Internet address: http://www.bls.gov USDL 08-1343 

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

Media contact: (202) 691-5902 Friday, September 26, 2008 

INTERNATIONAL COMPARISONS OF MANUFACTURING PRODUCTIVITY 

AND UNIT LABOR COST TRENDS, 2007 

Manufacturing labor productivity increased in 2007 in 14 of the 16 economies 

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

Republic of Korea and Taiwan had the largest productivity increases of 8.7 percent each, 

while Germany followed with an increase of 5.0 percent. The United States productivity 

increase of 4.1 percent was the fourth largest among the 16 economies compared. Italy and 

Norway both had declines in productivity (-0.5 and -0.2 percent, respectively). 

Over the 2000–2007 period, of the 16 economies studied, only Korea, Taiwan, and 

Sweden had greater productivity growth in manufacturing than the United States. Average 

annual growth rates for selected measures over various time periods 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, 2006–2007

4.1

2.1

3.1 2.8

8.7 8.7

2.1

0.7

2.6

5.0

-0.5

2.8

-0.2

3.8

0.9

2.5

-2

0

2

4

6

8

10

United States

Canada

Australia

Japan

Korea, Rep. of

Taiwan

Belgium

Denmark

France

Germany

Italy

Netherlands

Norway

Spain

Sweden

United Kingdom

(Percent)
- 2 -

Expressed in national currency units, manufacturing unit labor costs increased in ten 

and declined in six of the economies in 2007. The decline for the United States (-0.5 

percent) was the fifth steepest decline among the economies compared. (See chart 2.) 

However, expressed in U.S. dollars, manufacturing unit labor costs increased in 13 of 

the economies and declined in three. Declines in the dollar's exchange rate reversed the 

direction of movement in three countries. The largest contrast was for Australia, from 

+2.8 percent in unit labor costs in national currency to +14.5 percent in unit labor costs 

expressed in U.S. dollars. This difference can be explained by the strong appreciation of 

the Australian dollar relative to the U.S. dollar. 

Chart 2. Percent change in manufacturing unit labor costs, 

2006-2007

-0.5

1.6

2.8

-3.0

-0.9

-6.5

0.5

1.1

0.3

-3.1

2.6

0.2

4.9

1.0

2.6

-0.1

-0.5

7.4

14.5

-4.2

1.8

-7.5

9.7

10.4

9.5

5.8

12.0

9.3

14.9

10.3

12.0

8.5

-9 -7 -5 -3 -1 1 3 5 7 9 11 13 15

United States

Canada

Australia

Japan

Korea, Rep. of

Taiwan

Belgium

Denmark

France

Germany

Italy

Netherlands

Norway

Spain

Sweden

United Kingdom

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, 2006-2007 

 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 4.1 2.3 -1.7 -1.7 0.0 1.7 3.5 -0.5 -0.5 -- 

 Canada 2.1 -1.0 -3.1 -2.9 -0.2 0.6 3.8 1.6 7.4 5.6 

 Australia 3.1 3.4 0.2 1.8 -1.5 6.3 6.0 2.8 14.5 11.4 

 Japan 2.8 2.8 -0.1 0.3 -0.4 -0.3 -0.3 -3.0 -4.2 -1.2 

 Korea, Republic of 8.7 6.5 -2.1 -1.3 -0.8 5.5 7.8 -0.9 1.8 2.7 

 Taiwan 8.7 10.3 1.5 1.4 0.1 3.2 1.6 -6.5 -7.5 -1.1 

 Belgium 2.1 2.5 0.3 0.4 -0.1 3.0 2.7 0.5 9.7 9.1 

 Denmark 0.7 4.1 3.4 0.4 2.9 5.2 1.7 1.1 10.4 9.2 

 France 2.6 1.2 -1.3 -1.3 0.0 1.6 2.9 0.3 9.5 9.1 

 Germany 5.0 6.3 1.3 1.3 -0.1 3.0 1.7 -3.1 5.8 9.1 

 Italy -0.5 1.0 1.5 0.9 0.6 3.7 2.1 2.6 12.0 9.1 

 Netherlands 2.8 3.2 0.4 0.2 0.3 3.4 2.9 0.2 9.3 9.1 

 Norway -0.2 4.3 4.6 3.8 0.7 9.5 4.7 4.9 14.9 9.5 

 Spain 3.8 2.8 -1.0 -0.6 -0.4 3.8 4.9 1.0 10.3 9.1 

 Sweden 0.9 2.5 1.6 0.5 1.1 5.2 3.5 2.6 12.0 9.1 

 United Kingdom 2.5 0.6 -1.9 -2.2 0.4 0.5 2.5 -0.1 8.5 8.6 

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

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

Additional data available

Annual indexes of the variables shown in table A are estimated for the time period 

1950-2007 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 in 14 of the 16 economies compared in 

2007. The United States increase of 4.1 was the fourth largest among the 16 economies. 

This was slightly above the 3.9 percent U.S. average annual increase since 1979. Korea 

and Taiwan led in manufacturing productivity growth (+8.7 percent each), followed by 

Germany (+5.0 percent). Manufacturing productivity decreased in Italy and in Norway 

(-0.5 percent and -0.2 percent respectively). (See tables A and B.) 

 Manufacturing output increased in 15 of the 16 economies in 2007. Taiwan and 

Korea were the leaders in the growth of output. In 2007, growth in manufacturing output 

in Germany, Taiwan and Norway was noticeably higher than their average annual rates of 

increase over the 1979-2007 period. The U.S. increase of 2.3 percent was somewhat 

lower than its average annual increase since 1979. 

While 15 of the manufacturing sectors had increases in 2007 in output, 9 had 

increases in total hours worked. Norway and Denmark had the largest increases in total 

hours worked of 4.6 and 3.4 percent, respectively. Canada had the steepest decline (-3.1 

percent) in hours in 2007, followed by Korea (-2.1 percent), the United Kingdom 

(-1.9 percent). The United States had the fourth steepest decline in hours worked (-1.7 

percent). 

 For the period 2000-2007, total hours worked in manufacturing declined for all 16 

economies. The United Kingdom had the steepest average annual decline (-3.9 percent), 

followed by the United States (-3.1 percent). 

Manufacturing employment increased in 10 of the 16 economies in 2007. Norway 

had the largest increase in employment (+3.8 percent), and Australia was second (+1.8 

percent). Canada had the largest decline in employment (-2.9 percent), followed by the 

United Kingdom (-2.2 percent) and the United States (-1.7 percent). 

Over the 2000-2007 period, the United Kingdom and the United States experienced 

the steepest average annual declines in manufacturing employment (-4.0 and -3.0 percent 

respectively). 

In 2007 average hours worked in manufacturing declined in 7 of the 16 economies 

and increased in 7. The United States and France showed no change in average hours 

worked. This compares to 11 economies with declining average annual manufacturing 

hours over the 2000-2007 period. Australia and Korea had the steepest declines in 

average hours worked in 2007. Denmark had the largest increase in average hours 

worked (+2.9 percent) and Sweden followed with a growth of 1.1 percent. 
- 5 -

Manufacturing hourly compensation and unit labor costs

Total labor compensation in manufacturing increased in 15 of the 16 economies in 

2007. The largest increases were in Norway (+9.5 percent) and Australia (+6.3 percent). 

U. S. compensation rose by 1.7 percent. Japan was the only economy with a decline in 

total labor compensation. (See tables A and B.) 

Hourly compensation in manufacturing also increased in 15 of the 16 economies in 

2007, with Japan again the exception. The largest increases were in the Korea (+7.8 

percent) and Australia (+6.0 percent). The U.S. increase of 3.5 percent in hourly 

compensation was below its average annual increase since 1979. (See tables A and B.) 

Expressed in national currencies, unit labor costs increased in 10 economies in 2007 

and decreased in 6. The largest increase occurred in Norway (+4.9 percent) and the 

largest decline was in Taiwan (-6.5 percent). Unit labor costs in U.S. manufacturing 

decreased by 0.5 percent. 

Expressed in U.S. dollars, manufacturing unit labor costs increased in 13 economies 

in 2007 and declined in 3. The unit labor costs of three economies, Germany, the United 

Kingdom, and Korea, went from decreases to increases when computed on a U.S. dollar 

basis. Australia, with the largest currency appreciation, showed the largest difference, 

from +2.8 percent in unit labor costs in national currency to +14.5 percent in unit labor 

costs expressed in U.S. dollars. 

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

comparative unit labor costs and international competitiveness. In 2007, the U.S. dollar 

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

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

of the U.S. dollar against most currencies continues a trend that began in 2001. In 2007, 

the dollar fell 9.1 percent against the euro, following a decline of 0.9 percent in 2006. 
- 6 -

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

 Manufacturing, 16 countries or areas, 1979-2007 

 Average annual rates of change(1) 

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

 Country or area 1979-2007 1979-1990 1990-1995 1995-2000 2000-2007 2005-2006 2006-2007 

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

 Output per hour 

 United States 3.9 2.8 3.7 5.6 4.6 2.2 4.1 

 Canada 2.4 2.1 3.4 3.8 1.1 -0.1 2.1 

 Australia 2.3 2.2 1.3 3.5 2.1 1.0 3.1 

 Japan 3.6 3.8 3.3 3.4 3.8 1.9 2.8 

 Korea, Republic of NA NA 9.4 10.8 7.6 10.1 8.7 

 Taiwan 5.9 6.1 4.7 5.6 6.4 7.1 8.7 

 Belgium 3.4 4.2 3.1 3.0 2.7 2.2 2.1 

 Denmark 2.3 2.2 2.7 1.8 2.5 5.1 0.7 

 France 3.8 3.8 3.4 4.6 3.5 4.0 2.6 

 Germany (2) 3.0 2.1 2.9 3.7 3.8 7.1 5.0 

 Italy 2.2 3.4 3.8 1.4 -0.2 -0.4 -0.5 

 Netherlands 3.3 3.2 3.7 3.3 3.2 3.2 2.8 

 Norway 1.9 1.9 0.1 1.4 3.7 2.9 -0.2 

 Spain 2.5 3.3 3.1 0.8 2.1 2.0 3.8 

 Sweden 4.4 2.1 5.5 6.8 5.6 5.9 0.9 

 United Kingdom 3.6 4.1 2.8 2.7 3.9 4.9 2.5 

 Output 

 United States 2.8 2.2 3.6 5.4 1.4 2.9 2.3 

 Canada 2.1 1.9 2.2 6.2 -0.3 -1.0 -1.0 

 Australia 1.5 1.6 0.8 2.6 1.1 -1.0 3.4 

 Japan 2.7 4.7 0.4 1.2 2.3 4.3 2.8 

 Korea, Republic of 8.8 10.7 8.2 7.9 6.9 8.5 6.5 

 Taiwan 6.2 7.4 4.4 5.8 5.7 7.5 10.3 

 Belgium 1.9 2.6 0.6 2.9 0.9 2.7 2.5 

 Denmark 1.2 1.3 2.1 1.7 0.3 5.4 4.1 

 France 1.6 1.5 0.6 3.4 1.2 1.1 1.2 

 Germany (2) 1.3 1.2 -1.0 2.2 2.5 5.8 6.3 

 Italy 1.5 2.6 1.6 1.2 -0.2 1.2 1.0 

 Netherlands 2.2 2.4 2.0 3.3 1.4 2.7 3.2 

 Norway 1.0 -0.5 0.7 1.4 3.3 6.9 4.3 

 Spain 2.2 2.1 0.6 5.0 1.5 1.9 2.8 

 Sweden 3.7 1.7 3.8 7.4 4.3 5.2 2.5 

 United Kingdom 0.6 0.9 0.5 1.3 -0.1 1.6 0.6 

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

 Continued on next page 
- 7 -

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

 Manufacturing, 16 countries or areas, 1979-2007 

 Average annual rates of change(1) 

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

 Country or area 1979-2007 1979-1990 1990-1995 1995-2000 2000-2007 2005-2006 2006-2007 

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

 Total hours 

 United States -1.1 -0.6 -0.1 -0.1 -3.1 0.7 -1.7 

 Canada -0.2 -0.2 -1.2 2.3 -1.3 -0.9 -3.1 

 Australia -0.8 -0.7 -0.5 -0.9 -1.0 -1.9 0.2 

 Japan -0.9 0.8 -2.8 -2.1 -1.4 2.4 -0.1 

 Korea, Republic of NA NA -1.1 -2.6 -0.7 -1.4 -2.1 

 Taiwan 0.3 1.2 -0.3 0.1 -0.6 0.3 1.5 

 Belgium -1.5 -1.6 -2.4 -0.1 -1.7 0.5 0.3 

 Denmark -1.1 -1.0 -0.7 -0.1 -2.2 0.3 3.4 

 France -2.1 -2.2 -2.8 -1.1 -2.3 -2.8 -1.3 

 Germany (2) -1.6 -0.9 -3.8 -1.4 -1.3 -1.2 1.3 

 Italy -0.7 -0.8 -2.1 -0.2 -0.1 1.6 1.5 

 Netherlands -1.1 -0.9 -1.7 0.0 -1.8 -0.5 0.4 

 Norway -0.9 -2.3 0.6 0.0 -0.4 3.9 4.6 

 Spain -0.3 -1.2 -2.4 4.1 -0.6 -0.1 -1.0 

 Sweden -0.7 -0.4 -1.7 0.5 -1.2 -0.7 1.6 

 United Kingdom -2.8 -3.1 -2.3 -1.4 -3.9 -3.1 -1.9 

 Employment 

 United States -1.2 -0.8 -0.5 0.0 -3.0 -0.6 -1.7 

 Canada -0.3 -0.3 -1.5 2.2 -1.2 -1.0 -2.9 

 Australia -1.3 -1.3 -2.3 -1.1 -0.7 -1.2 1.8 

 Japan -0.6 1.0 -1.6 -2.0 -1.6 1.5 0.3 

 Korea, Republic of NA NA -0.8 -2.5 0.4 0.3 -1.3 

 Taiwan 0.9 2.0 -0.3 0.4 0.2 1.1 1.4 

 Belgium -1.4 -1.6 -2.2 -0.6 -1.4 -1.1 0.4 

 Denmark -1.1 -0.4 -1.2 -1.2 -2.0 -0.2 0.4 

 France -1.6 -1.8 -2.5 -0.3 -1.8 -1.9 -1.3 

 Germany (2) -1.2 -0.1 -4.2 -0.8 -1.0 -0.9 1.3 

 Italy -0.7 -0.8 -1.9 -0.2 0.2 0.9 0.9 

 Netherlands -1.0 -0.6 -1.6 0.1 -1.8 -0.6 0.2 

 Norway -1.0 -2.2 0.4 0.2 -0.7 3.9 3.8 

 Spain 0.1 -0.7 -2.0 3.3 0.5 -0.2 -0.6 

 Sweden -1.4 -1.0 -3.5 0.2 -1.4 -0.7 0.5 

 United Kingdom -2.8 -2.9 -2.7 -1.2 -4.0 -2.7 -2.2 

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

 Continued on next page 
- 8 -

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

 Manufacturing, 16 countries or areas, 1979-2007 

 Average annual rates of change(1) 

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

 Country or area 1979-2007 1979-1990 1990-1995 1995-2000 2000-2007 2005-2006 2006-2007 

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

 Average hours 

 United States 0.1 0.2 0.4 -0.1 -0.1 1.3 0.0 

 Canada 0.1 0.1 0.3 0.1 -0.1 0.1 -0.2 

 Australia 0.6 0.6 1.9 0.3 -0.3 -0.7 -1.5 

 Japan -0.3 -0.2 -1.3 -0.1 0.1 0.8 -0.4 

 Korea, Republic of NA NA -0.2 -0.1 -1.1 -1.7 -0.8 

 Taiwan -0.6 -0.8 0.0 -0.3 -0.8 -0.8 0.1 

 Belgium 0.0 0.0 -0.2 0.5 -0.3 1.6 -0.1 

 Denmark 0.0 -0.5 0.6 1.1 -0.2 0.5 2.9 

 France -0.5 -0.5 -0.3 -0.8 -0.5 -0.9 0.0 

 Germany (2) -0.4 -0.9 0.4 -0.6 -0.3 -0.2 -0.1 

 Italy -0.1 0.1 -0.2 0.0 -0.3 0.7 0.6 

 Netherlands -0.1 -0.2 0.0 -0.1 0.0 0.1 0.3 

 Norway 0.0 -0.1 0.2 -0.2 0.3 0.0 0.7 

 Spain -0.4 -0.5 -0.4 0.8 -1.1 0.2 -0.4 

 Sweden 0.7 0.7 1.9 0.3 0.2 0.0 1.1 

 United Kingdom 0.0 -0.2 0.4 -0.1 0.1 -0.4 0.4 

 Total labor compensation(3): National currency basis 

 United States 3.5 4.9 3.4 4.5 0.8 4.9 1.7 

 Canada 4.4 6.5 2.4 5.2 2.0 1.0 0.6 

 Australia NA NA 3.2 3.1 4.5 4.4 6.3 

 Japan 1.7 5.5 0.7 -1.0 -1.5 0.9 -0.3 

 Korea, Republic of 13.5 19.6 17.6 5.4 7.3 7.0 5.5 

 Taiwan 7.3 13.5 6.8 3.6 1.3 2.3 3.2 

 Belgium 2.7 4.4 1.3 1.9 1.5 2.5 3.0 

 Denmark 4.2 7.0 2.3 2.8 2.2 3.4 5.2 

 France 3.5 6.7 1.6 1.7 1.3 1.9 1.6 

 Germany (2) 2.7 4.6 2.4 1.6 0.9 2.9 3.0 

 Italy 6.3 11.6 3.9 2.4 2.9 3.6 3.7 

 Netherlands 2.8 3.2 2.7 3.4 1.8 2.3 3.4 

 Norway 5.3 6.4 4.1 5.1 4.5 9.8 9.5 

 Spain 6.8 10.1 5.5 5.6 3.6 4.2 3.8 

 Sweden 5.3 8.8 1.9 5.3 2.6 2.1 5.2 

 United Kingdom 3.8 7.1 1.5 3.3 0.7 3.7 0.5 

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

 Continued on next page 
- 9 -

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

 Manufacturing, 16 countries or areas, 1979-2007 

 Average annual rates of change(1) 

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

 Country or area 1979-2007 1979-1990 1990-1995 1995-2000 2000-2007 2005-2006 2006-2007 

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

 Hourly compensation(3): National currency basis 

 United States 4.6 5.5 3.5 4.7 4.0 4.1 3.5 

 Canada 4.7 6.8 3.6 2.9 3.4 1.9 3.8 

 Australia NA NA 3.8 4.0 5.6 6.4 6.0 

 Japan 2.6 4.6 3.6 1.2 0.0 -1.4 -0.3 

 Korea, Republic of NA NA 18.9 8.1 8.1 8.6 7.8 

 Taiwan 7.0 12.1 7.1 3.4 2.0 1.9 1.6 

 Belgium 4.2 6.1 3.8 2.0 3.3 2.1 2.7 

 Denmark 5.3 8.1 2.9 2.9 4.5 3.1 1.7 

 France 5.8 9.1 4.5 2.8 3.7 4.9 2.9 

 Germany (2) 4.4 5.6 6.4 3.1 2.2 4.1 1.7 

 Italy 7.1 12.5 6.1 2.7 3.0 2.0 2.1 

 Netherlands 3.9 4.1 4.5 3.4 3.6 2.8 2.9 

 Norway 6.3 9.0 3.4 5.2 4.9 5.7 4.7 

 Spain 7.2 11.4 8.2 1.4 4.2 4.3 4.9 

 Sweden 6.0 9.1 3.7 4.8 3.9 2.9 3.5 

 United Kingdom 6.8 10.5 3.9 4.7 4.8 7.1 2.5 

 Unit labor costs(3): National currency basis 

 United States 0.7 2.6 -0.2 -0.8 -0.6 1.9 -0.5 

 Canada 2.2 4.6 0.3 -0.9 2.3 2.0 1.6 

 Australia NA NA 2.4 0.5 3.4 5.4 2.8 

 Japan -0.9 0.8 0.3 -2.2 -3.6 -3.2 -3.0 

 Korea, Republic of 4.3 8.1 8.7 -2.4 0.4 -1.4 -0.9 

 Taiwan 1.1 5.6 2.3 -2.1 -4.2 -4.9 -6.5 

 Belgium 0.8 1.8 0.7 -0.9 0.6 -0.1 0.5 

 Denmark 2.9 5.7 0.2 1.1 1.9 -2.0 1.1 

 France 1.9 5.1 1.0 -1.7 0.1 0.9 0.3 

 Germany (2) 1.4 3.3 3.4 -0.5 -1.5 -2.7 -3.1 

 Italy 4.8 8.8 2.2 1.2 3.1 2.4 2.6 

 Netherlands 0.6 0.8 0.7 0.1 0.4 -0.4 0.2 

 Norway 4.2 6.9 3.3 3.7 1.1 2.7 4.9 

 Spain 4.5 7.8 4.9 0.5 2.0 2.3 1.0 

 Sweden 1.6 6.9 -1.8 -1.9 -1.6 -2.9 2.6 

 United Kingdom 3.1 6.2 1.1 2.0 0.9 2.1 -0.1 

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

 Continued on next page 
- 10 -

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

 Manufacturing, 16 countries or areas, 1979-2007 

 Average annual rates of change(1) 

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

 Country or area 1979-2007 1979-1990 1990-1995 1995-2000 2000-2007 2005-2006 2006-2007 

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

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

 United States 0.7 2.6 -0.2 -0.8 -0.6 1.9 -0.5 

 Canada 2.6 4.6 -2.9 -2.4 7.1 9.0 7.4 

 Australia NA NA 1.3 -4.2 8.9 4.1 14.5 

 Japan 1.3 4.6 9.4 -4.8 -4.8 -8.4 -4.2 

 Korea, Republic of 1.9 4.4 6.9 -9.5 3.3 5.8 1.8 

 Taiwan 1.5 8.5 2.7 -5.3 -4.9 -6.0 -7.5 

 Belgium 0.8 0.6 3.3 -8.4 6.4 0.8 9.7 

 Denmark 2.8 4.1 2.2 -6.1 7.9 -1.1 10.4 

 France 1.4 2.7 2.8 -8.4 6.0 1.8 9.5 

 Germany (2) 2.3 4.5 5.9 -8.0 4.2 -1.8 5.8 

 Italy 2.8 5.2 -3.9 -3.7 9.1 3.3 12.0 

 Netherlands 1.4 1.7 3.3 -7.6 6.2 0.5 9.3 

 Norway 3.7 4.9 3.1 -2.9 7.2 3.2 14.9 

 Spain 2.3 3.8 0.8 -6.6 8.0 3.2 10.3 

 Sweden -0.1 3.8 -5.4 -6.7 2.8 -1.6 12.0 

 United Kingdom 2.9 4.5 -1.4 1.1 4.9 3.4 8.5 

 Exchange rates(4) 

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

 Canada 0.3 0.0 -3.2 -1.6 4.8 6.8 5.6 

 Australia -1.0 -3.2 -1.1 -4.7 5.4 -1.2 11.4 

 Japan 2.2 3.8 9.1 -2.7 -1.3 -5.3 -1.2 

 Korea, Republic of -2.3 -3.4 -1.7 -7.3 2.8 7.3 2.7 

 Taiwan 0.3 2.7 0.3 -3.3 -0.7 -1.2 -1.1 

 Belgium 0.0 -1.2 2.5 -7.6 5.8 0.9 9.1 

 Denmark -0.1 -1.5 2.0 -7.1 5.8 0.9 9.2 

 France -0.4 -2.2 1.8 -6.8 5.8 0.9 9.1 

 Germany (2) 0.9 1.1 2.5 -7.5 5.8 0.9 9.1 

 Italy -1.9 -3.3 -6.0 -4.9 5.8 0.9 9.1 

 Netherlands 0.8 0.9 2.6 -7.6 5.8 0.9 9.1 

 Norway -0.5 -1.9 -0.3 -6.4 6.0 0.5 9.5 

 Spain -2.1 -3.7 -3.9 -7.1 5.8 0.9 9.1 

 Sweden -1.6 -2.9 -3.7 -4.9 4.5 1.3 9.1 

 United Kingdom -0.2 -1.6 -2.4 -0.8 4.1 1.3 8.6 

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

 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 competitors' index, 

which is a trade-weighted average of unit labor cost trends in the other economies, in 

order 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. 

Australia has been omitted because unit labor cost data are not available before 1990. 

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, 1979-2007

60

70

80

90

100

110

120

130

1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007

(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 

from 1979 until 1998. After that, the year-to-year fluctuations do not follow a clear 

trend. 

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, 1979-2007 

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

 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 112.7 111.3 101.3 112.7 109.9 102.6 

 1981 117.6 120.7 97.5 117.6 108.6 108.3 

 1982 127.4 131.1 97.2 127.4 108.2 117.8 

 1983 122.7 133.5 91.9 122.7 106.1 115.6 

 1984 123.8 133.4 92.8 123.8 99.5 124.4 

 1985 126.2 136.0 92.8 126.2 97.6 129.2 

 1986 130.1 141.5 91.9 130.1 117.0 111.2 

 1987 125.4 144.6 86.7 125.4 133.6 93.9 

 1988 126.4 147.4 85.8 126.4 146.0 86.6 

 1989 129.4 151.3 85.5 129.4 147.9 87.5 

 1990 133.3 157.9 84.4 133.3 161.1 82.7 

 1991 136.7 166.1 82.3 136.7 170.7 80.1 

 1992 137.8 169.6 81.3 137.8 175.2 78.7 

 1993 136.7 170.4 80.3 136.7 167.6 81.6 

 1994 134.1 167.8 79.9 134.1 164.7 81.4 

 1995 131.6 169.6 77.6 131.6 174.4 75.5 

 1996 129.0 171.4 75.3 129.0 170.4 75.7 

 1997 127.1 168.9 75.2 127.1 156.4 81.3 

 1998 125.7 169.9 74.0 125.7 146.3 86.0 

 1999 124.4 166.6 74.7 124.4 146.2 85.1 

 2000 126.1 162.2 77.8 126.1 137.7 91.6 

 2001 127.7 167.6 76.2 127.7 134.0 95.3 

 2002 123.8 168.1 73.7 123.8 135.9 91.1 

 2003 124.6 167.6 74.3 124.6 152.1 81.9 

 2004 119.9 165.9 72.3 119.9 162.7 73.7 

 2005 119.5 164.4 72.7 119.5 166.4 71.9 

 2006 121.9 164.1 74.3 121.9 169.8 71.7 

 2007 121.2 163.4 74.2 121.2 178.0 68.1 

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

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

 not available before 1990. 
- 13 -

Technical Notes

The comparisons in this release are based on data available to the Bureau of Labor 

Statistics as of the end of August 2008 from the national statistical offices of the 16 

economies compared. 

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 2007. 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 36.12 Germany 10.64 

 Japan 16.00 Italy 3.54 

 Korea 6.09 Netherlands 3.67 

 Taiwan 4.84 Norway 0.54 

 Belgium 3.02 Spain 1.36 

 Denmark 0.65 Sweden 1.42 

 France 4.82 United Kingdom 7.29 

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. 

Purchasing power parities, for most economies, are available for total gross domestic 

product (GDP) from the Organization for Economic Cooperation and Development 
- 16 -

(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.