Technical USDL 04-1832 

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

Media contact: (202) 691-5902 Friday, September 24, 2004 

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

PRODUCTIVITY BY INDUSTRY: 

WHOLESALE TRADE, RETAIL TRADE, 

AND FOOD SERVICES AND DRINKING PLACES, 2003 

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

labor productivity changes for wholesale trade, retail trade, and food services and 

drinking places. In 2003, labor productivity⎯defined as output per hour⎯rose 3.4 

percent for wholesale trade, 5.1 percent for retail trade, and 3.3 percent for food services 

and drinking places. In both the retail and wholesale trade sectors, output increased in 

2003 while hours declined. In food services and drinking places, both output and hours 

increased in 2003. 

 From 1987 to 2003, labor productivity in the wholesale trade sector rose an 

average of 3.5 percent per year. Output increased 4.0 percent per year, and hours 

increased 0.5 percent per year. Labor productivity in retail trade increased 2.9 percent 

per year, while output increased 3.9 percent, and hours increased 0.9 percent per year. In 

food services and drinking places, labor productivity increased at an average annual rate 

of 0.8 percent between 1987-2003, as output increased 2.4 percent and hours grew 1.6 

percent per year. 

Labor compensation and unit labor costs are not reported in this release because data to 

develop these measures for 2003 are not yet available. Industry productivity and cost 

measures are produced and published as source data become available. Measures for 

industries in other sectors have been published in separate releases and can be accessed 

online at HTUhttp://www.bls.gov/schedule/archives/all_nr.htmUTH. 
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2002-03 change 

Labor productivity grew in 15 of the 18 durable and nondurable wholesale trade 

industries measured in 2003. Eight of the nine durable goods and seven of the nine 

nondurable goods wholesale industries had productivity increases. Among the durable 

goods wholesale industries, the highest productivity increases occurred for electrical 

goods (NAICS 4236) and commercial equipment (NAICS 4234), with output per hour 

increases of 8.1 percent and 7.8 percent, respectively. Two other durable wholesale 

industries, furniture and furnishing (NAICS 4232) and lumber and construction supplies 

(NAICS 4233), had output per hour increases in 2003 nearly as high, with gains of 7.6 

percent and 7.4 percent, respectively. Among the nondurable wholesale trade industries, 

druggists’ goods (NAICS 4242) had the highest productivity increase (11.5 percent), 

followed by miscellaneous nondurable goods (NAICS 4249) with an increase of 6.4 

percent. Output increased in 11 of the 18 wholesale trade industries in 2003, while hours 

declined in 14 industries. Labor productivity declined 2.6 percent for wholesale 

electronic markets and agents and brokers (NAICS 425), reflecting a 2.2 percent increase 

in output with a 4.9 percent increase in hours in 2003. 

 Labor productivity rose in 23 of the 27 retail trade industries in 2003. The highest 

increases were 25.3 percent in electronics and appliance stores (NAICS 443) and 15.8 

percent in electronic shopping and mail-order houses (NAICS 4541). Productivity grew 

in five of the six largest retail trade industries, those with more than 1,000,000 

employees. Output grew in 22 of the 27 retail industries, and all but two of these 

industries experienced productivity increases. Hours declined in 17 retail industries, 15 

of which experienced productivity increases. 

Labor productivity increased 3.3 percent in food services and drinking places in 

2003. All four of the industries in this subsector had productivity gains. The largest 

productivity gain occurred for drinking places (NAICS 7224) —5.4 percent. The two 

large industries in this group, full-service restaurants (NAICS 7221) and limited-service 

eating places (NAICS 7222), experienced productivity gains of 3.4 percent and 3.5 

percent, respectively. 

Long-term trends 

 Labor productivity increased in 16 of the 18 durable and nondurable industries in 

the wholesale trade sector from 1987 to 2003. Output per hour rose most rapidly in 

commercial equipment wholesalers (NAICS 4234) and in electric goods wholesalers 

(NAICS 4236), advancing at average annual rates of 13.4 percent per year and 9.3 

percent per year, respectively. Output rose in all but two durable and nondurable 

wholesale industries, petroleum (NAICS 4247) and metal and minerals (NAICS 4235), 

while hours declined in five industries. Productivity rose 4.5 percent per year in 

wholesale electronic markets and agents and brokers (NAICS 425) from 1987 to 2003, 

reflecting average gains in output and hours of 6.2 percent and 1.6 percent, respectively. 
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Output per hour increased in all but 1 of the 27 retail trade industries from 1987 to 

2003. Labor productivity rose at a rapid 14.0 percent per year, on average, in electronics 

and appliance stores (NAICS 443) and 12.5 percent in electronic shopping and mail order 

houses (NAICS 4541). Output increased in 26 of the 27 retail industries, while hours 

increased in 21 industries. Among the six largest retail industries, other general 

merchandise stores (NAICS 4529) had the greatest average productivity gains between 

1987 and 2003, 7.9 percent per year on average, followed by clothing stores, where 

output per hour increased 4.7 percent per year. 

 All three of the food services industries had average annual growth in labor 

productivity of 1.0 percent or less. Labor productivity in drinking places declined 1.0 

percent per year from 1987 to 2003, as output declined 0.7 percent per year and hours 

increased 0.3 percent. 
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Technical note 

 The data in this news release replace the wholesale trade, retail trade, and food 

services and drinking places series published in conjunction with the news release 

Productivity and Costs: Wholesale Trade, Retail Trade and Food Services and Drinking 

Places, 2002 (released December 30, 2003). Data for 2003 should be considered 

preliminary. Due to periodic revision of source data, all measures are subject to revision. 

For this data release, a change in the methodology for estimating the self employed and 

unpaid family workers has caused minor revisions to the indexes of employment, hours, 

and labor productivity for most industries in retail trade, wholesale trade, and food 

services and drinking places. 

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

System (NAICS). The NAICS differs from the Standard Industry Classification (SIC) 

which it replaced, in that it uses a more systematic production-oriented approach to 

categorize economic units and has a greater emphasis on emerging industries and serviceproducing industries. In contrast to the SIC system, NAICS classifies auxiliary 

establishments providing services 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. 

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. Industry output is 

measured as “sectoral output”, the total value of goods or services leaving the industry. 

Industry output measures are sometimes constructed from data on the actual physical 

quantities of goods produced in an industry, but more often are derived from the value of 

the goods or services produced, adjusted for price change. For industries in retail trade, 

wholesale trade, and food services and drinking places, real output indexes are developed 

by dividing industry sales at the greatest level of detail possible by appropriate price 

indexes. 

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 or services between two 

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

periods, as weights. The Tornqvist formula yields the ratio of output in a given year to 

that in the previous year. Ratios for successive years are chained together to form an 

output index. 

 

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 the output 
5

series. The Census of Retail Trade, the Census of Wholesale Trade, and the Census of 

Accommodation and Food Services provide detailed product data that were used to 

construct benchmark indexes for the industries in this report. The Census Bureau also 

publishes annual industry sales data for the years 1992 forward classified according to the 

North American Industry Classification System. Data prior to 1992 were classified 

according to the Standard Industrial Classification (SIC) system. Conversion ratios 

based on 1997 Census data were used to convert these sales data from SIC to NAICS. 

The industry labor input measures represent the hours paid to all workers in the 

industry and are developed mainly from basic data compiled by BLS. Data from the 

Current Employment Statistics (CES) survey, a monthly establishment survey conducted 

by BLS, are supplemented with data from the Current Population Survey (CPS), a 

monthly household survey conducted by the Bureau of the Census for BLS. Data on 

employment and average weekly hours are used to construct measures of total hours for 

different categories of workers. For manufacturing and mining industries, hours of 

production and nonproduction employees are combined. For the trade, transportation, 

and service industries, where self-employed are important, estimates of the hours of 

partners, proprietors, and unpaid family workers are added to hours of supervisory and 

nonsupervisory employees. Hours for different types of workers are treated as 

homogenous and are directly aggregated. The indexes of hours are developed by 

dividing the aggregate hours for each year by the base-period aggregate. 

 Although the labor productivity 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. 

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. 

Productivity data for the NAICS industries in this news release can be obtained in 

several ways: by visiting the Labor Productivity and Costs web site 

(http://www.bls.gov/lpc/home.htm); by sending a request by e-mail (dipsweb@bls.gov); 

or by calling the Division of Industry Productivity Studies (202-691-5618). Historical 

SIC-based industry data are available on the BLS web site or by request. Productivity 

and related series for 3- and 4-digit SIC industries are available through 2000, but will no 

longer be updated. 
2003 

NAICS Industry Employment Output Output

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

Wholesale Trade

42 Wholesale trade 5826 3.5 4.0 0.5 3.4 2.1 -1.3

423 Durable goods 3063 4.9 5.2 0.3 4.8 2.9 -1.8

4231 Motor vehicles and parts 360 3.4 3.6 0.2 4.2 3.8 -0.3

4232 Furniture and furnishings 117 2.0 2.3 0.3 7.6 2.3 -4.9

4233 Lumber and construction supplies 237 0.2 1.6 1.4 7.4 10.2 2.6

4234 Commercial equipment 673 13.4 14.0 0.6 7.8 7.0 -0.7

4235 Metals and minerals 121 -0.2 -0.2 -0.1 0.1 -5.3 -5.4

4236 Electric goods 355 9.3 9.2 -0.2 8.1 4.0 -3.8

4237 Hardware and plumbing 237 1.9 2.6 0.7 3.2 -0.4 -3.5

4238 Machinery and supplies 670 2.1 2.0 -0.1 4.9 1.8 -3.0

4239 Miscellaneous durable goods 293 2.1 2.6 0.4 -3.4 -3.6 -0.3

424 Nondurable goods 2106 1.4 1.8 0.4 3.4 1.2 -2.2

4241 Paper and paper products 158 2.3 2.3 0.0 3.4 -0.7 -4.0

4242 Druggists' goods 215 3.9 6.9 2.9 11.5 9.5 -1.8

4243 Apparel and piece goods 162 0.8 1.2 0.3 -9.3 -5.8 3.9

4244 Grocery and related products 714 1.5 2.4 1.0 3.0 1.1 -1.8

4245 Farm product raw materials 80 3.1 0.2 -2.8 0.3 1.5 1.2

4246 Chemicals 135 0.0 1.0 1.0 -1.0 -2.7 -1.7

4247 Petroleum 110 1.7 -0.7 -2.4 1.8 0.2 -1.6

4248 Alcoholic beverages 138 1.1 2.3 1.1 1.0 4.7 3.7

4249 Miscellaneous nondurable goods 395 0.3 0.3 0.0 6.4 -1.4 -7.3

425 Electronic markets and agents and brokers 657 4.5 6.2 1.6 -2.6 2.2 4.9

42511 Business to business electronic markets 70 9.3 8.2 -1.0 29.1 5.0 -18.7

42512 Wholesale trade agents and brokers 587 2.8 4.8 2.0 -7.5 0.1 8.2

Retail Trade

44, 45 Retail trade 15866 2.9 3.9 0.9 5.1 4.5 -0.6

441 Motor vehicle and parts dealers 1975 1.7 3.0 1.3 1.6 3.1 1.5

4411 Automobile dealers 1319 1.2 2.7 1.5 -0.4 1.6 2.1

4412 Other motor vehicle dealers 158 3.8 6.3 2.4 14.8 26.7 10.4

4413 Auto parts, accessories, and tire stores 497 3.1 3.6 0.5 6.3 4.0 -2.2

442 Furniture and home furnishings stores 597 3.5 4.5 1.0 7.9 7.0 -0.9

4421 Furniture stores 304 3.4 4.1 0.7 5.3 3.8 -1.4

4422 Home furnishings stores 293 3.7 5.0 1.3 11.1 10.8 -0.3

443 Electronics and appliance stores 544 14.0 15.5 1.3 25.3 18.7 -5.3

444 Building material and garden supply stores 1242 3.0 5.1 2.0 6.4 9.3 2.7

4441 Building material and supplies dealers 1077 3.0 5.4 2.3 6.6 9.1 2.4

4442 Lawn and garden equipment and supplies stores 165 3.2 3.5 0.4 5.6 10.8 4.9

445 Food and beverage stores 2953 0.2 0.6 0.3 3.9 1.7 -2.1

4451 Grocery stores 2517 0.2 0.6 0.4 2.7 1.5 -1.2

4452 Specialty food stores 279 -0.2 0.1 0.2 13.9 6.9 -6.2

4453 Beer, wine and liquor stores 158 1.6 0.3 -1.3 11.6 2.1 -8.5

446 Health and personal care stores 981 2.5 3.9 1.3 7.0 4.4 -2.4

447 Gasoline stations 905 2.2 1.6 -0.6 -0.5 -1.7 -1.2

448 Clothing and clothing accessories stores 1391 4.6 4.7 0.1 6.1 6.8 0.7

4481 Clothing stores 1003 4.7 5.0 0.3 5.7 6.6 0.9

4482 Shoe stores 188 4.1 2.7 -1.4 4.0 3.3 -0.7

4483 Jewelry, luggage, and leather goods stores 200 4.2 4.9 0.7 9.5 10.6 1.0

451 Sporting goods, hobby, book, and music stores 727 3.6 5.2 1.5 -0.7 0.4 1.2

4511 Sporting goods and musical instrument stores 490 4.3 5.6 1.3 0.0 2.0 2.1

Table 1. Annual percent change in output per hour and related series: retail trade, wholesale trade, and food services 

and drinking places industries, 1987-03 and 2002-03

Annual percent change, 1987-03 Annual percent change, 2002-03
2003 

NAICS Industry Employment Output Output

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

4512 Book, periodical, and music stores 238 2.1 4.2 2.1 -1.9 -2.7 -0.8

452 General merchandise stores 2827 3.9 5.5 1.5 5.0 5.6 0.5

4521 Department stores 1621 1.3 2.9 1.6 3.3 -1.3 -4.4

4529 Other general merchandise stores 1206 7.9 9.4 1.3 4.9 12.2 7.0

453 Miscellaneous store retailers 1112 3.7 5.1 1.3 4.1 2.2 -1.8

4531 Florists 139 3.1 1.9 -1.2 8.7 7.9 -0.7

4532 Office supplies, stationery and gift stores 462 5.7 6.8 1.0 3.2 3.4 0.1

4533 Used merchandise stores 166 3.2 7.5 4.2 2.2 9.6 7.2

4539 Other miscellaneous store retailers 346 1.8 3.9 2.0 7.4 -1.4 -8.2

454 Nonstore retailers 613 8.9 9.0 0.0 15.4 9.4 -5.2

4541 Electronic shopping and mail-order houses 247 12.5 16.6 3.6 15.8 13.8 -1.7

4542 Vending machine operators 64 1.8 -0.1 -1.9 11.0 -4.8 -14.2

4543 Direct selling establishments 302 3.4 1.6 -1.8 9.5 3.1 -5.8

Food Services and Drinking Places

722 Food services and drinking places 8791 0.8 2.4 1.6 3.3 4.9 1.5

7221 Full-service restaurants 4189 0.9 2.7 1.8 3.4 6.3 2.7

7222 Limited-service eating places 3690 1.0 2.6 1.6 3.5 5.3 1.8

7223 Special food services 518 0.0 1.8 1.7 2.7 -1.6 -4.2

7224 Drinking places, alcoholic beverages 395 -1.0 -0.7 0.3 5.4 -0.8 -5.9

Industry employment may not sum to aggregate levels due to rounding.

Annual percent change, 1987-03 Annual percent change, 2002-03

Table 1. Annual percent change in output per hour and related series: retail trade, wholesale trade, and food services 

and drinking places industries, 1987-03 and 2002-03-- Continued