than the 4.2-percent average annual rate from 2000 through 2005. Output increased 5.0 percent and hours rose 1.1 percent in 2006 (table B). There was a 6.2-percent increase in durable goods manufacturing productivity in 2006, as output increased 7.6 percent and hours increased 1.3 percent. Output per hour increased 1.5 percent in nondurable goods manufacturing, as output grew 2.2 percent and hours rose 0.7 percent.
Compensation
Average hourly compensation of manufacturing workers increased 7.3 percent in the fourth quarter of 2006, reflecting increases in hourly compensation of 7.9 percent in durable goods manufacturing and 6.1 percent in
nondurable goods manufacturing. When the decrease in consumer prices was taken into account, real hourly compensation in total manufacturing jumped 9.8 percent in the fourth quarter.
The hourly compensation of manufacturing workers increased 4.1 percent in 2006, slightly less than the 4.6-percent growth rate in 2005. In 2006, hourly compensation rose 5.0 percent in durable goods manufacturing and 2.5 percent in nondurable goods manufacturing. Taking into account the rise in consumer prices, real hourly compensation in manufacturing rose 0.9 percent in 2006 after increasing 1.2 percent one year earlier.
Labor Costs
Unit labor costs for the manufacturing sector increased 5.0 percent in fourth-quarter 2006, following declines of 2.9 percent in the third quarter and 8.8 percent in the second quarter. Unit labor costs rose 4.5 percent in durable goods manufacturing and 5.1 percent in nondurable goods industries in the fourth quarter.
Unit labor costs in manufacturing edged up 0.2 percent in 2006, after decreasing 0.1 percent in calendar year 2005. Unit labor costs in durable goods manufacturing decreased 1.2 percent in 2006, similar to the 1.1-percent decline in 2005. Unit labor costs in nondurable goods manufacturing rose 1.0 percent in 2006 and 0.9 percent in 2005.
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