Historical, technical USDL 04-1061 

 information: (202) 691-5618 FOR RELEASE: 10:00 a.m. EDT 

Media contact: (202) 691-5902 Wednesday, June 16, 2004 

Internet: http://www.bls.gov/lpc/home.htm 

PRODUCTIVITY AND COSTS IN SELECTED SERVICE-PROVIDING 

 AND MINING INDUSTRIES, 2002 

 The Bureau of Labor Statistics of the U.S. Department of Labor reported today on 

productivity and costs for selected service-providing and mining industries. Labor 

productivity⎯defined as output per hour⎯rose in 2002 in 24 of the additional 32 

industries for which 2002 data are now available. (See box on page 3 for further 

information.) In almost three-fifths of the industries with productivity gains, there was a 

decline in hours that was larger than the decline in output. Output increased in only 12 

industries, and hours rose in just 7 industries. Unit labor costs (the ratio of total 

compensation to output) declined in 17 of the 24 industries with productivity gains. 

 Over the period 1987 to 2002, labor productivity increased in 29 of the 32 

industries. Output rose in 29 industries, while hours grew in 18 industries. Unit labor 

costs fell in 7 of the 29 industries registering productivity growth. 

2001-2002 change 

 Three-fourths of the 32 industries recorded labor productivity gains in 2002. (See 

table 1.) Output per hour increased 4.3 percent in the mining sector with three of the four 

separate mining industries registering productivity growth. Metal ore mining posted the 

largest gain in output per hour at 9.2 percent. The sole decline occurred in coal mining, 

where labor productivity fell 1.9 percent. Unit labor costs in this industry grew 3.8 

percent, the steepest rise in the mining sector. Unit labor costs in metal ore mining, on 

the other hand, fell 5.6 percent. 

 Five of the six utilities and transportation industries covered posted gains in 

output per hour in 2002. The strongest growth occurred in air transportation, where labor 

productivity grew 12.2 percent. Line-haul railroads and general freight trucking, long 
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distance also registered strong productivity gains at 8.3 percent and 5.0 percent, 

respectively. The only industry in this group with a decline was power generation and 

supply, where labor productivity fell 3.8 percent. Two-thirds of the industries had 

decreases in unit labor costs. Unit labor costs fell 5.2 percent in natural gas distribution, 

3.2 percent in general freight trucking, long distance, and 2.5 percent in air transportation. 

Productivity increased in all but one of the information industries in 2002. In the 

detailed 4- and 5-digit information industries, more than three-fourths of the gains were 

greater than 4.5 percent. Double-digit productivity growth (11.2 percent) occurred in 

wireless telecommunications carriers. All but one of the information industries saw 

reductions in unit labor costs. Unit labor costs fell 16.9 percent in wireless 

telecommunications carriers and 9.7 percent in software publishers. 

Among all other service providers (which include industries in the following 

sectors: finance and insurance; real estate and rental and leasing; professional and 

technical services; accommodation and food services; and other services), labor 

productivity rose in 2002 in 6 of the 11 industries for which BLS maintains measures. 

The strongest growth occurred in tax preparation services and photofinishing, at 17.8 

percent and 16.1 percent, respectively. Two of the three largest industries, those with 

more than 1,000,000 employees, posted gains in labor productivity. Output per hour 

increased 2.1 percent in traveler accommodations and 2.2 percent in commercial banking, 

but decreased 5.2 percent in automotive repair and maintenance. Only two of these 

industries had declines in unit labor costs─advertising agencies (8.4 percent) and 

photofinishing (6.7 percent). 

Long-term trends 

From 1987 to 2002, nearly all the industries presented here recorded productivity 

gains. In the mining sector, productivity increased 1.8 percent per year while unit labor 

costs grew 2.4 percent per year. Output per hour rose in all mining industries. The 

largest increases in labor productivity were 4.8 percent per year in metal ore mining and 

4.4 percent per year in coal mining. These were the only industries in the mining sector 

with decreases in unit labor costs. Unit labor costs fell 2.1 percent per year in coal 

mining and 0.7 percent per year in metal ore mining. 

Output per hour increased in all six of the utilities and transportation industries 

over the long-term. The increases ranged from 1.0 percent per year in the postal service 

to 5.5 percent per year in line-haul railroads. Line-haul railroads was the only industry in 

utilities and transportation that experienced a drop in unit labor costs. Four industries had 

unit labor cost increases below 2.0 percent annually. 

From 1987 to 2002, all but one of the information industries posted productivity 

gains. The largest increase, 17.2 percent per year, was in software publishers. Cable and 

other program distribution registered the sole decline in output per hour (-0.6 percent per 
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year). Unit labor costs fell in three industries. In software publishers, unit labor costs 

contracted by 8.8 percent per year. 

Output per hour increased in 9 of the 11 remaining service-providing industries 

over the long term. Among the largest industries, productivity rose 1.3 percent per year 

in traveler accommodations, 2.3 percent annually in commercial banking, and 1.1 percent 

per year in automotive repair and maintenance. All 11 industries experienced rising unit 

labor costs. The increases ranged from 1.2 percent per year to 5.3 percent per year. 

Labor productivity and associated series through 2001 for all 3- 

and 4-digit NAICS manufacturing industries and through 2002 for 

wholesale trade, retail trade, and food services industries have been 

released previously. Selected 5- and 6-digit industries have been available 

by request. 

Data have been revised for labor productivity and related series for 

many industries including those in the manufacturing, retail trade, and 

wholesale trade industries not presented in this release. Labor 

productivity and related data were first published on a NAICS basis at the 

4-digit level. Measures were developed later at the 5- and 6-digit level. 

The aggregation of employment and hours data from the detailed 5- and 6-

digit level resulted in revisions to the employment and hours data for the 

industries at the 4-, 3-, and 2-digit NAICS levels. In addition, data were 

revised for some industries in the information sector and in retail industry 

groups NAICS 453 and 454 to incorporate modifications and 

improvements to data and methodology. The latest data are on the Labor 

Productivity and Costs website (http://www.bls.gov/lpc/home.htm). 

Technical Note 

Data in this news release are based on the North American Industry Classification 

System (NAICS), which replaced the Standard Industrial Classification (SIC) system as 

the basis for assigning and tabulating data by industry. The data in this news release and 

revised data on the BLS website replace the series published in Table 46 of the Monthly 

Labor Review and in the news release Productivity and Costs by Industry, 2001 (released 

September 18, 2003). All of the measures for 2002 in this news release are preliminary 

and subject to revision. 

Overall, the industry productivity series account for 57 percent of the 4-digit 

NAICS industries in the nonfarm business sector of the economy. Expansion of industry 

coverage within the service-providing sector will continue. 
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NAICS-based measures and source data

The NAICS classification system is the product of a cooperative effort on the part 

of the statistical agencies of the United States, Canada, and Mexico. The NAICS differs 

from the SIC in that it uses a production-oriented approach to categorize economic units, 

focusing on how products and services are created in contrast to the SIC focus on what 

was produced. The structure of the NAICS system also is different from that of the SIC, 

with a greater emphasis on emerging industries and service-providing industries. Under 

NAICS, some detailed industries that existed under the SIC were collapsed or combined 

with other industries, while other new industries were added. Treatment of auxiliaries 

also changed under NAICS: NAICS classifies auxiliary units involved in activities such 

as transportation and warehousing; accounting, bookkeeping, and payroll services; and 

general management into specialized industries rather than including them in the 

manufacturing, trade, or service industries they support (as in the SIC). As a result of 

these changes, many of the NAICS industries are significantly different from those in the 

SIC system. 

Industry output indexes are prepared from basic data published by various public 

and private agencies, using the greatest level of detail available. Data from the Bureau of 

the Census, U.S. Department of Commerce, are used extensively in developing output 

series for manufacturing, trade, and service-providing industries, as well as in developing 

compensation and unit labor cost series for manufacturing industries. Census Bureau 

data for years prior to 1997 were classified according to the Standard Industrial 

Classification (SIC) system. The 1997 Economic Censuses provided data on a NAICS 

basis, and data classified according to NAICS began to be provided in subsequent Annual 

Survey reports beginning in 1998 or 1999. Some data for wholesale and retail trade 

industries have been made available by the Census Bureau on a NAICS basis back to 

1992. 

The 1997 Economic Census questionnaires were designed to permit the 

classification of each establishment according to both NAICS and SIC. As a result, the 

Census Bureau tabulated and published 1997 Census data on both a NAICS and SIC 

basis. The Bureau of Labor Statistics used these dual-coded data to calculate conversion 

ratios relating NAICS values to SIC values, and the ratios were used to convert data on 

receipts, value of shipments, inventories, and labor compensation for SIC-based 

industries to estimates for NAICS-based industries for years prior to 1997. 

The labor series used in the industry productivity measures are based primarily on 

employment and average weekly hours data from the Bureau’s Current Employment 

Statistics (CES) survey and the Current Population Survey (CPS). Other sources are the 

Association of American Railroads, the Department of Transportation, and the U.S. 

Postal Service. The CES data were published on a 2002 NAICS basis with the release of 

May 2003 data in June 2003. Historical NAICS data back to 1990 were provided for all 

of the CES series; data for years prior to 1990 were provided for some industries. CES 

NAICS industry series not available back to 1987 were extrapolated back with estimates 

calculated using conversion ratios derived from dual-coded first-quarter 2001 data from 
5

the Covered Employment and Wages Program (ES-202). These ratios also were used to 

convert historical ES-202 wage data from SIC to NAICS for use in the compensation and 

unit labor cost measures for nonmanufacturing industries. 

Productivity measurement

The industry labor productivity measures describe the relationship between output 

and the labor time involved in its production. They show the changes from period to 

period in the amount of goods and services produced per hour. Although these measures 

relate output to hours of employees or all persons engaged in an industry, they do not 

measure the specific contribution of labor, capital, or any other factor of production. 

Rather, they reflect the joint effects of many influences, including changes in technology; 

capital investment; level of output; utilization of capacity, energy, and materials; the 

organization of production; managerial skill; and the characteristics and effort of the 

workforce. 

The indexes of industry output used in measuring labor productivity and unit 

labor costs are, wherever possible, calculated with a Tornqvist formula. This formula 

aggregates the growth rates of the various industry products between two periods using 

the products’ shares in industry value of production, averaged over the two periods, as 

weights. 

Year-to-year movements in productivity measures for some industries might be 

erratic, particularly in the smaller industries. The annual changes in an industry’s output 

and use of labor may reflect cyclical changes in the economy rather than long-term

trends. Also, annual productivity indexes are based on sample data, which are likely to 

differ from data generated by a census of establishments in the industry. As a result, 

long-term trends tend to be more reliable indicators of the performance of an industry 

than are the year-to-year changes. 

Unit labor cost measurement

The unit labor cost series in this release describe the cost of labor input required 

to produce one unit of output. Unit labor costs are calculated as the ratio of current dollar 

labor compensation to constant dollar output. The indexes of unit labor costs for each 

industry are computed by dividing an index of current dollar compensation by an index of 

constant dollar output. 

Compensation is a measure of the cost to the employer of securing the services of 

labor. It is defined as payroll plus supplemental payments. Payroll includes salaries, 

wages, commissions, dismissal pay, bonuses, vacation and sick leave pay, and 

compensation in kind. Supplemental payments are divided into legally required 

expenditures and payments for voluntary programs. The legally required expenditures 

include employers’ contributions to Social Security, unemployment insurance taxes, and 

workers’ compensation. Payments for voluntary programs include all programs not 
6

specifically required by legislation, such as the employer portion of private health 

insurance and pension plans. 

Productivity and unit labor cost data for industries can be obtained in several 

ways: by visiting the Labor Productivity and Costs web site 

(http://www.bls.gov/lpc/home.htm); by calling the Division of Industry Productivity 

Studies (202-691-5618); or by sending a request by e-mail (dipsweb@bls.gov). 

Historical productivity and related series for 3- and 4-digit SIC industries through 2000 

continue to be maintained, but will no longer be updated. SIC-based industry data are 

available on the BLS web site or by request. 

Information in this release will be made available to sensory impaired individuals 

upon request. Voice phone: 202-691-5200; TDD message referral phone number: 1-800-

877-8339. 
Table 1. Annual percent change in output per hour and related series: selected service-providing and mining

industries, 1987-02 and 2001-02

2002 Annual percent change, 1987-02 Annual percent change, 2001-02

NAICS Industry Employment Output Output

code (thousands) per hour Output Hours per hour Output Hours

Mining

21 Mining 512 1.8 -0.1 -1.9 4.3 -2.7 -6.7

211 Oil and gas extraction 122 2.6 -0.8 -3.4 1.6 -2.3 -3.9

212 Mining, except oil and gas 211 3.2 0.9 -2.2 2.5 -3.7 -6.0

2121 Coal mining 74 4.4 0.1 -4.2 -1.9 -5.0 -3.1

2122 Metal ore mining 29 4.8 2.7 -2.0 9.2 -5.8 -13.7

2123 Nonmetallic mineral mining and quarrying 107 1.1 0.8 -0.3 4.5 -1.6 -5.8

Utilities

2211 Power generation and supply 434 3.1 1.4 -1.7 -3.8 -5.7 -1.9

2212 Natural gas distribution 115 3.7 1.8 -1.9 4.4 3.3 -1.1

Transportation and Warehousing

481 Air transportation 509 1.6 2.9 1.3 12.2 -0.8 -11.6

482111 Line-haul railroads 180 5.5 2.2 -3.1 8.3 0.2 -7.5

48412 General freight trucking, long-distance 807 2.2 3.4 1.2 5.0 1.1 -3.7

491 Postal service 842 1.0 1.5 0.5 0.9 -2.9 -3.7

Information

511 Publishing 964 3.8 5.4 1.5 3.7 -2.3 -5.8

5111 Newspaper, book, and directory publishers 711 0.2 0.1 -0.2 1.6 -3.5 -5.0

5112 Software publishers 253 17.2 28.2 9.4 4.7 -3.2 -7.5

51213 Motion picture and video exhibition 173 1.0 3.3 2.3 -0.3 3.8 4.0

5151 Radio and television broadcasting 241 0.2 0.5 0.3 6.4 2.6 -3.6

5152 Cable and other subscription programming 93 1.7 7.9 6.1 4.9 6.3 1.3

5171 Wired telecommunications carriers 651 5.8 5.3 -0.5 8.0 -5.6 -12.6

5172 Wireless telecommunications carriers 197 6.2 23.8 16.5 11.2 12.0 0.7

5175 Cable and other program distribution 130 -0.6 5.3 6.0 6.7 3.9 -2.6

Finance and Insurance

52211 Commercial banking 1278 2.3 2.0 -0.3 2.2 2.8 0.6

Real Estate and Rental and Leasing

532111 Passenger car rental 125 1.5 3.8 2.4 1.1 -5.5 -6.5

53212 Truck, trailer and RV rental and leasing 60 2.5 2.7 0.2 -2.3 -2.0 0.3

Professional and Technical Services

541213 Tax preparation services 101 -0.3 4.0 4.3 17.8 4.4 -11.4

54181 Advertising agencies 190 1.7 1.8 0.2 6.2 -3.0 -8.7

Accommodation and Food Services

7211 Traveler accommodations 1752 1.3 2.4 1.1 2.1 -2.8 -4.8

Other Services

8111 Automotive repair and maintenance 1150 1.1 2.8 1.7 -5.2 -4.2 1.0

81211 Hair, nail, and skin care services 853 1.5 2.8 1.3 -4.8 3.3 8.5

81221 Funeral homes and funeral services 105 -0.9 0.5 1.4 -3.2 -4.4 -1.2

8123 Drycleaning and laundry services 409 1.4 1.2 -0.2 -0.7 -2.9 -2.2

81292 Photofinishing 93 1.8 -0.6 -2.4 16.1 2.1 -12.1
Table 2. Annual percent change in total compensation, output, and unit labor costs: selected service-providing and mining

industries, 1987-02 and 2001-02

2002 Annual percent change, 1987-02 Annual percent change, 2001-02

NAICS Industry Employment Total Unit labor Total Unit labor

code (thousands) compensation Output costs compensation Output costs

Mining

21 Mining 512 2.3 -0.1 2.4 -4.3 -2.7 -1.6

211 Oil and gas extraction 122 2.8 -0.8 3.7 -1.7 -2.3 0.7

212 Mining, except oil and gas 211 0.4 0.9 -0.5 -3.7 -3.7 0.0

2121 Coal mining 74 -2.0 0.1 -2.1 -1.4 -5.0 3.8

2122 Metal ore mining 29 2.0 2.7 -0.7 -11.1 -5.8 -5.6

2123 Nonmetallic mineral mining and quarrying 107 3.2 0.8 2.4 -2.8 -1.6 -1.2

Utilities

2211 Power generation and supply 434 2.8 1.4 1.4 2.2 -5.7 8.3

2212 Natural gas distribution 115 3.5 1.8 1.7 -2.0 3.3 -5.2

Transportation and Warehousing

481 Air transportation 509 4.8 2.9 1.8 -3.2 -0.8 -2.5

482111 Line-haul railroads 180 0.4 2.2 -1.8 0.0 0.2 -0.2

48412 General freight trucking, long-distance 807 4.3 3.4 0.9 -2.2 1.1 -3.2

491 Postal service 842 4.6 1.5 3.1 0.4 -2.9 3.4

Information

511 Publishing 964 7.1 5.4 1.7 -8.0 -2.3 -5.8

5111 Newspaper, book, and directory publishers 711 4.0 0.1 4.0 -4.0 -3.5 -0.6

5112 Software publishers 253 16.9 28.2 -8.8 -12.6 -3.2 -9.7

51213 Motion picture and video exhibition 173 3.8 3.3 0.6 6.6 3.8 2.8

5151 Radio and television broadcasting 241 4.3 0.5 3.8 -3.7 2.6 -6.1

5152 Cable and other subscription programming 93 10.9 7.9 2.8 3.6 6.3 -2.6

5171 Wired telecommunications carriers 651 3.4 5.3 -1.8 -9.3 -5.6 -3.9

5172 Wireless telecommunications carriers 197 19.8 23.8 -3.2 -7.0 12.0 -16.9

5175 Cable and other program distribution 130 9.0 5.3 3.5 1.9 3.9 -2.0

Finance and Insurance

52211 Commercial banking 1278 5.5 2.0 3.4 8.4 2.8 5.4

Real Estate and Rental and Leasing

532111 Passenger car rental 125 6.2 3.8 2.3 -3.4 -5.5 2.2

53212 Truck, trailer and RV rental and leasing 60 3.9 2.7 1.2 1.2 -2.0 3.3

Professional and Technical Services

541213 Tax preparation services 101 9.5 4.0 5.3 7.1 4.4 2.6

54181 Advertising agencies 190 4.9 1.8 3.0 -11.1 -3.0 -8.4

Accommodation and Food Services

7211 Traveler accommodations 1752 5.6 2.4 3.1 -2.1 -2.8 0.8

Other Services

8111 Automotive repair and maintenance 1150 5.4 2.8 2.4 3.5 -4.2 8.1

81211 Hair, nail, and skin care services 853 5.5 2.8 2.6 12.2 3.3 8.6

81221 Funeral homes and funeral services 105 5.1 0.5 4.6 1.9 -4.4 6.6

8123 Drycleaning and laundry services 409 3.2 1.2 2.0 1.5 -2.9 4.5

81292 Photofinishing 93 2.4 -0.6 3.1 -4.8 2.1 -6.7