Internet address:
http://stats.bls.gov/mprhome.htm
Historical, technical                       USDL 00-267
information:   (202) 691-5606               For Release: 10:00 AM EST
Media contact: (202) 691-5902               Thursday September 21, 2000

              MULTIFACTOR PRODUCTIVITY TRENDS, 1998

  Private Business, Private Nonfarm Business, and Manufacturing

    The Bureau of Labor Statistics of the U.S. Department of Labor
today reported multifactor productivity data--output per unit of
combined labor and capital inputs--for 1998.  Multifactor productivity
differs from the labor productivity (output per hour) measures that
are published quarterly by BLS.  Multifactor productivity, unlike labor
productivity, requires information on capital services and other data
that are not available on a quarterly basis.  Multifactor productivity
is designed to measure the joint influences on economic growth of
technological change, efficiency improvements, returns to scale,
reallocation of resources, and other factors.

    In the most recent year available, multifactor productivity in the
private business and private nonfarm business sectors changed at the
following percentage rates:

                                                         1997-98
                Private business                           1.5
                Private nonfarm business                   1.5
                                
    Multifactor productivity increased for the seventh consecutive year
in both the private business and private nonfarm business sectors.
The 1998 annual changes are summarized in table A; further detail and
historical measures are shown in tables 1 through 8.

This news release incorporates new data and concepts introduced
in the comprehensive revision to the National Income and Product
Accounts published in October, 1999 by the Bureau of Economic
Analysis of the Department of Commerce.  Measures of output and
capital measures have been revised to include computer software.
Table B and Table 7 of this release have been expanded to provide
additional data on information processing equipment and software.
See page 10 for additional information.

    Chart 1 shows the annual indexes of multifactor productivity,
output per hour worked, and output per unit of capital services
for 1948-1998 for the private business sector.  Output per hour
historically has grown at a faster rate than multifactor
productivity.  This reflects changes in the contribution of capital
intensity (the capital-hours ratio) and changes in the contribution of
labor composition, factors that are controlled for in the multifactor
productivity measures.  However, the short-term fluctuations of
multifactor productivity and output per hour generally move in the same
direction.

    Table A.  Productivity and related data, percent changes,1997-98

                                            Private    Private
                                           Business1   Nonfarm
                                                      Business1
                                                     
     Productivity                                    
       Multifactor Productivity2              1.5        1.5
       Output per hour of all persons         2.7        2.7
       Output per unit of capital services   -0.3       -0.4
                                                     
     Output                                   5.1        5.2
                                                     
     Inputs                                          
       Labor input3                           2.6        2.7
       Capital services                       5.4        5.6
       Combined units of labor                3.5        3.7
       and capital inputs4
                                                     
     Analytic ratio:                                 
       Capital services per hour              3.1        3.1
       of all persons

     1.  Excludes government enterprises.
     2.  Output per unit of combined labor and capital inputs.
     3.  Index of hours worked; hours worked by education and experience
          group are weighted by each group's share of labor compensation.
     4.  Labor input index combined with capital service input index,
          weighted by labor's and capital's shares of nominal output.

Private business and private nonfarm business

    For private business and private nonfarm business, the change
in multifactor productivity reflects the difference between the
change in real gross domestic product for the sector and the change in
labor and capital inputs engaged in the production of this output.
The output measures for private business and private nonfarm business
are similar to the indexes of output for business and nonfarm business
used in the quarterly labor productivity measures.  The difference is
that the output of government enterprises is omitted.

    A change in multifactor productivity reflects the change in
output that cannot be accounted for by the change in combined inputs of
labor and capital.  In contrast, a change in labor productivity reflects
the change in output that cannot be accounted for by the change in hours
of all persons engaged in production.

Changes in 1997-98

  Private business sector

    Multifactor productivity rose 1.5 percent in 1998 or at about
the same rate as in 1996 and 1997 as revised.  Multifactor
productivity has not declined since the recession year of 1991.
The multifactor productivity gain in 1998 reflected a 5.1 percent
increase in output and a 3.5 percent increase in the combined inputs
of capital and labor.  Output growth nearly matched the 1998 rate and
it was the second fastest growth rate since 1984 (tables 1 and 4).
    
    In 1998, for the fourth year in a row, capital services grew
faster than labor input.  Capital services accelerated to a growth rate
of 5.4 percent -- the steepest gain since 1974. Equipment and
inventories grew more rapidly than the other asset categories (table 7).
Equipment posted its largest growth, 9.5 percent, since 1949.  Labor
input continued to grow faster than average for the 1990s, although the
2.6 percent increase was more than a percentage point slower than in
1997. Labor input in 1998 followed the usual pattern of small declines
in the work week and modest increases in the distribution of workers
by educational attainment and work experience.  As a result, employment,
which rose 2.4 percent, accounted for most of the increase in labor
input.
    
    Labor productivity (output per hour worked) increased 2.7 percent
in 1998.   Capital productivity (output per unit of capital services)
fell 0.3 percent.  Capital services per hour jumped 3.1 percent, the
largest gain since 1991.

   Private nonfarm business

    Multifactor productivity in the private nonfarm business sector
increased by 1.5 percent in 1998.  This was the seventh consecutive
year of growth.  Output rose at its fastest rate since 1984, 5.2
percent. The growth of combined units of capital and labor inputs,
3.7 percent, was slower than in 1997, but generally faster than in
the 1990s.  Labor input grew 2.7 percent; most of this growth was due
to increased employment. Capital services continued to accelerate as
it jumped 5.6 percent, the largest gain since 1974. The fastest growing
components of capital services were equipment and of inventories
(table 8).  Equipment posted its steepest gain since 1980.
    
    Labor productivity grew 2.7 percent in 1998.  Capital
productivity dipped 0.4 percent.  In 1998, capital services per hour
increased for the fourth straight year, posting a 3.1 percent gain.

Long-term trends in private business and private nonfarm business

    Labor productivity growth (output per hour) differs from
multifactor productivity (output per unit of combined capital and
labor inputs) in the treatment of both capital and hours.  Labor
productivity measures do not explicitly account for the effects
of capital or shifts in the composition of labor on output growth.
As a result, changes in capital intensity (the capital-hours ratio)
and labor composition can influence labor productivity growth.
However, multifactor productivity (MFP) treats capital as an explicit
factor of production, and so it is computed net of changes in capital
intensity.  In addition, BLS measures labor input as the combined
effect of changes in hours at work and shifts in the educational
attainment and work experience of the work force.  Therefore, MFP is
computed net of changes in labor composition as well.  Long-term labor
productivity growth can be viewed as the sum of three components:
multifactor productivity growth, the contribution of increased
capital intensity, and the contribution of shifts in labor
composition (table B and chart 2).
    
    The contribution of capital intensity equals the change in the
capital-hours ratio multiplied by capital's share of total payments
to inputs.  The contribution of labor composition equals the difference
between the growth rate of labor input and the growth rate of hours
multiplied by labor's share of total payments.  Historically, capital's
share has been slightly less than one-third of the total payments.
    
    From 1948 to 1998, output per hour grew at an annual rate of
2.5 percent in private business (table B).  Of the 2.5 percent growth
rate in labor productivity, 1.4 percent can be attributed to increases
in multifactor productivity, 0.8 percent to the contribution of capital
intensity, and 0.2 percent to changes in labor composition.  Information
processing equipment and software is composed of computers and related
equipment, communications equipment, instruments and photocopying
equipment and software. Investment in these forms of capital were
insubstantial prior to 1979 and so the 0.3 percent per year average
contribution may not be indicative of trends over the entire period.
Information processing capital accounted for almost half of the capital
effects for the entire period.

Table B.  Compound average annual rates of growth in output per hour of
all persons and the contributions of capital intensity, labor
composition, and multifactor productivity, by major sector, 1948 to 1998

(percent per year)
     
                             1948-98 1948-73 1973-79 1979-90 1990-95 1995-98
Private business1                                      
                                                       
Output per hour of all persons  2.5     3.3     1.3     1.6     1.5     2.5
                                                       
Contribution of                 0.8     1.0     0.7     0.7     0.5     0.8
capital intensity2
                                                       
  Contribution of               0.3     0.1     0.3     0.5     0.4     0.8
  information proecessing
  equipment and software3
                                                       
  Contribution of all other     0.6     0.9     0.5     0.3     0.1     0.0
  capital services
                                                       
Contribution of                 0.2     0.2     0.0     0.3     0.4     0.3
labor composition4
                                                       
Multifactor productivity5       1.4     2.1     0.6     0.5     0.6     1.4

Private nonfarm business1          
                                                       
Output per hour of all persons  2.2     2.9     1.2     1.4     1.6     2.3
                                                       
Contribution of                 0.8     0.9     0.7     0.8     0.5     0.8
capital intensity2
                                                       
  Contribution of               0.3     0.1     0.3     0.5     0.4     0.8
  information processing
  equipment and software3
                                                       
  Contribution of all other     0.5     0.7     0.5     0.3     0.1     0.0
  capital services
                                                       
Contribution of                 0.2     0.2     0.0     0.3     0.4     0.3
labor composition4
                                                       
Multifactor productivity5       1.2     1.9     0.4     0.3     0.6     1.3
                                                       
  Contribution of R&D to        0.2     0.2     0.1     0.2     0.2     0.2
  multifactor productivity

1.      Excludes government enterprises.
2.      Growth rate in capital services per hour times capital's share
        of current dollar costs.
3.      Growth rate of information processing equipment and software
        times its share of total costs.
4.      Growth rate of labor composition (the growth rate of labor input
        less the growth rate of the hours of all persons) times labor's
        share of current dollar costs.
5.      Output per unit of combined labor and capital inputs.

Note: The sum of multifactor productivity and the contributions
may not equal labor productivity due to independent rounding.
    
    From 1948 to 1973, multifactor productivity grew at an
average annual rate of 2.1 percent in private business.  These
rates, combined with the 1.0 percent contribution of capital
intensity and the 0.2 percent contribution of labor composition,
resulted in labor productivity growth rates of 3.3 percent in
private business.
    
    Chart 2 shows the post-1973 slowdown.  During the period 1973
to 1979, gains in multifactor productivity slowed to only 0.6
percent per year in private business.  At the same time, the
average annual contribution of capital intensity to labor
productivity growth decreased to 0.7 percent, and labor composition
made no contribution.  Labor productivity, therefore, increased only
1.3 percent per year from 1973 to 1979.
     
    Between 1979 and 1990, labor productivity increased slightly
faster than in the 1973-79 period, but labor productivity growth
still remained slow.  All of the faster labor productivity growth
was the result of changes in the composition of the work force
while multifactor productivity growth and the contribution of
capital services were essentially unchanged from the earlier
period.  Information processing capital began to play an
increasingly important role during this period.  These forms of
capital contributed 0.5 percent per year to labor productivity
growth or nearly three-quarters of the contribution of all
capital services.

     During the 1990-95 period, labor productivity advanced at an
annual rate of 1.5 percent in the private business sector which
was 0.1 percent less than in the 1979-90 period.  The growth rate
of multifactor productivity and the contribution of labor
composition each edged up 0.1 percent per year during the 1990-95
period.  However, the slower contribution from capital services
offset these sources of faster growth.  A reversal in the role of
information processing capital and other capital was nearly
completed by the 1990-95 period.  During this period, information
processing equipment contributed 0.4 percent per year to labor
productivity growth or 80 percent of the contribution of all
capital.  Information processing equipment made almost no
contribution before 1973.  Conversely, other forms of capital
contributed 0.9 percent per year to labor productivity before
1973, but in the 1990-95 period other forms of capital services
contribute just 0.1 percent per year.  Because aggregate capital
intensity did not grow more rapidly after 1990, this reversal can
be viewed as substitution of information processing equipment for
other forms of capital.
    
    The length of the current economic expansion is
unprecedented.  One unusual feature of the expansion is that
productivity growth has accelerated as the expansion has
continued.  During the 1995-98 period, output per hour grew 2.5
percent in private business or 1 percentage point faster than
during the 1990-95 period.  Most of faster growth can be
attributed to faster multifactor productivity growth which more
than doubled from 0.6 percent to 1.4 percent per year.  Larger
contributions from capital services account for the remainder of
the increase.  Information processing equipment accounted for all
of the growth in capital intensity as other forms of capital grew
no faster than hours.  The contribution of labor composition
slowed to 0.3 percent per year from 0.4 percent in the previous
period.
    
    The trends of the various measures in the private nonfarm
business sector were similar to those in the private business
sector in each period.  So, the pattern of the productivity
slowdown after 1973 and modest recovery after 1979 seen in
private business can also be seen in the private nonfarm business
sector.

Contribution of R&D to multifactor productivity in private nonfarm business

    While MFP reflects many influences, it is generally believed
that technological change is one of the primary contributors.
For private nonfarm business, BLS also reports estimates of the
direct effects of firms' spending for research and development
(R&D) on MFP growth within their own industries.  Because many
people associate R&D spending and the resulting technological
improvements with productivity, BLS has not adjusted MFP to
exclude the effects of R&D.  The contribution of R&D averaged 0.2
percent per year for the entire 1948-98 period, accounting for
more than ten percent of multifactor productivity growth (tableB).
The contribution of R&D was 0.2 percent during the 1948-73 period.
It slowed to 0.1 percent during the 1973-79 period, and returned to
0.2 percent for the periods 1979-90, 1990-95 and 1995-98.

Manufacturing

    The BLS multifactor productivity measures (MFP) for manufacturing
differ in several ways from those for private business and private
nonfarm business in their treatment of labor input, output, and classes
of factor inputs.  First, the manufacturing measure of labor input is a
direct aggregate of hours.  This is in contrast to the major sector
measures for which estimates of the effects of changing labor
composition have been developed.
    
    In addition, the output concept used for the data on multifactor
productivity in manufacturing is "sectoral output."  Sectoral output
is similar to gross output, but excludes shipments from one
manufacturing establishment to another.  The resulting multifactor
productivity measure compares what is produced in the manufacturing
sector for use outside of manufacturing with the inputs used in the
manufacturing process obtained from outside of manufacturing.  The
comparison excludes flows between manufacturing establishments from
measures of both output and inputs.
    
    Finally, MFP in manufacturing compares "sectoral output" to
three classes of inputs: 1) hours at work of labor employed
within manufacturing; 2) capital services employed by manufacturing
establishments; and 3) purchases of energy, materials, and business
services from outside of manufacturing (intermediates).
     
    In manufacturing, intermediates are the largest input in
terms of costs.  Furthermore, research has shown that
substitution among inputs, including intermediates, affects
productivity change.  It is therefore important to include
intermediates in productivity measures at the level of
manufacturing.  In contrast, the more aggregate productivity
measures in this release compare "value-added" output with two
classes of inputs, capital and labor.  Because of all these
differences in methods, productivity change in manufacturing
cannot be directly compared with changes in private business or
private nonfarm business.

Manufacturing productivity in 1998 and historical trends

    Multifactor productivity in manufacturing rose 3.1 percent in
1998 (table C).  While multifactor productivity growth slowed
slightly from the 3.4 percent rate recorded for 1997, the
increase was still much larger than the average over the postwar
period (tables 3 and 6).
    
    In 1998, the 3.1 percent gain in multifactor productivity was
the result of a 5.9 percent advance in sector output less a 2.7
percent increase in combined inputs.  Output growth was the most
rapid since 1984.  The pace of growth of combined inputs was
faster than in the previous three years.  After declining 3.0
percent in 1997, energy use rose 5.1 percent in 1998.  Energy
input growth increased at its fastest pace in more than a decade.
Inputs of materials, which declined 0.1 percent in 1997, jumped
5.6 percent in 1998.  Capital services continued to accelerate,
posting a 5.0 advance, the largest increase since 1975.  Hours
declined 0.3 percent, offsetting some of the 1.7 percent increase
in 1997.
    
    Multifactor productivity grew 1.2 percent annually between
1949 and 1998.  Sectoral output increased at a 3.3 percent annual
rate, and combined inputs rose 2.1 percent per year (table C).
Unlike the private business and private nonfarm business sectors,
the productivity slowdown in manufacturing was confined to the
1973-79 period.  Multifactor productivity, which had been growing
1.5 percent annually prior to 1973, fell 0.6 percent per year
between 1973 and 1979.  Since the growth rate of combined inputs
was slower in almost all previous periods, the decline in the
growth rate of productivity is associated mainly with slower
output growth.
    
    Between 1979 and 1990, multifactor productivity growth in
manufacturing rebounded sharply to 1.1 percent per year.
Sectoral output growth continued to slow, and, in this period,
all input growth rates also fell.  Hours declined, and the growth
rates for both capital services and materials fell sharply.  As a
result, combined inputs grew less than 1 percent annually.  The
rebound in productivity was associated mainly with slower growth
in combined inputs.
     
    From 1990 to 1995, multifactor productivity growth
accelerated further, exceeding the pre-1973 growth rate.
Multifactor productivity advanced 1.7 percent per year during
this period.  Output growth nearly doubled to 3.8 percent per
year while combined inputs rose 2.1 percent annually.  The
decline in hours abated, and energy, materials and purchased
business services all grew much more rapidly than in the 1979-90.
    
Table C.  Productivity and related data in manufacturing, percent
changes, 1949-98

(percent per year)
                           1949-  1949-  1973-  1979-  1990-  1995-  1997-
                             98     73     79     90     95     98     98
                                                            
Productivity                                                
  Multifactor productivity1 1.2    1.5   -0.6    1.1    1.7    2.5    3.1
                                                                
    Output per hour         2.7    2.6    2.2    2.6    3.7    4.5    6.2
    of all persons
                                                               
    Output per unit        -0.3    0.0   -2.1   -0.7    0.6    0.5    0.8
    of capital services
                                                               
Sectoral Output             3.3    4.0    2.5    2.0    3.8    4.9    5.9
                                                               
Inputs                                                         
    Hours2                  0.6    1.4    0.3   -0.7    0.0    0.4   -0.3
    Capital services        3.7    4.0    4.7    2.7    3.1    4.4    5.0
    Energy                  2.7    4.9    0.8    0.3    1.1   -0.1    5.1
    Non-energy materials    2.9    2.3    6.2    1.7    4.1    4.1    5.6
    Purchased business      4.0    5.1    5.4    1.7    3.0    2.0    2.2
    services
    Combined inputs3        2.1    2.4    3.2    0.8    2.1    2.3    2.7

1.  Output per unit of combined hours, capital, energy, materials and
    purchased business services inputs.
2.  Hours at work of all persons.
3.  The growth rate of each input is weighted by its share of nominal costs.

    From 1995 to 1998, multifactor productivity advanced 2.5 percent per
year, twice its long-term average.  The rapid productivity gain was
accompanied by a sharp increase in the rate of sectoral output growth to
4.9 percent per year while combined inputs continued to advance at about
the same rate as in the early 1990s.  Hours increased during the 1995-98
period, but the growth rate of capital services at 4.4 percent was most
notable.
    
    Among detailed manufacturing industries, durable goods manufacturers
experienced faster multifactor productivity gains than nondurable goods
manufacturers (table 9).  While little difference exists prior to 1979,
the productivity gap widens thereafter primarily due to the rapid
productivity growth in the two machinery industries.
    
    Over the 1949-98 period, multifactor productivity advanced most
rapidly in textile mill products, industrial machinery and electrical
machinery industries.  The printing and publishing industry is notable
as the only industry to experience a multifactor productivity decline
over the entire period.  In the most recent period, 1995-98,
multifactor productivity in industrial machinery jumped 7.6 percent per
year and electrical and electronic machinery advanced 7.2 percent.
Most information processing equipment other than software is made within
these two industries.  Most other industries grew less than 1.6 percent
per year.
     
Revisions

    Beginning with this release, historical data for multifactor
productivity in all sectors and industries reflect several
important changes and revisions to the data sources used to
develop these series.  In "A Preview of Comprehensive revisions
of the National Income and Product Accounts: Definitional and
Classificational Changes," by Brent Moulton, Robert Parker and
Eugene Seskin, Survey of Current Business, August 1999, the
Bureau of Economic Analysis (BEA) described several important
changes to the national accounts.  The three principal changes
are the treatment of software as an investment rather than an
intermediate good, the redefinition of the value of imputed
services of regulated investment companies and the incorporation
of detailed data from the BLS CPI research series.  A description
of this price index can be found in "CPI Research Series using
Current Methods, 1978-98" Kenneth Stewart and Stephen Reed,
Monthly Labor Review, June 1999.  Real gross domestic product
from these three changes are revised as far back as 1959.
    
    Three types of software were identified: pre-packaged, custom
and own-account software.  Pre-packaged software is developed by
one firm for sale to numerous firms.  Custom software is
developed by one firm for the specific use of another.  Own-
account software is developed by a firm for its own use.  See
Shelby Herman, "Fixed Assets and Consumer Durable Goods," Survey
of Current Business, April 2000 for a description of investment
in software, associated measures and updated measures of fixed
reproducible tangible wealth through 1998.
    
    Private business and private nonfarm business output series
reflect the comprehensive revisions to the National Income and
Product Accounts (NIPAs) announced by the Bureau of Economic
Analysis in October 1999 as well as the annual revisions of July
2000.  Hours data have been revised to reflect the annual
benchmarking of employment derived from the BLS Current
Establishment Statistics survey.
    
    The hours data in this release incorporate the results of the
1998 Hours at Work survey.  This survey is designed to measure
the ratio of hours at work to hours paid for production and
nonsupervisory employees in nonagricultural establishments.  BLS
converts hours paid from the Current Employment Statistics
program to hours at work using data from this survey.  The
results from the 1998 Hours at Work survey can be found on the
web at http://stats.bls.gov/lprlabor.htm or in print.
    
    Labor composition measures have been updated through 1998.  A
brief description, entitled "Changes in the Composition of Labor
for the BLS Multifactor Productivity Measures, 1998," is
available on the BLS website at http://stats.bls.gov/mprlabor.htm
or in print.
    
    Manufacturing output, capital services and purchased business
services also have been revised to incorporate software
investment.  Except for some own-account software, software is
not produced in the manufacturing sector.  Consistency with other
input and factor income measures requires that sectoral output
now include own-account software.  Other software investment is
not part of manufacturing output.  Business services purchased by
manufacturers were revised to remove purchases of software which
are now treated as a capital investment.
    
    Manufacturing transactions now reflect data available from
the BEA's 1992 input-output table (Ann M. Lawson, "Benchmark
Input-Output Accounts for the U.S.," Survey of Current Business,
November 1997) and the 1997 table developed by the Office of
Employment Projections (OEP) of the BLS. (The 1997 table is
developed in a comparable fashion to the 1992 tables described in
"Outlook: 1990-2005", Bulletin 2402, U.S. Department of Labor,
BLS, May 1992, p. 101-102)  Incorporating these tables resulted
in revised data on sectoral output, nonenergy materials and
purchased business services for the years 1988 through 1998.
Measures of these transactions between the 1992 and 1997 input-
output tables are determined by BLS estimates of annual input-
output tables
    
    Small revisions to the manufacturing data for 1972-98 are
based on revised industry price indexes developed by the OEP of
the BLS.  Benchmark intra-industry transactions for 1963-97 are
now based on more detailed input-output tables resulting in small
revisions beginning in 1959.
Summary of Methods

    The following note describes the major data sources and the
procedures used in deriving BLS multifactor productivity indexes.
More detailed information on methods, limitations, and data
sources is provided in BLS Bulletin 2178 (September 1983),
"Trends in Multifactor Productivity, 1948-81."  Methods for
measuring manufacturing multifactor productivity are discussed in
William Gullickson, "Measurement of productivity growth in U.S.
manufacturing," in the July 1995 issue of the Monthly Labor
Review.  Additional data not contained in the release can be
obtained in print or on the BLS web site at
http://stats.bls.gov/mprhome.htm.
    
    This release presents data for the private business, private
nonfarm business, and manufacturing sectors.  The private
business sector, which accounts for about 76 percent of gross
domestic product, includes all of gross domestic product except
the output of general government, government enterprises, non-
profit institutions, the rental value of owner-occupied real
estate, and the output of paid employees of private households.
In addition, the private nonfarm business sector excludes farms,
but includes agricultural services.  Manufacturing sector output
is measured as the value of all production delivered to non-
manufacturing industries plus deliveries to final demand.
    
    These private business, private nonfarm business, and
manufacturing multifactor productivity measures describe the
relationship between output in real terms and the inputs involved
in its production.  They do not measure the specific
contributions of labor, capital, or any other factor of
production.  Rather, multifactor productivity is designed to
measure the joint influences on economic growth of technological
change, efficiency improvements, returns to scale, reallocation
of resources due to shifts in factor inputs across industries,
and other factors.
     
     Private business and private nonfarm business
     
    The multifactor productivity data for private business and
private nonfarm business indexes are derived by dividing an
output index by an index of labor input and capital services.
The output indexes are computed as chained superlative indexes
(Fisher Ideal indexes) of components of real output.  For the
years 1948 to 1998, the Bureau of Economic Analysis (BEA)
supplies the output indexes.  BLS adjusts these to eliminate the
output of government enterprises.
    
    Capital input measures the services derived from the stock of
physical assets and software.  The assets included are fixed
business equipment, structures, inventories, and land.  Among
equipment, BLS provides additional detail for information
processing equipment and software (IPES).  IPES is composed of
four broad classes of assets, computers and related equipment,
software, communications equipment, and other IPES equipment.
Computers and related equipment includes mainframe computers,
personal computers, printers, video displays and other related
equipment.  Software is comprised of pre-packaged, custom and own-
account software.  Communications equipment is not further
differentiated.  Other IPES includes scientific and related
equipment, photocopying and related equipment and office and
accounting equipment.  Structures include nonresidential
structures and residential capital that is rented out by profit-
making firms or persons.  Financial assets are excluded, as are
owner-occupied residential structures.  The aggregate capital
measures are obtained by Tornqvist aggregation of the capital
stocks for each asset type within each of 53 industries using
estimated rental prices for each asset type.  Each rental price
reflects the nominal rate of return to all assets within the
industry and rates of economic depreciation and revaluation for
the specific asset; rental prices are adjusted for the effects of
taxes.  Data on investments in physical assets are obtained from
BEA.  Current-dollar gross product originating (GPO) data,
obtained from BEA, are used in estimating capital rental prices.
This news release makes use of revised GPO data released by BEA
in June 2000.
     
    Labor input in private business and private nonfarm business
is obtained by Tornqvist-aggregation of the hours worked by all
persons, classified by education, work experience, and gender
with weights determined by their shares of labor compensation.
Hours paid of employees are obtained from the Current Employment
Statistics program.  The hours at work of proprietors, unpaid
family workers, and farm employees are derived from the Current
Population Survey.  The hours of employees are converted to an at-
work basis by using the Hours at Work survey.  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 of
all persons. Additional information concerning data sources and
methods of measuring labor composition can be found in BLS
Bulletin 2426 (December 1993), "Labor Composition and U.S.
Productivity Growth, 1948-90."
    
    The labor and capital components of the input indexes are
combined with (Tornqvist) weights that represent each component's
share of total costs.  Total costs are defined as the value of
output (gross product originating) less a portion of indirect
business taxes.  Most indirect taxes such as excise taxes are
excluded from costs; however, property and motor vehicle taxes
remain in total costs.  The index uses changing weights: The
share in each year is averaged with the preceding year's share.
     
     Manufacturing sector and manufacturing industries
     
    The manufacturing multifactor productivity index is derived
by dividing an output index by an index of combined hours,
capital services, energy, materials, and purchased business
services.  The output index for total manufacturing is computed
using a chained superlative index (Tornqvist) of 4-digit SIC
industry outputs.  Industry outputs are developed by BLS from
data obtained from the Annual Survey of Manufactures (ASM) and
the Census of Manufactures (CM) from the Bureau of the Census,
U.S. Department of Commerce, together with Producer Price Indexes
from BLS and price data from BEA.
    
     Labor input in manufacturing is measured as the sum of hours
at work of all persons.  The construction of hours at work
follows the methods used in the private business sector described
above, except that hours in manufacturing are directly aggregated
and do not include the effects of changing labor composition.
Capital inputs in manufacturing are measured using the same
methods and data sources as capital services in private business.
    
    Energy input is constructed using costs and quantity data
from the ASM, the CM, and the Manufacturing Energy Consumption
Survey of the Energy Information Administration, U.S. Department
of Energy, together with BLS Producer Price Indexes.  The series
on non-energy materials input also relies on ASM and CM data.
Indexes of purchased business services are developed by BLS using
input-output tables to estimate the proportion of costs
attributed to nine types of services.  Tornqvist indexes of each
of these three input classes are developed at the 2-digit SIC
level and then aggregated to total manufacturing.  As with the
sectoral output measures, materials ands energy inputs are
adjusted to exclude transactions between establishments within
the same sector.
     
    
    The five input indexes (capital services, hours, energy,
materials, and purchased business services) are combined using
Tornqvist aggregation, employing weights that represent each
component's share of total costs.  Total costs are defined as the
value of manufacturing sectoral output.  The index uses changing
weights: The share in each year is averaged with the preceding
year's share.

     Research and development
     
    The stock of research and development (R&D) in private
nonfarm business is derived by cumulating constant dollar
measures of R&D expenditures and allowing for depreciation.
Current dollar expenditures for privately financed R&D for the
years 1953-98 are obtained from annual issues of Research and
Development in Industry published by the National Science
Foundation.  BLS develops price deflators and estimates of the
rate of depreciation.  Further description of these data and
methods can be found in BLS Bulletin 2331 (September 1989), "The
Impact of Research and Development on Productivity Growth."
     
Table 1.  Private business sector: Productivity and related measures, 1948-981

Indexes 1996=100

         Productivity                         Inputs          
               
      Output  Output                                    Combined
       per     per      Multi-                          units of   Capital
Year  hour     unit     factor                 Capital  capital    services     
      of all    of      Product-  Out-  Labor   Serv-     and      per hour of
      persons capital   ivity2    put3  Input4  ices5    labor6    all persons 
                                                             
1948    31.1   108.4     51.6     18.6   51.1    17.2     36.1       28.7
1949    32.2   105.4     52.2     18.6   49.4    17.6     35.6       30.5
                                                             
1950    35.0   111.7     56.0     20.4   50.3    18.3     36.5       31.3
                                                             
1955    40.9   115.3     62.0     24.9   53.7    21.6     40.2       35.4
                                                             
1960    45.6   110.4     65.2     27.5   54.0    24.9     42.3       41.3
1961    47.4   109.5     66.4     28.1   53.3    25.7     42.3       43.3
1962    49.6   113.1     68.8     29.9   54.8    26.4     43.5       43.8
1963    51.6   114.8     70.9     31.3   55.2    27.3     44.1       44.9
1964    53.9   118.1     73.7     33.3   56.2    28.2     45.2       45.7
                                                             
1965    55.9   120.8     76.1     35.6   58.0    29.5     46.8       46.3
1966    58.2   122.0     78.4     38.1   59.5    31.2     48.5       47.7
1967    59.5   117.5     78.5     38.8   59.4    33.0     49.4       50.6
1968    61.4   118.4     80.5     40.7   60.3    34.4     50.6       51.9
1969    61.7   116.2     80.2     42.0   62.1    36.1     52.4       53.1
                                                             
1970    63.0   111.1     80.0     42.0   61.0    37.8     52.4       56.7
1971    65.8   110.8     82.6     43.6   60.5    39.4     52.8       59.4
1972    68.0   113.4     85.0     46.5   62.6    41.1     54.8       59.9
1973    70.1   114.8     87.3     49.8   64.8    43.4     57.1       61.1
1974    69.0   107.0     84.1     49.0   65.2    45.8     58.3       64.5
                                                             
1975    71.4   102.1     84.8     48.5   62.4    47.5     57.2       70.0
1976    74.1   105.7     88.1     51.9   64.2    49.1     58.9       70.0
1977    75.2   107.6     89.5     54.8   66.8    51.0     61.2       69.9
1978    76.1   109.5     90.6     58.2   70.2    53.2     64.2       69.5
1979    76.0   107.8     90.3     60.2   72.4    55.8     66.6       70.5
                                                             
1980    75.8   101.5     88.3     59.4   71.9    58.6     67.3       74.7
1981    77.3    99.3     88.5     61.0   73.0    61.4     69.0       77.8
1982    77.2    92.7     85.8     59.3   71.7    64.0     69.1       83.2
1983    79.9    94.9     88.3     62.5   73.4    65.8     70.8       84.1
1984    82.2    99.0     91.2     68.1   77.7    68.8     74.7       83.1
                                                             
1985    83.9    98.6     92.2     71.0   79.6    72.0     77.0       85.1
1986    86.5    98.2     93.7     73.6   80.5    75.0     78.6       88.1
1987    87.0    98.5     94.0     76.3   83.1    77.5     81.2       88.4
1988    88.1    99.8     94.6     79.6   86.3    79.7     84.1       88.2
1989    89.0   100.4     95.2     82.4   88.9    82.0     86.5       88.6
                                                             
1990    90.2    99.3     95.3     83.6   89.4    84.2     87.7       90.8
1991    91.3    96.1     94.4     82.6   88.3    86.0     87.5       95.0
1992    94.8    97.7     96.6     85.7   89.3    87.7     88.8       97.0
1993    95.4    98.5     97.1     88.5   91.8    89.8     91.1       96.8
1994    96.6   100.3     98.1     92.8   95.6    92.6     94.6       96.3
                                                             
1995    97.3    99.7     98.4     95.8   98.0    96.0     97.3       97.6
1996   100.0   100.0    100.0    100.0  100.0   100.0    100.0      100.0
1997   102.0   100.5    101.1    105.2  103.7   104.7    104.0      101.5
1998   104.8   100.1    102.6    110.6  106.4   110.4    107.7      104.7

See footnotes following table 6.         Source: Bureau of Labor Statistics

Table 2.  Private nonfarm business sector: Productivity and related
          measures, 1948-981

Indexes 1996=100

         Productivity                         Inputs          
               
      Output  Output                                    Combined
       per     per      Multi-                          units of   Capital
Year  hour     unit     factor                 Capital  capital    services     
      of all    of      Product-  Out-  Labor   Serv-     and      per hour of
      persons capital   ivity2    put3  Input4  ices5    labor6    all persons 
                                                             
1948    35.1   118.6    56.5      17.9   44.1    15.1     31.8       29.6
1949    36.7   115.4    57.6      17.9   42.2    15.5     31.1       31.8
                                                             
1950    39.1   121.9    61.1      19.7   43.7    16.2     32.3       32.1
                                                             
1955    44.6   126.4    66.5      24.4   48.6    19.3     36.7       35.3
                                                             
1960    48.7   120.1    69.1      27.2   50.1    22.6     39.3       40.5
1961    50.3   118.6    70.0      27.7   49.9    23.4     39.6       42.5
1962    52.6   122.5    72.4      29.6   51.5    24.2     40.9       43.0
1963    54.5   124.1    74.4      31.0   52.1    25.0     41.7       43.9
1964    56.8   127.8    77.3      33.1   53.4    25.9     42.8       44.5
                                                             
1965    58.6   130.3    79.5      35.5   55.4    27.2     44.6       45.0
1966    60.7   131.6    81.8      38.0   57.2    28.9     46.5       46.1
1967    61.8   126.2    81.7      38.7   57.1    30.6     47.3       48.9
1968    63.7   127.1    83.8      40.8   58.2    32.1     48.6       50.2
1969    63.8   124.2    83.1      42.0   60.1    33.8     50.5       51.4
                                                             
1970    64.9   118.3    82.6      41.9   59.3    35.5     50.7       54.8
1971    67.6   117.7    85.2      43.6   58.9    37.0     51.1       57.5
1972    69.9   120.2    87.7      46.6   60.9    38.8     53.1       58.1
1973    72.1   121.8    90.2      50.0   63.3    41.1     55.5       59.2
1974    71.0   113.2    86.9      49.2   63.7    43.5     56.7       62.7
                                                             
1975    73.0   106.8    87.1      48.4   60.9    45.3     55.5       68.3
1976    75.8   110.9    90.6      51.9   62.8    46.8     57.3       68.3
1977    76.9   112.6    91.9      54.9   65.4    48.7     59.7       68.2
1978    77.8   114.7    93.2      58.4   68.8    50.9     62.7       67.9
1979    77.5   112.5    92.6      60.3   71.1    53.6     65.1       68.9
                                                             
1980    77.3   105.7    90.5      59.6   70.7    56.4     65.9       73.1
1981    78.3   102.5    90.0      60.8   71.8    59.4     67.6       76.4
1982    78.0    95.1    87.1      58.9   70.6    62.0     67.7       82.0
1983    81.4    97.9    90.3      62.8   72.3    64.1     69.5       83.2
1984    83.2   101.5    92.7      68.1   76.7    67.1     73.5       82.0
                                                             
1985    84.4    100.4   93.1      70.8   78.8    70.5     76.0       84.1
1986    87.1     99.8   94.5      73.5   79.8    73.7     77.8       87.2
1987    87.5     99.7   94.7      76.2   82.5    76.4     80.5       87.7
1988    88.6    101.1   95.4      79.7   85.9    78.8     83.6       87.6
1989    89.2    101.4   95.7      82.4   88.5    81.3     86.1       88.0
                                                             
1990    90.3    100.0   95.6      83.5   89.2    83.5     87.3       90.3
1991    91.4     96.6   94.7      82.5   88.0    85.4     87.1       94.7
1992    94.8     97.9   96.6      85.5   89.0    87.3     88.4       96.8
1993    95.3     98.8   97.1      88.4   91.8    89.5     91.0       96.5
1994    96.5    100.3   98.1      92.6   95.4    92.3     94.4       96.3
                                                             
1995    97.5     99.9   98.6      95.8   97.8    95.9     97.2       97.6
1996   100.0    100.0  100.0     100.0  100.0   100.0    100.0      100.0
1997   101.7    100.2  100.9     105.1  103.8   104.9    104.2      101.5
1998   104.5     99.8  102.4     110.6  106.6   110.8    108.0      104.7

See footnotes following table 6.   Source: Bureau of Labor Statistics

Table 3.  Manufacturing sector: Productivity and related measures, 1949-98

Indexes 1992=100

         Productivity                             Inputs
               
     Output  Output                                               Purchased Com-
      per     per    Multi-   Sec-                                Busi-     bined
Year  hour    unit   factor   toral        Capital                ness      units
     of all   of     Product- Out-    Hours Serv-          Mater- serv-     of all
     person  capital ivity7   put8      9   ices5   Energy ials   ices      inputs10  
                                                                         
1949  33.5    126.3   63.6     26.5    79.1  21.0    28.9  30.9   16.9      41.7
                                                                         
1950  34.0    134.0   66.9     29.1    85.5  21.7    30.3  30.4   19.7      43.5
                                                                         
1955  38.8    135.8   71.2     36.7    94.6  27.0    42.2  37.6   25.5      51.5
                                                                         
1960  41.8    124.3   72.8     38.5    92.0  30.9    51.3  38.2   28.2      52.9
1961  42.8    121.8   73.4     38.4    89.7  31.5    51.6  38.0   28.1      52.3
1962  44.2    127.1   76.2     41.2    93.4  32.4    54.6  38.5   30.1      54.1
1963  45.7    129.0   78.4     43.1    94.3  33.4    57.6  38.2   32.8      55.0
1964  47.5    132.6   80.6     45.7    96.3  34.5    63.4  39.4   34.8      56.7
                                                                         
1965  48.6    136.5   82.7     49.5   101.9  36.3    67.0  41.3   37.2      59.8
1966  49.1    136.8   83.0     53.3   108.6  38.9    71.9  43.9   42.0      64.2
1967  50.9    130.3   82.5     54.9   107.9  42.2    77.4  45.9   47.8      66.5
1968  52.7    130.6   85.1     57.7   109.5  44.2    82.3  46.5   47.7      67.8
1969  53.6    127.6   85.7     59.4   110.8  46.5    85.2  46.4   50.6      69.3
                                                                         
1970  54.2    116.5   84.4     56.5   104.2  48.5    85.4  44.8   48.8      67.0
1971  57.9    116.4   86.7     58.1   100.5  50.0    86.7  47.9   48.2      67.0
1972  60.3    122.8   89.8     63.3   105.1  51.5    89.1  51.4   51.4      70.5
1973  61.4    125.1   91.4     67.8   110.5  54.2    91.9  53.6   56.0      74.2
1974  61.2    115.2   86.5     66.1   107.9  57.4    94.4  58.5   60.0      76.4
                                                                        
1975  64.2    103.6   84.0     62.5    97.3  60.3    87.9  61.7   58.1      74.4
1976  66.9    108.8   87.0     68.2   101.9  62.7    91.2  66.9   59.4      78.4
1977  69.7    112.9   88.2     73.9   106.1  65.5    91.3  75.2   64.4      83.8
1978  70.4    114.0   88.9     77.8   110.5  68.3    92.5  78.7   68.2      87.5
1979  69.8    110.3   88.0     78.7   112.7  71.3    96.4  77.0   77.0      89.4
                                                                        
1980  70.1    100.9   86.6     75.3   107.5  74.7    92.5  75.0   73.7      87.0
1981  70.9     96.8   87.1     75.6   106.7  78.2    92.2  74.4   71.1      86.8
1982  74.6     90.3   88.7     72.7    97.5  80.5    83.3  72.5   61.5      81.9
1983  76.8     93.5   90.7     75.9    98.8  81.1    84.3  73.1   69.1      83.7
1984  79.5    100.4   93.5     83.7   105.3  83.3    89.6  80.6   73.4      89.5
                                                                        
1985  82.3     99.9   94.9     86.0   104.5  86.1    86.7  85.6   68.6      90.6
1986  85.9    100.1   96.5     88.5   103.0  88.4    87.4  87.6   73.0      91.7
1987  88.4    101.5   99.5     91.6   103.6  90.2    92.9  84.3   77.7      92.1
1988  90.2    104.7  101.3     96.1   106.6  91.8    96.6  85.8   84.7      94.9
1989  90.3    103.3   99.4     96.6   107.1  93.5    96.8  89.5   90.2      97.2
                                                                         
1990  92.8    101.6   99.3     97.3   104.8  95.8    99.9  92.5   92.5      98.0
1991  95.0     97.5   98.3     95.4   100.4  97.9   100.1  93.6   92.1      97.0
1992 100.0    100.0  100.0    100.0   100.0 100.0   100.0 100.0  100.0     100.0
1993 101.9    101.1  100.4    103.3   101.4 102.2   103.7 105.7  103.0     102.9
1994 105.0    104.0  102.6    108.7   103.6 104.5   107.3 111.3  105.1     106.0
                                                                        
1995 109.0    105.0  105.0    113.4   104.0 108.0   109.5 112.8  110.0     107.9
1996 112.8    104.5  106.1    116.9   103.7 111.9   107.0 120.4  108.9     110.2
1997 117.1    105.6  109.8    123.5   105.5 116.9   103.9 120.4  114.2     112.5
1998 124.3    106.5  113.2    130.7   105.2 122.8   109.2 127.2  116.8     115.5

See footnotes following table 6.    Source: Bureau of Labor Statistics

Table 4.  Private business sector: Productivity and related measures, 1948-98

Percent Change

         Productivity                         Inputs          
               
      Output  Output                                   Combined
       per     per      Multi-                         units of  Capital
Year  hour     unit     factor                Capital  capital   services      
      of all    of      Product-  Out- Labor  Serv-     and      per hour of
      persons capital   ivity2    put3 Input4 ices5    labor6    all persons   
               
1949   3.5     -2.8       1.2     -0.2  -3.3    2.7      -1.4      6.4
                                                             
1950   8.8      6.0       7.3     10.1   2.0    3.9       2.6      2.6
                                                             
1955   4.6      5.1       4.7      8.5   3.9    3.3       3.7     -0.4
                                                             
1960   1.9     -1.8       0.3      1.8   0.5    3.7       1.5      3.7
1961   3.8     -0.9       1.9      2.0  -1.2    2.9       0.0      4.7
1962   4.6      3.3       3.6      6.5   2.7    3.1       2.8      1.3
1963   4.0      1.5       3.0      4.6   0.8    3.1       1.5      2.5
1964   4.6      2.9       4.0      6.4   1.8    3.4       2.3      1.7
                                                             
1965   3.6      2.3       3.2      7.0   3.2    4.7       3.7      1.3
1966   4.1      1.1       3.1      6.8   2.6    5.7       3.6      3.0
1967   2.2     -3.7       0.1      1.9  -0.2    5.8       1.7      6.2
1968   3.2      0.7       2.6      5.1   1.6    4.4       2.5      2.5
1969   0.5     -1.9      -0.5      3.0   2.9    5.0       3.5      2.4
                                                            
1970   2.2     -4.4      -0.2      0.0  -1.7    4.5       0.1      6.8
1971   4.4     -0.3       3.2      3.9  -0.8    4.2       0.7      4.7
1972   3.3      2.3       2.9      6.7   3.4    4.3       3.7      0.9
1973   3.2      1.2       2.7      7.0   3.5    5.7       4.2      2.0
1974  -1.6     -6.7      -3.7     -1.6   0.7    5.5       2.1      5.5
                                                             
1975   3.5     -4.6       0.9     -1.0  -4.4    3.8      -1.9      8.6
1976   3.7      3.6       3.8      6.9   2.9    3.2       3.0      0.1
1977   1.6      1.7       1.6      5.7   4.0    3.9       4.0     -0.1
1978   1.1      1.8       1.2      6.2   5.2    4.3       4.9     -0.7
1979  -0.1     -1.6      -0.3      3.3   3.1    5.0       3.7      1.5
                                                             
1980  -0.3     -5.8      -2.3     -1.2  -0.6    4.9       1.1      5.9
1981   2.0     -2.1       0.2      2.7   1.5    4.9       2.5      4.2
1982  -0.2     -5.7      -3.0     -2.9  -1.7    4.1       0.1      7.0
1983   3.5      2.4       2.8      5.4   2.3    2.9       2.5      1.1
1984   2.9      4.3       3.3      9.0   6.0    4.5       5.5     -1.3
                                                             
1985   2.1     -0.4       1.1      4.3   2.4    4.7       3.1      2.5
1986   3.1     -0.4       1.6      3.7   1.1    4.2       2.1      3.5
1987   0.6      0.3       0.3      3.6   3.2    3.3       3.3      0.3
1988   1.2      1.3       0.7      4.3   3.9    2.9       3.6     -0.2
1989   1.0      0.6       0.6      3.5   2.9    2.9       2.9      0.4
                                                             
1990   1.3     -1.1       0.2      1.5   0.6    2.7       1.3      2.5
1991   1.2     -3.2      -1.0     -1.1  -1.2    2.1      -0.2      4.6
1992   3.8      1.6       2.3      3.7   1.1    2.0       1.4      2.2
1993   0.6      0.8       0.5      3.3   2.8    2.4       2.7     -0.2
1994   1.3      1.8       1.1      4.9   4.1    3.0       3.8     -0.5
                                                             
1995   0.8     -0.5       0.3      3.2   2.5    3.7       2.9      1.3
1996   2.8      0.3       1.6      4.4   2.1    4.1       2.8      2.5
1997   2.0      0.5       1.1      5.2   3.7    4.7       4.0      1.5
1998   2.7     -0.3       1.5      5.1   2.6    5.4       3.5      3.1

See footnotes following table 6.    Source: Bureau of Labor Statistics

Table 5.  Private nonfarm business sector: Productivity and related
          measures, 1948-98

Percent Change

         Productivity                         Inputs          
               
      Output  Output                                   Combined
       per     per      Multi-                         units of  Capital
Year  hour     unit     factor                Capital  capital   services      
      of all    of      Product-  Out- Labor  Serv-     and      per hour of
      persons capital   ivity2    put3 Input4 ices5    labor6    all persons   
               
1949   4.5     -2.7       2.0      0.0  -4.2    2.7      -2.0      7.3
                                                             
1950   6.7      5.7       6.0     10.0   3.6    4.2       3.8      1.0
                                                             
1955   4.7      5.1       4.7      8.9   4.2    3.6       4.0     -0.4
                                                             
1960   1.3     -2.3       0.2      1.7   0.4    4.1       1.5      3.7
1961   3.4     -1.3       1.3      2.0  -0.4    3.3       0.7      4.8
1962   4.6      3.3       3.4      6.9   3.3    3.5       3.3      1.2
1963   3.6      1.3       2.8      4.7   1.2    3.3       1.8      2.2
1964   4.2      3.0       3.9      6.8   2.4    3.7       2.8      1.2
                                                             
1965   3.1      1.9       2.8      7.1   3.7    5.0       4.1      1.2
1966   3.5      1.0       2.9      7.2   3.3    6.1       4.2      2.5
1967   1.8     -4.1      -0.1      1.7  -0.2    6.0       1.8      6.2
1968   3.2      0.7       2.6      5.4   1.8    4.7       2.7      2.5
1969   0.1     -2.2      -0.9      3.0   3.3    5.4       3.9      2.4
                                                             
1970   1.6     -4.8      -0.6     -0.1  -1.3    4.9       0.5      6.7
1971   4.2     -0.5       3.0      3.9  -0.7    4.4       0.8      4.8
1972   3.4      2.2       3.0      7.0   3.4    4.7       3.8      1.2
1973   3.2      1.3       2.8      7.4   3.9    6.0       4.5      1.9
1974  -1.5     -7.0      -3.6     -1.6   0.6    5.9       2.1      5.9
                                                             
1975   2.8     -5.7       0.2     -1.8  -4.4    4.1      -2.0      8.9
1976   3.8      3.9       4.1      7.4   3.1    3.4       3.2     -0.1
1977   1.5      1.5       1.4      5.7   4.2    4.1       4.2     -0.1
1978   1.3      1.8       1.4      6.5   5.2    4.6       5.0     -0.5
1979  -0.4     -1.9      -0.7      3.2   3.3    5.2       3.9      1.5
                                                             
1980  -0.3     -6.0      -2.3     -1.2  -0.5    5.2       1.1      6.1
1981   1.3     -3.1      -0.5      2.1   1.5    5.3       2.6      4.5
1982  -0.4     -7.2      -3.2     -3.1  -1.6    4.4       0.2      7.3
1983   4.4      2.9       3.7      6.5   2.4    3.5       2.7      1.4
1984   2.3      3.7       2.7      8.5   6.2    4.6       5.7     -1.4
                                                             
1985   1.4     -1.0       0.5      3.9   2.7    5.0       3.4      2.5
1986   3.1     -0.6       1.5      3.9   1.3    4.5       2.3      3.8
1987   0.4     -0.1       0.1      3.6   3.4    3.7       3.5      0.5
1988   1.3      1.3       0.8      4.6   4.1    3.2       3.8     -0.1
1989   0.8      0.3       0.3      3.4   3.0    3.1       3.0      0.5
                                                             
1990   1.2     -1.4       0.0      1.4   0.8    2.8       1.4      2.6
1991   1.3     -3.4      -1.0     -1.2  -1.4    2.3      -0.2      4.8
1992   3.6      1.4       2.0      3.6   1.2    2.2       1.5      2.2
1993   0.6      0.9       0.5      3.5   3.1    2.6       2.9     -0.3
1994   1.3      1.5       1.0      4.7   3.9    3.1       3.7     -0.2
                                                             
1995   1.0     -0.4       0.5      3.4   2.5    3.9       3.0      1.4
1996   2.5      0.1       1.4      4.4   2.3    4.3       2.9      2.4
1997   1.7      0.2       0.9      5.1   3.8    4.9       4.2      1.5
1998   2.7     -0.4       1.5      5.2   2.7    5.6       3.7      3.1

See footnotes following table 6.     Source: Bureau of Labor Statistics

Table 6. Manufacturing sector: Productivity and related measures, 1950-98

Percent Change

         Productivity                             Inputs
               
     Output  Output                                               Purchased Com-
      per     per    Multi-   Sec-                                Busi-     bined
Year  hour    unit   factor   toral        Capital                ness      units
     of all   of     Product- Out-    Hours Serv-          Mater- serv-     of all
     person  capital ivity7   put8      9   ices5   Energy ials   ices      inputs10  
                                                                         
1950   1.5      6.1    5.2      9.7     8.1   3.4     4.7  -1.4   16.7       4.3
                                                                         
1955   4.0      5.7    3.0      9.7     5.5   3.8    13.9   8.3   11.0       6.6
                                                                         
1960   2.2     -0.7    0.2      1.7    -0.4   2.5     1.9    4.2   1.7       1.5
1961   2.4     -2.1    0.9     -0.2    -2.6   1.9     0.6   -0.6  -0.6      -1.1
1962   3.2      4.4    3.9      7.5     4.1   2.9     5.8    1.4   7.1       3.5
1963   3.5      1.5    2.8      4.5     1.0   3.0     5.5   -0.8   9.0       1.7
1964   3.8      2.8    2.9      6.0     2.1   3.1    10.0    3.1   6.0       3.0
                                                                         
1965   2.3      3.0    2.6      8.3     5.9   5.2     5.7    4.9   6.9       5.6
1966   1.1      0.2    0.4      7.7     6.5   7.4     7.3    6.3  13.0       7.2
1967   3.7     -4.8   -0.6      3.1    -0.6   8.3     7.8    4.4  13.8       3.7
1968   3.6      0.3    3.1      5.1     1.4   4.8     6.2    1.2  -0.4       1.9
1969   1.7     -2.3    0.7      2.9     1.2   5.4     3.5   -0.2   6.1       2.2
                                                                         
1970   1.2     -8.7   -1.6     -4.8    -5.9   4.3    0.3    -3.3   -3.5     -3.3
1971   6.7     -0.1    2.8      2.9    -3.6   3.0    1.5     6.7   -1.1      0.1
1972   4.1      5.6    3.6      8.9     4.6   3.2    2.7     7.4    6.6      5.1
1973   1.9      1.8    1.8      7.1     5.1   5.2    3.2     4.4    9.0      5.3
1974  -0.3     -7.9   -5.4     -2.5    -2.3   5.8    2.8     9.2    7.1      3.0
                                                                         
1975   4.9    -10.0   -2.9     -5.4    -9.9   5.1   -6.9     5.4   -3.2     -2.6
1976   4.2      5.0    3.5      9.1     4.8   3.9    3.8     8.5    2.3      5.4
1977   4.1      3.7    1.4      8.4     4.1   4.5    0.1    12.5    8.3      6.8
1978   1.0      0.9    0.8      5.2     4.2   4.3    1.2     4.6    6.0      4.4
1979  -0.8     -3.2   -1.0      1.1     1.9   4.5    4.2    -2.2   12.8      2.2
                                                                         
1980   0.4     -8.6   -1.7     -4.3    -4.6   4.7   -4.0    -2.5   -4.3     -2.6
1981   1.1     -4.1    0.7      0.4    -0.7   4.7   -0.4    -0.8   -3.6     -0.3
1982   5.2     -6.6    1.8     -3.9    -8.7   2.9   -9.6    -2.5  -13.5     -5.6
1983   3.0      3.5    2.3      4.4     1.4   0.9    1.1     0.7   12.4      2.1
1984   3.5      7.4    3.1     10.3     6.5   2.7    6.4    10.3    6.2      7.0
                                                                         
1985   3.6     -0.5    1.5      2.8    -0.8   3.3   -3.3     6.3   -6.6      1.3
1986   4.3      0.2    1.7      2.8    -1.4   2.6    0.8     2.3    6.5      1.2
1987   2.9      1.4    3.2      3.6     0.6   2.1    6.2    -3.8    6.4      0.4
1988   2.0      3.1    1.8      4.9     2.8   1.7    4.0     1.8    9.0      3.1
1989   0.1     -1.4   -1.8      0.5     0.5   1.9    0.2     4.3    6.5      2.4
                                                                         
1990   2.9     -1.7   -0.2      0.7    -2.1   2.4    3.2     3.3    2.5      0.9
1991   2.3     -4.0   -1.0     -2.0    -4.2   2.1    0.2     1.3   -0.4     -1.0
1992   5.3      2.6    1.7      4.8    -0.4   2.2   -0.1     6.8    8.6      3.1
1993   1.9      1.1    0.4      3.3     1.4   2.2    3.7     5.7    3.0      2.9
1994   3.0      2.9    2.2      5.2     2.2   2.3    3.4     5.3    2.1      3.0
                                                                         
1995   3.8      0.9    2.4      4.3     0.4   3.3    2.1     1.4    4.6      1.8
1996   3.5     -0.5    1.0      3.1    -0.3   3.7   -2.3     6.8   -1.0      2.1
1997   3.8      1.1    3.4      5.6     1.7   4.4   -3.0    -0.1    4.9      2.1
1998   6.2      0.8    3.1      5.9    -0.3   5.0    5.1     5.6    2.2      2.7

See footnotes following table 6.     Source: Bureau of Labor Statistics

                        Footnotes, Tables 1-6

Source:  Output data are from the Bureau of Economic Analysis (BEA),
U.S. Department of Commerce, and modified by the Bureau of Labor
Statistics (BLS), U.S. Department of Labor.  Compensation and hours
data are from BLS.  Capital measures are based on data supplied by
BEA and the U.S. Department of Agriculture.  See also Summary of
Methods in this release.

(1) The private business sector includes all of gross domestic
    product except the output of general government, government enterprises,
    non-profit institutions, the rental value of owner-occupied real estate,
    and the output of paid employees of private households.  The private
    nonfarm business sector also excludes farms but includes
    agricultural services.

(2) Output per unit of combined labor and capital inputs.

(3) Gross domestic product originating in the sector, superlative
    chained index.

(4) Index of the hours at work of all persons including employees,
    proprietors, and unpaid family workers classified by education,
    work experience, and gender. This superlative chain index is computed
    by combining changes in the hours of each education, experience,
    and gender group weighted by each group's share of labor compensation.

(5) A measure of the flow of capital services used in the sector.

(6) Labor input combined with capital input, using labor's and
    capital's shares of costs as weights to form a superlative chained index.

(7) Sectoral output per combined units of capital, hours, energy, non-energy
    materials, and purchased business services.

(8) Manufacturing gross output excluding transactions between manufacturing
    establishments, superlative chained index.

(9) Hours at work of all persons.

(10) Combined units of capital services, hours, energy, non-energy
     materials, and purchased business services, superlative chained index.

Table 7. Real capital input by asset type, private business, 1948-98

Average annual growth rates (percent)

                                                                  
                   1948-    1948-   1973-   1979-   1990-    1995-   1997-
                   1998     1973    1979    1990    1995     1998    1998
                                                                      
All Assets          3.8      3.8     4.3     3.8     2.7      4.8      5.4

  Equipment         5.8      5.5     7.0     5.6     4.4      8.4      9.5

    All            11.4      9.8    13.4    14.3     8.5     15.4     17.4
    Information
    equipment &
    software (IPES)

    Computers &    27.8     25.3    36.0    32.2    14.6     40.9     45.8
    related
    equipment

    Software       21.2     28.2    13.5    16.0    13.4     13.5     14.2

    Communication   8.6     10.1     8.0     8.3     4.1      7.0      7.8
    equipment

    Other IPES      6.5      6.7    11.2     5.9     3.1      4.1      4.2

    All other       3.8      4.8     5.2     1.8     1.7      3.8      4.2
    equipment

  Structures        3.0      3.1     2.9     3.5     1.7      2.0      2.2

  Residential       2.5      3.5     2.6     1.5     0.5      0.7      0.5
  rental capital

  Inventories       3.5      4.2     3.5     2.2     2.6      4.3      6.0

  Land              1.9      2.0     2.3     2.5     0.8      1.0      1.3

Source: Bureau of Labor Statistics

Note: For a brief discussion of methods used in preparing these data,
see Summary of Methods in this release.

Table 8. Real capital input by asset type, private nonfarm business, 1948-98

Average annual growth rates (percent)

                                                                  
                   1948-    1948-   1973-   1979-   1990-    1995-   1997-
                   1998     1973    1979    1990    1995     1998    1998
                                                                      
All Assets          4.1      4.1     4.5     4.1     2.8      4.9     5.6

  Equipment         5.9      5.6     7.1     5.9     4.6      8.6     9.7

    All            11.4      9.8    13.4    14.3     8.5     15.4    17.4
    Information
    equipment &
    software (IPES)

    Computers &    27.8     25.3    36.0    32.2    14.6     40.9    45.8
    related
    equipment

    Software       21.2     28.2    13.5    16.0    13.4     13.5    14.2

    Communication   8.6     10.1     8.0     8.2     4.1      7.0     7.8
    equipment

    Other IPES      6.5      6.7    11.2     5.9     3.1      4.1     4.2
 
    All other       4.0      4.9     5.2     2.1     1.9      3.9     4.3
    equipment

  Structures        3.1      3.2     3.0     3.6     1.8      2.1     2.2

  Residential       2.5      3.6     2.6     1.5     0.5      0.7     0.5
  rental capital

  Inventories       3.7       4.4     3.7    2.4     2.6      4.4     6.1

  Land              2.7       2.8     3.3    3.3     1.0      1.1     1.6

Source: Bureau of Labor Statistics

Note: For a brief discussion of methods used in preparing these data,
see Summary of Methods in this release.

Table 9.  Manufacturing industries: Multifactor productivity trends, 1949-98

Average annual growth rates

Industry                    1949-  1949-  1973-  1979-  1990-  1995-  1997-
                              98     73     79     90     95     98     98
                                                               
Manufacturing                1.2    1.5   -0.6    1.1    1.1    2.5    3.1
                                                                     
Nondurable Manufacturing     0.7    1.3   -0.6    0.3    0.3    0.6    1.0
Food and kindred products    0.5    0.7    0.1    0.4    0.7   -0.5    3.0
Tobacco manufactures        N.A.   N.A.   N.A.   N.A.   N.A.   N.A.   N.A.
Textile mill products        2.2    2.3    3.3    2.1    1.5    1.1   -0.4
Apparel & related products   0.8    0.7    1.9    0.6    0.5    1.4    0.9
Paper and allied products    0.7    1.6   -1.2    0.0    0.2    1.1   -1.0
                                                                     
Printing and publishing     -0.2    0.5   -0.7   -0.9   -1.2   -0.3   -0.4
Chemicals & allied products  1.1    2.5   -2.6    0.7   -0.3    1.0    0.4
Petroleum refining           0.4    0.8   -0.6   -0.1    0.3    1.2    2.6
Rubber & misc.               0.7    1.0   -1.9    1.4    1.1    1.6    0.0
  plastic products
Leather & leather products  N.A.    N.A.  N.A.    N.A.   N.A.   N.A.  N.A.
                                                                     
Durable manufacturing        1.5    1.5   -0.6    1.8    1.8    4.0    4.6
Lumber and wood products     1.2    1.7    0.4    2.5   -1.8   -0.8    0.4
Furniture and fixtures       0.6    0.6    0.4    0.6    0.6    1.6    1.4
Stone, clay, glass           0.9    1.1   -1.3    1.4    0.7    2.1    1.6
  & concrete products
Primary metals industries    0.1    0.4   -2.3    0.3    0.7    1.6    4.1
Fabricated metals products   0.3    0.5   -1.0    0.5    0.4   -0.1   -4.1
                                                                     
Industrial & commercial      1.8    0.7    0.1    3.2    3.0    7.6   10.0
  machinery
Electrical &                 2.8    2.1    1.0    3.1    5.5    7.2    8.8
  electronic machinery
Transportation equipment     0.8    1.5   -0.6    0.2    0.4    1.2    1.7
Instruments                  1.4    1.8    1.2    1.4    0.0    0.8    2.3
Miscellaneous manufacturing  0.8    1.5   -1.1    1.1   -0.4    0.2   -0.9

N.A. - Multifactor productivity measures are not published because of
the small size of the industry and data limitations.  This industry is
included in the aggregate for total manufacturing.

Note:  Multifactor productivity measures by industry are not directly
comparable to measures for aggregate manufacturing because industry
measures exclude transactions only within the specific industry while the
aggregate manufacturing measures also exclude transactions between all
manufacturing industries.