Internet address: http://www.bls.gov USDL 08-0261 

Technical information: (202) 691-5654 For Release: 10:00 A.M. EST 

Media contact: (202) 691-5902 Thursday, February 28, 2008 

INTERNATIONAL COMPARISONS OF MANUFACTURING PRODUCTIVITY 

AND UNIT LABOR COST TRENDS 2006, REVISED 

Manufacturing labor productivity increased in 2006 in 15 of the 16 economies 

compared by the U.S. Department of Labor’s Bureau of Labor Statistics. (See chart 1.) 

The Republic of Korea had the largest productivity increase of 10.8 percent, while 

Germany and Taiwan followed with increases of 7.1 and 6.9 percent, respectively. The 

United States productivity increase of 2.0 percent placed it twelfth among the 16 

economies compared, while Canada was the only economy with a decline in productivity 

(-0.1 percent). 

Over the 2000–2006 period, of the 16 economies studied, only Korea, Sweden, 

and Taiwan had greater productivity growth than the United States. Average annual 

growth rates for selected measures are shown in tables A and B. 

The data presented for the United States differ from those appearing in BLS 

Productivity and Costs news releases. (See technical notes.) 

Chart 1. Percent change in

 manufacturing output per hour, 2005–2006

2.0

-0.1

0.3

1.9

10.8

6.9

2.2

5.1

3.7

7.1

1.4

3.1 3.3

2.7

5.9

4.5

-2

0

2

4

6

8

10

12

United States

Canada

Australia

Japan

Korea, Rep. of

Taiwan

Belgium

Denmark

France

Germany

Italy

Netherlands

Norway

Spain

Sweden

United Kingdom

(Percent)
- 2 -

Manufacturing unit labor costs, expressed in national currency units, declined in nine 

of the economies and increased in seven. The change for the United States was +0.5 

percent. (See chart 2.) 

However, expressed in U.S. dollars, unit labor costs declined in six of the economies 

and increased in ten. Declines in the dollar's exchange rate reversed the direction of 

movement in three countries. The reversal was largest for Korea, from a decline (-3.6 

percent) in unit labor costs in national currency to an almost equivalent increase in unit 

labor costs expressed in U.S. dollars. This difference can be explained by the strong 

appreciation of the won relative to the U.S. dollar. 

Chart 2. Percent change in manufacturing unit labor costs, 

2005-2006

0.5

2.0

5.4

-3.2

-3.6

-4.4

-0.1

-2.0

-1.0

-2.8

0.4

-0.3

1.2

0.3

-2.0

2.3

0.5

9.0

4.1

-8.4

3.5

-5.6

0.8

-1.1

-0.1

-1.9

1.3

0.6

1.7

1.2

-0.7

3.6

-10 -8 -6 -4 -2 0 2 4 6 8 1

United States

Canada

Australia

Japan

Korea, Rep. of

Taiwan

Belgium

Denmark

France

Germany

Italy

Netherlands

Norway

Spain

Sweden

United Kingdom

0

National currency basis U.S. dollar basis
- 3 -

 Table A. Output per hour, hourly compensation, unit labor costs, and related measures 

 Manufacturing, 16 countries or areas, 2005-2006 

 Percent change 

 --------------------------------------------------------------------------------------------------------------- 

 Unit Labor Costs 

 Output Total Hourly ---------------- 

 Country per Total Employ- Average compen- compen- National U.S. Exchange 

 or area Hour Output hours ment hours sation sation currency dollars rate(1) 

 --------------------------------------------------------------------------------------------------------------- 

 United States 2.0 2.9 0.9 -0.5 1.4 3.4 2.5 0.5 0.5 -- 

 Canada -0.1 -1.0 -0.9 -1.0 0.1 1.0 1.9 2.0 9.0 6.8 

 Australia 0.3 -1.3 -1.5 -1.2 -0.4 4.1 5.7 5.4 4.1 -1.2 

 Japan 1.9 4.3 2.4 1.5 0.8 0.9 -1.4 -3.2 -8.4 -5.3 

 Korea, Republic of 10.8 8.4 -2.1 -0.4 -1.7 4.5 6.8 -3.6 3.5 7.3 

 Taiwan 6.9 7.2 0.3 1.1 -0.8 2.5 2.1 -4.4 -5.6 -1.2 

 Belgium 2.2 2.7 0.5 -1.1 1.6 2.5 2.1 -0.1 0.8 0.9 

 Denmark 5.1 5.4 0.3 -0.2 0.5 3.4 3.1 -2.0 -1.1 0.9 

 France 3.7 1.6 -2.0 -2.0 0.0 0.5 2.6 -1.0 -0.1 0.9 

 Germany 7.1 5.8 -1.2 -0.9 -0.3 2.9 4.1 -2.8 -1.9 0.9 

 Italy 1.4 3.7 2.3 1.2 1.0 4.2 1.8 0.4 1.3 0.9 

 Netherlands 3.1 2.3 -0.8 -0.8 0.1 2.0 2.8 -0.3 0.6 0.9 

 Norway 3.3 4.4 1.0 1.1 -0.1 5.6 4.5 1.2 1.7 0.5 

 Spain 2.7 2.9 0.1 -0.2 0.4 3.2 3.0 0.3 1.2 0.9 

 Sweden 5.9 5.2 -0.7 -0.7 0.0 3.0 3.8 -2.0 -0.7 1.3 

 United Kingdom 4.5 1.4 -2.9 -2.6 -0.3 3.8 6.9 2.3 3.6 1.3 

 --------------------------------------------------------------------------------------------------------------- 

 (1) Value of foreign currency relative to the U.S. dollar.

Additional data available

Annual indexes of these variables are estimated for the time period 1950-2006 and 

are available at the Bureau of Labor Statistics, Division of Foreign Labor Statistics 

website at http://www.bls.gov/fls/home.htm. However, for analytical purposes, the 

international comparisons in this release go back to 1979. 

For further information, contact the Office of Productivity and Technology by phone 

at 202-691-5654, by e-mail at flspr@bls.gov, or by mail at Bureau of Labor Statistics, 

2 Massachusetts Avenue, NE, Room 2150, Washington, DC 20212. 
- 4 -

Manufacturing productivity, output, and labor input

 Manufacturing productivity increased between 2 and 6 percent in 2006 in most of 

the compared economies. The United States increase was at the lower end of this interval 

with a growth of 2.0 percent. This was below the U.S. average annual increases during 

the previous periods displayed in Table B. Korea led in manufacturing productivity 

growth (+10.8 percent), followed by Germany and Taiwan. Manufacturing productivity 

increased by only 0.3 percent in Australia and by 1.4 percent in Italy, while Canada had a 

slight decline in productivity. (See tables A and B.) 

 Manufacturing output increased in 14 of the 16 economies in 2006. Korea and 

Taiwan were the leaders in the growth of output. In 2006, growth in manufacturing 

output in Germany, Denmark and Norway was noticeably higher than their average 

annual rates of increase over the 1979-2006 period. The U.S. increase of 2.9 percent was 

almost the same as its average annual increase since 1979. 

While 14 of the economies had increases in output in 2006, 8 economies had 

reductions in total hours worked in manufacturing. The United Kingdom had the greatest 

decline (-2.9 percent) in hours in 2006, followed by Korea (-2.1 percent) and France (-2.0 

percent). Total hours worked increased in the United States by 0.9 percent, and by over 2 

percent in Japan and Italy. 

 For the period 2000-2006, total hours worked in manufacturing declined for all 16 

economies. The United Kingdom had the greatest average annual decline of 4.4 percent, 

followed by the United States, with an average annual decline of 3.2 percent. 

Manufacturing employment declined in 12 of the 16 economies in 2006. The United 

Kingdom had the largest decline in employment (-2.6 percent), while Japan had the 

greatest increase (+1.5 percent). The United States was close to the middle of the range 

with a change of -0.5 percent. 

The United Kingdom and the United States experienced the steepest average annual 

declines in manufacturing employment of 4.3 and 3.2 percent, respectively, for the 2000-

2006 period. 

 Six of the sixteen economies experienced decreases in average hours worked in 

2006, eight registered increases, and two had no change. This compares to 13 economies 

with declining average annual manufacturing hours over the 2000–2006 period. Korea 

and Taiwan had the greatest declines in average hours worked in 2006. Belgium had the 

largest increase in average hours worked (+1.6 percent) and the United States followed 

with a growth of 1.4 percent, which was higher than the U.S. average annual increase 

during any previous period displayed in Table B. 

 
- 5 -

Manufacturing hourly compensation and unit labor costs

Total labor compensation in manufacturing increased in all 16 economies in 2006, 

from 0.5 percent in France to 5.6 percent in Norway. For most, the increases were 

between 2 and 4 percent. U. S. compensation rose by 3.4 percent, which was slightly 

below the average annual increase since 1979. (See tables A and B.) 

Hourly compensation in manufacturing increased in 15 of the 16 economies in 2006. 

The greatest increases were in the United Kingdom (+6.9 percent) and Korea (+6.8 

percent). Hourly compensation decreased only in Japan in 2006. The U.S. increase of 

2.5 percent in hourly compensation was substantially below its average annual increase 

since 1979. (See tables A and B.) 

Unit labor costs, expressed in national currencies, declined in nine economies in 

2006, and increased in seven. The largest increase occurred in Australia (+5.4 percent) 

and the greatest decline was in Taiwan (-4.4 percent). Unit labor costs in U.S. 

manufacturing increased by 0.5 percent. 

Expressed in U.S. dollars, manufacturing unit labor costs increased in ten economies 

in 2006, and declined in six. The unit labor costs of three economies, Korea, the 

Netherlands, and Belgium, went from decreases to increases when computed on a U.S. 

dollar basis. This reversal happened because of the appreciation of their currencies 

versus the dollar. Korea, with the greatest currency appreciation, experienced the 

greatest reversal, from -3.6 to +3.5 percent. 

Movements in exchange rates often are the dominant force behind changes in 

comparative unit labor costs and international competitiveness. In 2006, the U.S. dollar 

weakened against most of the currencies being compared. The only exceptions were 

Japan, Australia, and Taiwan, where the currencies depreciated against the dollar. This 

depreciation of the U.S. dollar against most currencies continues a trend that began after 

2000. In 2006, the dollar fell by 0.9 percent against the euro, following a decline of 0.1 

percent in 2005. 
- 6 -

 Table B. Output per hour, hourly compensation, unit labor costs, and related measures 

 Manufacturing, 16 countries or areas, 1979-2006 

 Average annual rates of change(1) 

 -------------------------------------------------------------------------------------------------------- 

 Country or area 1979-2006 1979-1990 1990-1995 1995-2000 2000-2006 2004-2005 2005-2006 

 -------------------------------------------------------------------------------------------------------- 

 Output per hour 

 United States r3.9 2.8 3.7 5.5 r4.6 r2.2 r2.0 

 Canada r2.4 2.1 3.4 3.8 r0.8 r3.8 r-0.1 

 Australia 2.9 2.9 2.9 3.8 2.0 1.0 0.3 

 Japan r3.7 3.8 3.3 3.4 r3.9 r6.5 r1.9 

 Korea, Republic of NA NA 9.4 10.8 7.4 6.8 10.8 

 Taiwan 5.7 6.1 4.7 5.6 6.0 7.2 6.9 

 Belgium r3.5 4.2 3.1 r3.0 2.8 r3.1 r2.2 

 Denmark 2.4 2.2 2.7 1.8 r2.8 r1.1 r5.1 

 France 3.8 3.6 3.8 4.6 3.4 4.3 3.7 

 Germany (2) 2.9 2.1 2.9 3.7 r3.6 r3.7 r7.1 

 Italy 1.7 2.8 2.7 0.9 -0.6 -0.1 1.4 

 Netherlands r3.3 r3.2 3.7 3.3 3.1 3.5 3.1 

 Norway 2.0 1.9 0.1 1.4 r4.5 r3.5 3.3 

 Spain 2.5 3.3 3.1 0.8 r1.9 r1.6 r2.7 

 Sweden r4.5 r2.1 r5.5 r6.8 r6.4 6.2 r5.9 

 United Kingdom 3.6 4.1 3.1 2.2 4.4 3.6 4.5 

 Output 

 United States r2.8 2.2 3.6 5.4 r1.2 r1.0 r2.9 

 Canada 2.2 1.9 2.2 6.2 r-0.2 r1.6 r-1.0 

 Australia 1.4 1.6 0.8 2.6 0.7 0.2 -1.3 

 Japan r2.7 4.7 0.4 1.2 r2.2 r5.2 r4.3 

 Korea, Republic of 8.9 10.7 8.2 7.9 6.9 7.1 8.4 

 Taiwan 6.0 7.4 4.4 5.8 4.9 6.6 7.2 

 Belgium r1.8 2.6 0.6 r2.9 r0.7 r-0.2 r2.7 

 Denmark r1.1 1.3 2.1 1.7 r-0.3 r-3.1 r5.4 

 France 1.6 1.3 0.9 3.5 1.1 1.3 1.6 

 Germany (2) r1.1 1.2 -1.0 2.2 r1.8 r1.4 r5.8 

 Italy 1.3 2.6 1.6 0.7 -0.8 -2.5 3.7 

 Netherlands 2.1 2.4 2.0 3.3 0.7 0.0 2.3 

 Norway 0.8 -0.5 0.7 1.4 r2.7 r4.5 r4.4 

 Spain 2.2 2.1 0.6 5.0 r1.5 r1.0 r2.9 

 Sweden 3.8 r1.7 3.8 7.4 r4.6 r4.6 r5.2 

 United Kingdom 0.6 0.9 0.5 1.3 -0.3 -1.2 r1.4 

 -------------------------------------------------------------------------------------------------------- 

 Continued on next page
- 7 -

 Table B. Output per hour, hourly compensation, unit labor costs, and related measures 

 Manufacturing, 16 countries or areas, 1979-2006 

 Average annual rates of change(1) 

 -------------------------------------------------------------------------------------------------------- 

 Country or area 1979-2006 1979-1990 1990-1995 1995-2000 2000-2006 2004-2005 2005-2006 

 -------------------------------------------------------------------------------------------------------- 

 Total hours 

 United States -1.0 -0.6 -0.1 -0.1 -3.2 -1.2 0.9 

 Canada -0.1 -0.2 -1.2 2.3 r-1.0 r-2.1 r-0.9 

 Australia -1.4 -1.3 -2.0 -1.2 -1.2 -0.8 -1.5 

 Japan -1.0 0.8 -2.8 r-2.1 r-1.7 -1.3 r2.4 

 Korea, Republic of NA NA -1.1 -2.6 -0.5 0.2 -2.1 

 Taiwan 0.2 1.2 -0.3 0.1 -1.0 -0.6 0.3 

 Belgium -1.6 -1.6 -2.4 -0.1 -2.1 -3.2 0.5 

 Denmark r-1.2 -1.0 -0.7 -0.1 r-3.0 r-4.2 r0.3 

 France -2.1 -2.2 -2.8 -1.1 -2.2 -2.8 -2.0 

 Germany (2) -1.7 -0.9 -3.8 -1.4 -1.7 -2.2 r-1.2 

 Italy -0.4 -0.2 -1.0 -0.2 -0.2 -2.4 2.3 

 Netherlands -1.2 r-0.9 -1.7 0.0 -2.3 -3.3 -0.8 

 Norway -1.2 -2.3 0.6 0.0 r-1.7 r1.0 r1.0 

 Spain -0.3 -1.2 -2.4 4.1 r-0.4 r-0.6 r0.1 

 Sweden r-0.7 r-0.4 r-1.7 r0.5 r-1.7 r-1.5 r-0.7 

 United Kingdom -2.9 -3.1 -2.6 -0.9 r-4.4 -4.6 r-2.9 

 Employment 

 United States -1.1 -0.8 -0.5 0.0 -3.2 -0.6 -0.5 

 Canada -0.2 -0.3 -1.5 2.2 r-0.9 r-1.1 r-1.0 

 Australia -1.4 -1.3 -2.3 -1.1 -1.1 -1.7 -1.2 

 Japan -0.7 1.0 -1.6 -2.0 -1.9 -0.8 r1.5 

 Korea, Republic of NA NA -0.8 -2.5 0.6 0.9 -0.4 

 Taiwan 0.8 2.0 -0.3 0.4 0.0 0.4 1.1 

 Belgium -1.5 -1.6 -2.2 -0.6 r-1.7 r-1.2 r-1.1 

 Denmark -1.1 -0.4 -1.2 -1.2 r-2.4 r-2.5 r-0.2 

 France -1.6 -1.7 -2.5 -0.3 -1.8 -2.6 -2.0 

 Germany (2) -1.3 -0.1 -4.2 -0.8 -1.4 -1.7 r-0.9 

 Italy -0.7 -0.8 -1.9 -0.2 0.0 -1.7 1.2 

 Netherlands r-1.0 r-0.6 -1.6 0.1 -2.2 -3.0 -0.8 

 Norway -1.2 -2.2 0.4 0.2 r-1.9 r0.1 r1.1 

 Spain 0.1 -0.7 -2.0 3.3 r0.7 1.0 r-0.2 

 Sweden -1.4 -1.0 -3.5 r0.2 r-1.8 r-1.1 -0.7 

 United Kingdom -2.8 -2.9 -2.4 -1.4 -4.3 -4.5 -2.6 

 -------------------------------------------------------------------------------------------------------- 

 Continued on next page
- 8 -

 Table B. Output per hour, hourly compensation, unit labor costs, and related measures 

 Manufacturing, 16 countries or areas, 1979-2006 

 Average annual rates of change(1) 

 -------------------------------------------------------------------------------------------------------- 

 Country or area 1979-2006 1979-1990 1990-1995 1995-2000 2000-2006 2004-2005 2005-2006 

 -------------------------------------------------------------------------------------------------------- 

 Average hours 

 United States 0.1 0.2 0.4 -0.1 -0.1 -0.6 1.4 

 Canada 0.1 0.1 0.3 0.1 r-0.1 r-1.1 0.1 

 Australia 0.0 0.0 0.3 -0.1 -0.1 0.9 -0.4 

 Japan -0.3 -0.2 -1.3 r-0.1 0.2 -0.5 0.8 

 Korea, Republic of NA NA -0.2 -0.1 -1.1 -0.6 -1.7 

 Taiwan -0.6 -0.8 0.0 -0.3 -1.0 -1.0 -0.8 

 Belgium r0.0 0.0 -0.2 0.5 r-0.4 r-2.1 r1.6 

 Denmark r-0.1 -0.5 0.6 1.1 r-0.7 r-1.8 r0.5 

 France -0.5 -0.5 -0.3 -0.8 -0.4 -0.2 0.0 

 Germany (2) -0.4 -0.9 0.4 -0.6 r-0.3 r-0.6 r-0.3 

 Italy 0.4 0.6 0.9 0.0 -0.2 -0.7 1.0 

 Netherlands -0.1 -0.2 0.0 -0.1 -0.1 -0.4 0.1 

 Norway 0.0 -0.1 0.2 -0.2 r0.2 r0.9 r-0.1 

 Spain -0.4 -0.5 -0.4 0.8 r-1.1 r-1.6 r0.4 

 Sweden r0.7 r0.7 r1.9 r0.3 r0.0 r-0.4 0.0 

 United Kingdom -0.1 -0.2 -0.1 0.5 -0.2 -0.1 r-0.3 

 Total labor compensation(3): National currency basis 

 United States 3.6 4.9 3.4 4.5 0.8 3.0 3.4 

 Canada r4.6 6.5 2.4 5.2 r2.3 r2.6 r1.0 

 Australia NA NA 3.2 3.1 r4.2 r5.2 r4.1 

 Japan r1.8 5.5 0.7 -1.0 r-1.6 r-0.4 r0.9 

 Korea, Republic of 13.7 19.6 17.6 5.4 7.3 8.2 4.5 

 Taiwan 7.5 13.5 6.8 3.6 1.1 3.7 2.5 

 Belgium 2.7 4.4 1.3 1.9 r1.2 r0.2 r2.5 

 Denmark r4.2 7.0 2.3 2.8 r1.7 r2.4 r3.4 

 France 3.6 7.3 1.7 1.7 0.3 -3.4 0.5 

 Germany (2) r2.7 4.6 2.4 1.6 r0.5 -1.1 r2.9 

 Italy 6.4 11.4 3.9 2.6 2.7 0.5 4.2 

 Netherlands r2.8 r3.2 2.7 3.4 1.5 -1.4 2.0 

 Norway 5.0 6.4 4.1 5.1 r3.0 r5.8 r5.6 

 Spain 6.9 10.1 5.5 5.6 3.3 r3.3 r3.2 

 Sweden r5.4 r8.8 r1.9 5.3 r2.3 r1.9 r3.0 

 United Kingdom 3.9 7.1 1.5 3.3 0.8 r-0.4 r3.8 

 -------------------------------------------------------------------------------------------------------- 

 Continued on next page
- 9 -

 Table B. Output per hour, hourly compensation, unit labor costs, and related measures 

 Manufacturing, 16 countries or areas, 1979-2006 

 Average annual rates of change(1) 

 -------------------------------------------------------------------------------------------------------- 

 Country or area 1979-2006 1979-1990 1990-1995 1995-2000 2000-2006 2004-2005 2005-2006 

 -------------------------------------------------------------------------------------------------------- 

 Hourly compensation(3): National currency basis 

 United States 4.7 5.5 3.5 4.7 4.2 4.2 2.5 

 Canada r4.7 6.8 3.6 2.9 r3.3 r4.9 r1.9 

 Australia NA NA 5.4 4.3 r5.4 r6.1 r5.7 

 Japan 2.8 4.6 3.6 1.2 r0.0 r0.8 r-1.4 

 Korea, Republic of NA NA 18.9 8.1 7.8 8.0 6.8 

 Taiwan 7.3 12.1 7.1 3.4 2.1 4.4 2.1 

 Belgium 4.3 6.1 3.8 2.0 r3.4 r3.5 2.1 

 Denmark r5.4 8.1 2.9 2.9 r4.9 r6.9 r3.1 

 France 5.9 9.8 4.6 2.8 2.5 -0.6 2.6 

 Germany (2) r4.5 5.6 6.4 3.1 r2.3 r1.2 r4.1 

 Italy 6.8 11.6 5.0 2.8 2.9 3.0 1.8 

 Netherlands 4.0 4.1 4.5 3.4 3.9 2.0 2.8 

 Norway r6.3 9.0 3.4 5.2 r4.8 r4.7 r4.5 

 Spain 7.2 11.4 8.2 1.4 r3.7 r3.9 r3.0 

 Sweden 6.2 9.1 r3.7 r4.8 r4.1 r3.4 r3.8 

 United Kingdom 7.0 10.6 4.2 4.2 5.5 r4.4 r6.9 

 Unit labor costs(3): National currency basis 

 United States r0.8 2.6 -0.2 -0.8 r-0.4 r1.9 r0.5 

 Canada r2.3 4.6 0.3 -0.9 r2.4 r1.0 r2.0 

 Australia NA NA 2.4 0.5 r3.4 r5.1 r5.4 

 Japan r-0.9 0.8 0.3 -2.2 r-3.7 r-5.4 r-3.2 

 Korea, Republic of 4.4 8.1 8.7 -2.4 0.4 1.1 -3.6 

 Taiwan 1.5 5.6 2.3 -2.1 -3.6 -2.7 -4.4 

 Belgium r0.8 1.8 0.7 r-0.9 r0.6 r0.4 r-0.1 

 Denmark r3.0 5.7 0.2 1.1 r2.1 r5.7 r-2.0 

 France 2.0 5.9 0.7 -1.7 -0.8 -4.7 -1.0 

 Germany (2) r1.6 3.3 3.4 -0.5 r-1.3 r-2.5 r-2.8 

 Italy 5.0 8.5 2.3 1.9 3.6 3.1 0.4 

 Netherlands 0.6 r0.8 0.7 0.1 0.7 -1.4 -0.3 

 Norway 4.2 6.9 r3.3 3.7 0.3 r1.2 1.2 

 Spain 4.6 7.8 4.9 0.5 r1.8 r2.3 r0.3 

 Sweden r1.6 r6.9 r-1.8 -1.9 r-2.2 r-2.6 r-2.0 

 United Kingdom 3.3 6.2 1.0 2.0 r1.1 r0.8 r2.3 

 -------------------------------------------------------------------------------------------------------- 

 Continued on next page
- 10 -

 Table B. Output per hour, hourly compensation, unit labor costs, and related measures 

 Manufacturing, 16 countries or areas, 1979-2006 

 Average annual rates of change(1) 

 -------------------------------------------------------------------------------------------------------- 

 Country or area 1979-2006 1979-1990 1990-1995 1995-2000 2000-2006 2004-2005 2005-2006 

 -------------------------------------------------------------------------------------------------------- 

 Unit labor costs(3): U.S. dollar basis 

 United States r0.8 2.6 -0.2 -0.8 r-0.4 r1.9 r0.5 

 Canada 2.4 4.6 -2.9 -2.4 r7.2 r8.5 r9.0 

 Australia NA NA 1.3 -4.2 r8.0 r8.8 r4.1 

 Japan r1.5 4.6 9.4 -4.8 r-4.9 r-7.0 r-8.4 

 Korea, Republic of 1.8 4.4 6.9 -9.5 3.2 13.1 3.5 

 Taiwan 1.8 8.5 2.7 -5.3 -4.2 1.1 -5.6 

 Belgium r0.5 0.6 3.3 r-8.4 r5.9 r0.5 r0.8 

 Denmark r2.5 4.1 2.2 -6.1 r7.5 r5.6 r-1.1 

 France 1.2 3.6 2.5 -8.4 4.4 -4.6 -0.1 

 Germany (2) r2.2 4.5 5.9 -8.0 r3.9 r-2.4 r-1.9 

 Italy 2.6 5.0 -3.8 -3.1 9.0 3.2 1.3 

 Netherlands 1.1 r1.7 3.3 -7.6 6.0 -1.3 0.6 

 Norway 3.3 4.9 3.1 -2.9 r5.7 r5.9 1.7 

 Spain 2.0 3.8 0.8 -6.6 r7.2 r2.4 r1.2 

 Sweden r-0.4 r3.8 r-5.4 -6.7 r1.5 r-4.2 r-0.7 

 United Kingdom 2.7 4.5 -1.4 1.1 4.4 r0.1 r3.6 

 Exchange rates(4) 

 United States -- -- -- -- -- -- -- 

 Canada 0.1 0.0 -3.2 -1.6 4.6 7.4 6.8 

 Australia -1.5 -3.2 -1.1 -4.7 4.4 3.6 -1.2 

 Japan 2.4 3.8 9.1 -2.7 -1.3 -1.8 -5.3 

 Korea, Republic of -2.5 -3.4 -1.7 -7.3 2.9 11.9 7.3 

 Taiwan 0.4 2.7 0.3 -3.3 -0.6 3.9 -1.2 

 Belgium -0.3 -1.2 2.5 -7.6 5.3 0.1 0.9 

 Denmark -0.5 -1.5 2.0 -7.1 5.3 -0.1 0.9 

 France -0.8 -2.2 1.8 -6.8 5.3 0.1 0.9 

 Germany (2) 0.6 1.1 2.5 -7.5 5.3 0.1 0.9 

 Italy -2.3 -3.3 -6.0 -4.9 5.3 0.1 0.9 

 Netherlands 0.5 0.9 2.6 -7.6 5.3 0.1 0.9 

 Norway -0.9 -1.9 -0.3 -6.4 5.5 4.6 0.5 

 Spain -2.5 -3.7 -3.9 -7.1 5.3 0.1 0.9 

 Sweden -2.0 -2.9 -3.7 -4.9 3.7 -1.6 1.3 

 United Kingdom -0.5 -1.6 -2.4 -0.8 3.3 -0.7 1.3 

 -------------------------------------------------------------------------------------------------------- 

 r=revised NA=data not available 

 (1) Rates of change based on the compound rate method. 

 (2) Data for years before 1991 pertain to the former West Germany. 

 (3) Adjusted for employment taxes and government subsidies to estimate the actual cost to employers. 

 (4) Value of foreign currency relative to the U.S. dollar.
- 11 -

Trade-weighted unit labor costs

BLS constructs indexes of U.S. unit labor cost trends relative to a trade-weighted 

average of unit labor cost trends in the other economies to take account of differences in 

the relative importance of foreign economies to U.S. trade in manufactured goods. 

Relative trade-weighted unit labor cost indexes are calculated on both a national currency 

and a U.S. dollar basis. 

In this release, the relative U.S. trade-weighted indexes are estimated against 14 

economies for which comparable data are available over the period of comparison; the 

indexes underlying this chart are shown in table C. 

Chart 3 begins in 1979, a year in which U.S. manufacturing output reached a business 

cycle peak. 

Chart 3. U.S. manufacturing unit labor 

costs relative to 14(1) other economies, 1979-2006

70.0

80.0

90.0

100.0

110.0

120.0

130.0

1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005

(1979 = 100)

 U.S. dollar

basis

National 

currency basis

(1) Australia has been omitted from this chart because data are not available before 1990.

In the chart, the dotted line shows that, on a national currency basis, U.S. unit labor 

costs tended to fall more or increase less than unit labor costs in the other economies 

throughout this period. 

The solid line compares the unit labor costs on a U.S. dollar basis. From 1979 to 

1985, and again from 1995 to 2001, U.S. unit labor costs on a U.S. dollar basis generally 

rose more or declined less than in the other economies, due to the appreciation of the 

dollar. Since 2001, relative U.S. unit labor costs declined with the weakening of the U.S. 

dollar. 
- 12 -

 Table C. U.S. manufacturing unit labor 

 costs relative to 14(1) competitors, 1979-2006 

 ---------------------------------------------------------------- 

 Unit Labor Costs Unit Labor Costs 

 National Currency Basis U.S. Dollar Basis 

 Year Own Competitors' Own Competitors' 

 Index Index Ratio Index Index Ratio 

 ---------------------------------------------------------------- 

 1979 100.0 100.0 100.0 100.0 100.0 100.0 

 1980 112.7 111.4 101.2 112.7 109.9 102.6 

 1981 117.6 120.8 97.4 117.6 108.8 108.1 

 1982 127.4 131.3 97.0 127.4 108.5 117.5 

 1983 122.7 133.8 91.7 122.7 106.6 115.1 

 1984 123.8 133.8 92.5 123.8 100.1 123.7 

 1985 126.2 136.3 92.6 126.2 98.1 128.6 

 1986 130.1 141.8 91.7 130.1 117.5 110.7 

 1987 125.4 145.0 86.5 125.4 134.2 93.4 

 1988 126.4 147.8 85.6 126.4 146.8 86.1 

 1989 129.4 151.7 85.2 129.4 148.7 87.0 

 1990 133.2 158.3 84.1 133.2 161.9 82.3 

 1991 136.7 166.6 82.1 136.7 171.6 79.7 

 1992 137.8 170.1 81.0 137.8 176.1 78.2 

 1993 136.7 170.9 80.0 136.7 168.7 81.0 

 1994 134.1 168.3 79.7 134.1 165.8 80.9 

 1995 131.6 170.0 77.4 131.6 175.3 75.1 

 1996 129.1 171.8 75.1 129.1 171.2 75.4 

 1997 127.1 169.4 75.0 127.1 157.2 80.8 

 1998 125.7 170.4 73.8 125.7 146.9 85.6 

 1999 124.4 167.0 74.5 124.4 147.0 84.6 

 2000 126.2 162.6 77.6 126.2 138.6 91.0 

 2001 127.7 168.2 75.9 127.7 134.9 94.7 

 2002 123.9 168.6 73.5 123.9 136.6 90.6 

 2003 124.7 168.1 74.2 124.7 153.0 81.5 

 2004 120.1 166.6 72.1 120.1 163.7 73.3 

 2005 122.4 165.0 74.2 122.4 167.4 73.1 

 2006 123.0 164.2 74.9 123.0 170.3 72.2 

 ---------------------------------------------------------------- 

 (1) Australia has been omitted from this table because data are 

 not available before 1990.
- 13 -

Technical Notes

With the exception of the United States, the comparisons in this release are based on data 

available to the Bureau of Labor Statistics as of the end of December 2007. The United 

States data incorporate the BEA manufacturing output revisions of January 29, 2008. 

Definitions. Labor productivity is defined as real output per hour worked. Although the 

labor productivity measure presented in this release relates output to the hours worked of 

persons employed in manufacturing, it does not measure the specific contributions of 

labor as a single factor of production. Rather, it reflects the joint effects of many 

influences, including new technology, capital investment, capacity utilization, energy use, 

and managerial skills, as well as the skills and efforts of the workforce. 

Unit labor costs are defined as the cost of labor input required to produce one unit of 

output. They are computed as compensation in nominal terms divided by real output. 

Unit labor costs can also be computed by dividing hourly compensation by output per 

hour, that is, by labor productivity. 

Methodology. BLS constructs trends of manufacturing labor productivity and unit labor 

costs from three basic aggregate measures: output, total labor hours, and total 

compensation. The hours and compensation measures, as well as the employment 

measures, refer to employees (wage and salary earners) in Belgium and Taiwan. For all 

other economies, the measures refer to all employed persons, including employees, selfemployed persons, and unpaid family workers. 

In general, the measures relate to total manufacturing as defined by the International 

Standard Industrial Classification (ISIC). However, the measures for France include parts 

of mining. Data for the United States are in accordance with the North American Industry 

Classification System (NAICS 97), except compensation data before 1987. Canadian 

data are in accordance with NAICS 97 starting in 1961. 

The data for the most recent years are based on the United Nations System of National 

Accounts 1993 (SNA 93). For earlier years, data were compiled according to previously 

used systems. 

To obtain historical time series, BLS may link together data series which were compiled 

according to different accounting systems by national statistical offices. 

Output. For most of the economies, the output measures are real value added in 

manufacturing, based on national accounts. However, output for Japan prior to 1970 and 

for the Netherlands prior to 1960 are indexes of industrial production. The manufacturing 

value added measures for the United Kingdom are essentially identical to their indexes of 

industrial production. 

Most economies now estimate manufacturing real output using moving price weights, as 

recommended by SNA 93. However, many earlier time periods within the historical real 

output series have been estimated using fixed price weights, with the weights updated 

periodically (for example, every 5 or 10 years). Taiwan and Korea still use fixed price 

weights to estimate real output. 
- 14 -

Measures of real output also may differ among economies because of different 

approaches to quality adjustments. 

For the United States, the output measure for the manufacturing sector is a chainweighted index of real gross product originating (deflated value added) produced by the 

Bureau of Economic Analysis (BEA) of the U.S. Department of Commerce. For more 

information on the U.S. measure, see "Improved Estimates of Gross Product by Industry 

for 1947-98," Survey of Current Business, June 2000, pp. 24-38 and "Gross Domestic 

Product by Industry for 1947-86. New Estimates Based on the North American Industry 

Classification System," Survey of Current Business, December 2005, pp. 70-84. 

The U.S. manufacturing output series used for international comparisons differs from the 

manufacturing output series that BLS publishes as part of its major sector productivity 

and costs measures for the United States. The international comparisons program uses a 

value added output concept, while the major sector series is on a sectoral output basis. 

Sectoral output is gross output less intra-sector sales and transfers. The U.S. major sector 

productivity and costs measures can be found at http://www.bls.gov/lpc/home.htm. For 

information on sectoral output, see "Measurement of productivity growth in U.S. 

manufacturing," Monthly Labor Review, July 1995, pp. 13-28. 

Value added measures have been used for the international comparisons series because 

the data are more readily available from the economies' national accounts, whereas 

sectoral output would require a complex estimation procedure. Even though BLS has 

determined that sectoral output is the correct concept for U.S. measures of productivity, 

there are other considerations that may make value added a better concept for 

international comparisons of labor productivity, such as differences among economies in 

the extent of vertical integration of industries. 

Labor Input. For the most recent years, the term "hours" refers to hours worked. For 

some earlier years, BLS uses other hours measures. 

For the United States, the employment and hours data series beginning with 1987 are 

taken from the NAICS-based manufacturing all-employed series published by BLS as 

part of the major sector productivity and cost measures. For the period before 1987, 

these series are linked to NAICS-based, employees-only data from the Current 

Employment Statistics (CES) program. 

For most other economies, recent years' aggregate hours series are obtained from national 

statistical offices, usually from national accounts. However, for some earlier years, BLS 

calculates the aggregate hours series using employment figures published with the 

national accounts, or other comprehensive employment series, and data on average hours 

worked. 

Compensation (Labor Cost). The compensation measures are from national accounts. 

Compensation includes employer expenditures for legally required insurance programs 

and contractual and private benefit plans, in addition to all payments made in cash or in 

kind directly to employees. When data for the self-employed are not available, total 

compensation is estimated by assuming the same average compensation for the selfemployed as for employees. 
- 15 -

Labor cost is defined as compensation plus employment taxes minus employment 

subsidies, i.e. the cost to employers of using labor. For most economies, labor cost is the 

same as compensation. However, for Australia, Canada, France, and Sweden, 

compensation is increased to account for important taxes on payroll or employment. For 

the United Kingdom, compensation is reduced between 1967 and 1991 to account for 

subsidies. 

Data for Germany. German data prior to 1991 pertain to the former West Germany. The 

data series are linked in 1991. 

Data for Australia. Australian data are published by fiscal years, which run from July 1 

through June 30. The Australian Bureau of Statistics provides unpublished calendar-year 

data for real value added, employment, and hours worked. For compensation, BLS 

estimates calendar-year series using two-year moving averages of the data for fiscal 

years. Manufacturing compensation data are not available for years prior to 1990. 

Data for Recent Years. The measures for recent years may be estimates based on various 

current indicators until national accounts and other preferred statistics become available. 

Trade-Weighted Measures. The trade weights used to calculate the relative unit labor cost 

indexes of the United States and the other economies are based on the relative dollar 

value of U.S. trade in manufactured commodities (exports plus imports) with each 

economy in 2006. The trade data are compiled by the U.S. Census Bureau. 

The following weights were used for the entire period for which trade-weighted unit 

labor cost measures are produced: 

Weight Weight 

 Canada 36.10 Germany 10.38 

 Japan 16.44 Italy 3.58 

 Korea 6.24 Netherlands 3.68 

 Taiwan 4.86 Norway 0.51 

 Belgium 2.81 Spain 1.26 

 Denmark 0.62 Sweden 1.44 

 France 4.75 United Kingdom 7.31 

Level Comparisons. The BLS measures are limited to trend comparisons. BLS does not 

prepare level comparisons of manufacturing productivity and unit labor costs because of 

data limitations and technical problems in comparing the levels of manufacturing output 

among economies. Each economy measures manufacturing output in its own currency 

units. To compare outputs among economies, a common unit of measure is needed. 

Market exchange rates are not suitable as a basis for comparing output levels. What is 

needed are purchasing power parities, which are the number of foreign currency units 

required to buy goods and services equivalent to what can be bought with one unit of 

U.S. currency. 
- 16 -

Purchasing power parities are available for total gross domestic product (GDP) from the 

Organization for Economic Cooperation and Development (OECD). However, these 

parities are derived for expenditures made by consumers, business, and government for 

goods and services - not for value added by industry. Therefore, they do not provide 

purchasing power parities by industry. The parities developed for total GDP are not 

suitable for each component industry, such as manufacturing. 

European exchange rates. On Jan. 1, 1999, 11 European countries joined the European 

Monetary Union (EMU). In subsequent years they were joined by Greece and Slovenia. 

The euro, the official currency of the EMU, was established at fixed conversion rates to 

the previous national currencies of EMU members. Data on manufacturing value added 

and labor compensation for euro-area countries are now reported in euros. 

In order to maintain historical continuity of data series, data for euro-area countries for 

years before 1999 have been converted to euros by applying the fixed euro/national 

currency conversion rates. For countries and years where output, compensation, and 

exchange rates are converted from national currency units into euros, the following fixed 

conversion rates are used: 

1 euro equals: 40.3399 Belgian francs 1936.27 Italian lire 

 6.55957 French francs 2.20371 Netherlands guilders 

 1.95583 German marks 166.386 Spanish pesetas 

The currency exchange rates cited in this publication are annual averages of daily buying 

rates in New York City.