_ 

For release 10:00 am (EDT) March 20, 2019 USDL-19-0450

Technical information: (202) 691-5606 • mfpweb@bls.gov • www.bls.gov/mfp

Media contact: (202) 691-5902 • PressOffice@bls.gov

MULTIFACTOR PRODUCTIVITY TRENDS – 2018

Private nonfarm business sector multifactor productivity increased 1.0 percent in 2018, the U.S. Bureau of Labor 

Statistics reported today. (See chart 1, table A.) This 2018 increase reflects a 3.5-percent increase in output and a 2.6-

percent increase in the combined inputs of capital and labor. Capital services grew by 2.9 percent and labor input–which 

is the combined effect of hours worked and labor composition–grew by 2.4 percent. Multifactor productivity increased

0.4 percent in 2017. (See table 1.)

Multifactor productivity is calculated by dividing an index of real output by an index of combined units of labor input 

and capital services. Multifactor productivity annual measures differ from BLS quarterly labor productivity (output per 

hour worked) measures because the former also includes the influences of capital services and shifts in the composition 

of the workforce. Measures for the most recent year of this release are preliminary estimates. See the Technical Notes 

for additional information. 

Private business sector multifactor productivity also increased at a 1.0-percent annual rate in 2018. A 3.5-percent 

increase in output outpaced a 2.5-percent increase in the combined inputs of capital and labor in 2018. (See table A, 

table 2.) 

Chart 1. Multifactor productivity, labor productivity, and output per unit of capital services in the private nonfarm

business sector, 1987-2018 

 

 Annual percent change

-6

-4

-2

0

2

4

6

1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Multifactor productivity Labor productivity Output per unit of capial services

2012 NAICS Reclassification

Beginning with this release, all index series have been updated and reflect industry definitions consistent with the 2012 North 

American Industry Classification System (NAICS). As a result, all indexes for the private business and private nonfarm 

measures are rebased to 2012=100 to reflect the new definitions. 
- 2 - 

2018 Multifactor Productivity Trends

The 1.0-percent growth of multifactor productivity in the nonfarm business sector is 0.2 percentage point higher than the 

average annual rate of 0.8 percent from the 1987-2018 period. For the 2007-18 period, reflecting the most recent 

business cycle, multifactor productivity grew at an average annual rate of 0.4 percent as output grew 1.9 percent and 

combined inputs rose 1.5 percent. The average annual increase in combined inputs reflected a 2.3-percent increase in 

capital services along with a 0.9-percent increase in labor input. (See table A.) 

The 1.0-percent multifactor productivity increase was the largest growth since the 2010 increase of 2.6 percent. Over the 

last 8 years, labor productivity growth has been at or below the 1.3 annual percent growth rate of 2018. Labor 

productivity growth can be viewed as the sum of three components: multifactor productivity growth, the contribution of 

capital intensity, and the contribution of shifts in labor composition. The contribution of capital intensity grew 0.7 

percentage points in the 2007-18 period and remains the largest contributor to labor productivity growth in the period. 

(See chart 2.) The contributions of labor composition decelerated slightly between the 2000-07 period and the 2007-18 

period, to 0.2 percent. (See chart 2, table B.) 

Chart 2. Contributions to labor productivity growth in the private nonfarm business sector, 

1987-2018 

 Percentage point

 Note: Multifactor productivity plus the contributions of capital intensity and labor composition may not sum to labor productivity due to 

 independent rounding. 

Revisions to 2017 Multifactor Productivity Growth

In 2017, the multifactor productivity growth rate in the private nonfarm business sector was revised down from an 

average annual rate of 0.9 percent to an average annual rate of 0.4 percent due to a downward revision to output of 0.2

percentage point and an upward revision to combined inputs of 0.3 percentage point. In 2016, the multifactor 

productivity growth rate in the private nonfarm business sector remained as previously published, declining at an

average annual rate of 0.6 percent. (See table D.)

Historical Revisions to Capital Services and Labor Input 1987-2017 

The capital services and labor input estimates in this release reflect important data source revisions to capital and an 

improvement in methodology to estimating labor composition. 

0.4 0.4 0.2 0.3 0.2

0.7 0.7 1.2 1.1

0.7

0.4 0.6

1.4 1.4

0.4

0

0.5

1

1.5

2

2.5

3

1987 -1990 1990 -1995 1995 - 2000 2000 - 2007 2007 -2018

Contribution of labor composition Contribution of capital intensity Multifactor productivity
- 3 - 

The capital measures in this release reflect the July 27, BEA 2018 Comprehensive Update of the National Income 

and Product Accounts (NIPA) as well as the November 1, 2018 Gross Domestic Product by Industry: Second 

Quarter 2018. Historical revisions in these accounts had a notable impact on the measures of capital services due to 

the following: 

• Incorporation of an estimate of the value of capital services in measures of own-account investment in software 

and in R&D beginning with 2007, bringing these measures into greater alignment with economic theory. 

• A reclassification of R&D for software from private fixed investment in software to private fixed investment in 

R&D beginning with 1987, resolving an inconsistency between the NIPA measures of R&D and the source data 

underlying the NIPA measures. 

The labor composition component of labor input incorporated a revised smoothing methodology to better account for 

missing data. Additionally, an educational attainment distinction of college/no college has been added. The impact to the 

long-term growth estimates from the labor composition update were negligible; however, year to year estimates can

show moderate revisions. These revisions span the entire period and are mostly derived from the improved smoothing 

method rather than a change to any trends. 

The impact of these data source and methodology revisions in the recent period can be seen on Table D. 

The impact of the revisions to capital services span the 1987-2017 time series. Average annual growth of capital 

services in the long term has been revised up 0.2 percent. In the most recent business cycle, 2007-17, the revisions were 

more pronounced with a 0.6-percentage point increase in the average annual growth. (See Chart 3.) 

Chart 3. Capital services growth for in private nonfarm business sector, selected periods 

 Average annual growth rates

The revision to capital services in the most recent business cycle can be attributed to the changes in the source data 

treatment of software and research and development (R&D). Software and R&D assets, along with artistic originals, 

make up the intellectual property products category of capital which experienced a 1.1-percentage point upward revision 

over the 2007-16 period. A comparison of the latest business cycle and the long term growth in the intellectual property 

products category depicting the most notable revisions are found in Chart 4. 

3.8 3.5

6.0

3.5

2.3

3.5

3.9 3.5

6.0

3.3

1.7

3.3

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

1987 -1990 1990 -1995 1995 - 2000 2000 - 2007 2007 - 2017 1987-2017

Revised Previously Published
- 4 - 

Chart 4. Capital services growth for intellectual property products in the nonfarm business sector, selected time 

periods

 

 Average annual growth rates

 Revised Previously Published

 

3.2

4.4

6.8

10.6

2.2

3.2

4.4

6.0

0.0

2.0

4.0

6.0

8.0

10.0

12.0

2007 - 2017 1987-2017

Research & Development Software

Artistic Originals Intellectual property products

3.1

3.8 3.8

10.1

2.2

3.2 3.3

5.8

0.0

2.0

4.0

6.0

8.0

10.0

12.0

2007 - 2016 1987-2016

Research & Development Software

Artistic Originals Intellectual property products
- 5 - 

Table A. Productivity, output, and inputs in the private nonfarm business and private business sectors for

selected periods, 1987-2018 

Average annual growth rates

1987-

2018

1987-

1990

1990-

1995

1995-

2000

2000-

2007

2007-

2018

2016-

2017 

2017-

2018

Private nonfarm business1

Productivity

Multifactor Productivity2 0.8 0.4 0.6 1.4 1.4 0.4 0.4 1.0

Labor productivity3 2.0 1.5 1.7 2.9 2.8 1.3 1.1 1.3

Output per unit of capital -0.6 -0.6 -0.5 -0.8 -0.6 -0.5 -0.2 0.6

Output 2.9 3.2 2.9 5.1 2.9 1.9 2.7 3.5

Combined inputs4 2.1 2.8 2.4 3.7 1.4 1.5 2.3 2.6

 Labor Input5 1.4 2.3 1.8 2.5 0.4 0.9 1.9 2.4

 Hours 0.9 1.7 1.2 2.2 0.1 0.5 1.6 2.2

 Labor composition6 0.4 0.5 0.6 0.4 0.4 0.4 0.3 0.2

 Capital services 3.5 3.8 3.5 6.0 3.5 2.3 2.9 2.9

Analytic ratio

 Capital intensity7 2.6 2.1 2.3 3.7 3.4 1.8 1.3 0.7

Private business1

Productivity

Multifactor Productivity2 0.9 0.5 0.5 1.6 1.4 0.4 0.4 1.0

Labor productivity3 2.0 1.6 1.6 3.0 2.8 1.3 1.1 1.4

Output per unit of capital -0.5 -0.5 -0.4 -0.6 -0.5 -0.4 -0.2 0.7

Output 2.9 3.2 2.9 5.1 2.9 1.9 2.6 3.5

 Combined inputs4 2.0 2.7 2.4 3.5 1.4 1.4 2.2 2.5

 Labor Input5 1.3 2.1 1.9 2.4 0.4 0.9 1.8 2.3

 Hours 0.9 1.6 1.3 2.0 0.0 0.6 1.5 2.1 Labor composition6 0.4 0.5 0.6 0.4 0.4 0.4 0.3 0.2 Capital services 3.4 3.8 3.3 5.8 3.4 2.3 2.9 2.8

Analytic ratio

Capital intensity7 2.5 2.1 2.1 3.7 3.4 1.7 1.3 0.7

1 Excludes government enterprises. 

2 Output per combined units of labor input and capital services.

3 Output per hour worked. 

4 The growth rate of each input is weighted by its share of current dollar costs. 

5 Hours worked by age, education, and gender group are weighted by each group’s share of median wages. 

6 Ratio of labor input to hours.

7 Capital services per hour. 
- 6 - 

Table B. Labor productivity and the contributions of capital intensity, labor composition, and multifactor

productivity to labor productivity in the private nonfarm business and private business sectors for selected

periods, 1987-2018

Average annual growth rates/ percentage point

1987-

2017 

1987-

2018*

1987-

1990

1990-

1995

1995-

2000

2000-

2007

2007-

2017 

2007-

2018*

2016-

2017

2017-

2018*

Private nonfarm business1

Labor productivity Growth2 2.0 2.0 1.5 1.7 2.9 2.8 1.3 1.3 1.1 1.3

Contribution of capital intensity3 0.9 0.9 0.7 0.7 1.2 1.1 0.7 0.7 0.5 0.2

Contribution of information

processing equipment (IPE)4 0.3 NA 0.3 0.3 0.6 0.4 0.2 NA 0.2 NA

Contribution of research and 

development (R&D)5 0.1 NA 0.1 0.1 0.1 0.1 0.1 NA 0.1 NA

Contribution of intellectual

property products (IPP) 

excluding R&D6 0.2 NA 0.2 0.2 0.2 0.2 0.2 NA 0.2 NA

Contribution of capital

services excluding IPP & IPE 0.2 NA 0.1 0.2 0.2 0.4 0.2 NA 0.0 NA

Contribution of labor composition7 0.3 0.3 0.4 0.4 0.2 0.3 0.3 0.2 0.2 0.1

Multifactor productivity Growth8 0.8 0.8 0.4 0.6 1.4 1.4 0.3 0.4 0.4 1.0

Contribution of R&D to

multifactor productivity 0.2 NA 0.2 0.2 0.2 0.2 0.1 NA 0.1 NA

Private business1

Labor productivity Growth2 2.0 2.0 1.6 1.6 3.0 2.8 1.3 1.3 1.1 1.4

Contribution of capital intensity3 0.9 0.9 0.7 0.7 1.2 1.1 0.7 0.6 0.5 0.3

Contribution of information

processing equipment (IPE)4 0.3 NA 0.3 0.3 0.6 0.4 0.2 NA 0.2 NA

Contribution of research and 

development (R&D)5 0.1 NA 0.1 0.1 0.1 0.1 0.1 NA 0.1 NA

Contribution of intellectual

property products (IPP) 

excluding R&D6 0.2 NA 0.2 0.2 0.2 0.2 0.2 NA 0.2 NA

Contribution of capital

services excluding IPE & IPP 0.2 NA 0.2 0.1 0.2 0.4 0.2 NA 0.0 NA

Contribution of labor composition7 0.3 0.3 0.4 0.4 0.2 0.3 0.2 0.2 0.2 0.1

Multifactor productivity Growth8 0.9 0.9 0.5 0.5 1.6 1.4 0.4 0.4 0.4 1.0 1 Excludes government enterprises.

2 Output per hour worked. 

3 Capital services per hour multiplied by capital's share of current dollar costs. 

4 Information processing equipment per hour multiplied by its share of current dollar costs. 

5 Research and development per hour multiplied by its share of current dollar costs. 

6 Software and artistic originals per hour multiplied by their share of current dollar costs.

7 Labor composition multiplied by labor's share of current dollar costs. 

8 Output per combined units of labor input and capital services.

* NA identifies where data for the most recent year are not available.

Note: Multifactor productivity plus contribution of capital intensity and labor composition may not sum to labor productivity due to independent 

rounding. Contributions of the components of capital intensity may not sum to the total contribution of capital intensity due to independent rounding. 
- 7 - 

Table C. Real capital services by asset type in the private nonfarm business and private business sectors for

selected periods, 1987-2017 

Average annual growth rates

1987-

2017 

1987-

1990

1990-

1995

1995-

2000

2000-

2007

2007-

2017 

2016-

2017 

Private nonfarm business1

All assets 3.5 3.8 3.5 6.0 3.5 2.3 2.9

 Equipment 4.9 3.9 4.3 9.3 5.0 3.2 3.9

 Information processing equipment (IPE) 9.9 8.7 8.6 18.8 9.6 7.0 7.0

 Computers & related equipment 16.7 18.5 17.4 40.7 14.6 6.9 3.9

 Communication equipment 9.0 6.2 5.3 10.7 9.6 10.7 12.6

 Other IPE 2.9 2.0 3.2 3.4 3.1 2.7 3.5

 All other equipment 2.5 1.7 2.2 4.8 2.9 1.6 2.6

 Structures 1.6 2.9 2.0 2.2 1.3 1.0 1.2

 Intellectual property products (IPP) 6.0 8.0 6.8 8.2 5.5 4.4 5.7

 Research and development 4.4 5.8 5.1 5.6 4.2 3.2 4.2

 Software 10.6 17.5 12.7 15.6 8.3 6.8 8.5

 Artistic originals 3.2 3.8 3.5 4.0 3.6 2.2 2.3

 Rental residential capital 1.2 2.0 0.9 1.9 2.2 0.0 0.7

 Inventories 2.6 3.4 2.3 4.3 2.2 2.0 0.6

 Land 0.8 1.4 1.3 1.2 0.7 0.1 1.2

Private business1

All assets 3.4 3.8 3.3 5.8 3.4 2.2 2.9

 Equipment 4.8 3.6 4.1 9.1 4.9 3.2 3.8

 Information processing equipment (IPE) 10.0 8.7 8.6 18.8 9.6 7.1 6.9

 Computers & related equipment 16.7 18.5 17.4 40.7 14.6 6.9 3.9

 Communication equipment 9.0 6.2 5.3 10.7 9.6 10.7 12.6

 Other IPE 3.0 2.1 3.2 3.4 3.3 2.9 3.5

 All other equipment 2.4 1.4 2.0 4.7 2.8 1.6 2.6

 Structures 1.6 2.8 1.9 2.2 1.3 1.0 1.2

 Intellectual property products (IPP) 6.0 8.1 6.8 8.2 5.5 4.4 5.7

 Research and development 4.4 5.8 5.1 5.6 4.2 3.2 4.2

 Software 10.6 17.5 12.7 15.6 8.3 6.8 8.5

 Artistic originals 3.2 3.8 3.5 4.0 3.6 2.2 2.3

 Rental residential capital 1.2 2.0 0.9 1.9 2.2 0.0 0.7

 Inventories 2.5 2.9 2.3 4.2 2.1 1.9 0.5

 Land 0.7 2.9 1.1 0.8 0.7 -0.1 1.2

1 Excludes government enterprises.

Note: Real capital services by asset type are not available for the most recent reference year. For a brief discussion of methods used in preparing these

data see the Technical Notes in this release.
- 8 - 

Table D. Previous and revised multifactor productivity and related measures for the 2016-2017 and 

2015-2016 period

Annual percent change from previous year

 

 1 Output per combined units of labor input and capital services. 

 2 The growth rate of each input is weighted by its share of current dollar costs.

 3 Hours worked by age, education, and gender group, weighted by each group’s share of total wages.

Sector

Multifactor 

productivity1

Real valueadded 

output

Inputs

Combined 

inputs2 Labor3

Capital 

services

Annual percent change, 2016-2017

Private nonfarm business

Previous 0.9 2.9 2.0 1.9 2.2

Revised 0.4 2.7 2.3 1.9 2.9

Private business 

Previous 0.8 2.7 2.0 1.8 2.2

Revised 0.4 2.6 2.2 1.8 2.9

Annual percent change, 2015-2016

Private nonfarm business

Previous -0.6 1.5 2.1 1.8 2.5

Revised -0.6 1.6 2.2 1.8 3.0

Private business

Previous -0.5 1.6 2.0 1.8 2.5

Revised -0.5 1.6 2.2 1.8 2.9
- - 9 - - 

Technical Notes

Capital Services 

Capital services are the services derived from the stock of physical assets and intellectual property 

assets. There are 90 asset types for fixed business equipment, structures, inventories, land, and 

intellectual property products. Data on investment for fixed assets are obtained from the Bureau of 

Economic Analysis (BEA). Data on inventories are estimated using information from BEA and the 

Internal Revenue Service (IRS) Corporation Income Returns. Data for land in the farm sector are 

obtained from the U.S. Department of Agriculture (USDA). Nonfarm industry detail for land is based 

on IRS book value data. Current-dollar value-added data, obtained from BEA, are used in estimating 

capital rental prices.

BLS provides additional detail in table C on information processing equipment and intellectual 

property products. Information processing equipment is composed of three broad classes of assets: 

computers and related equipment, communications equipment, and other information processing 

equipment. Computers and related equipment includes mainframe computers, personal computers, 

printers, terminals, tape drives, storage devices, and integrated systems. Communications equipment is 

not further differentiated. Other information processing equipment includes medical equipment and 

related instruments, electromedical instruments, nonmedical instruments, photocopying and related 

equipment, and office and accounting machinery. Intellectual property products are composed of three 

broad classes of assets: software, research and development, and artistic originals. Software is 

comprised of pre-packaged and custom. Research and development is creative work undertaken to 

increase the stock of knowledge for the purpose of discovering or developing new products or 

improving existing ones. Research and Development also includes own-account R&D for software

which had previously been classified in software. Artistic originals include theatrical movies, longlived television programs, books, music, and other forms of entertainment. Structures include 

nonresidential structures and residential capital that are rented out by profit-making firms or persons. 

Financial assets are excluded from capital services measures, as are owner-occupied residential 

structures. The aggregate capital services measures are obtained by Tornqvist aggregation of the 

capital stocks for each asset type within each of 60 NAICS industry groupings using estimated rental 

prices for each asset type. Each rental price reflects the nominal rate of return to all assets within the 

industry and rates of economic depreciation and revaluation for the specific asset; rental prices are 

adjusted for the effects of taxes. Current-dollar capital costs can be defined as each asset’s rental price 

multiplied by its constant-dollar stock, adjusting for capital composition effects. 

Capital services measures constructed for the most recent year are preliminary and are based on less 

detail than the rest of the series. These measures consist of 6 asset types as opposed to the 90 asset types 

for fixed business equipment, structures, inventories, land, and intellectual property products included in 

estimates for all previous years. The assets included in the most recent year are structures, fixed business 

equipment, intellectual property products, inventories, rental residences, and land. Investments, 

depreciation, and capital income are estimated for each of these six aggregates. Capital services are 

calculated by a chained superlative Tornqvist index combining stocks of the six asset categories, 

weighted by capital income shares. See the June 2005 Monthly Labor Review article, “Preliminary 

estimates of multifactor productivity growth” located at www.bls.gov/opub/mlr/2005/06/art3full.pdf. 
- 10 - 

Labor Input

Labor input in private business and private nonfarm business is obtained by a chained superlative 

Tornqvist aggregation of the hours worked, classified by age, education, and gender with weights 

determined by each group’s share of the total wage bill. Hours paid of employees are largely obtained 

from the Current Employment Statistics (CES) program. Weekly paid hours are adjusted to hours 

worked using data from the National Compensation Survey (NCS) for 1996 forward and data from the 

BLS Hours at Work survey, conducted for this purpose, prior to 1990. Between 1990 and 1995, weekly 

paid hours are adjusted to hours at work using a combination of NCS and Hours at Work survey data. 

Hours worked for nonproduction and supervisory workers are derived using data from the Current 

Population Survey (CPS), CES, and NCS. The hours worked of proprietors, unpaid family workers, 

and farm employees are derived from the CPS. Hours worked data reflect estimates in the February 6, 

2019 “Productivity and Costs” news release (USDL-19-0188).

The estimates of 2018 hours worked for the private nonfarm business and private business sectors are 

extrapolated from the hours worked reported in the nonfarm business and business sectors, respectively, 

in the February 6, 2019 “Productivity and Costs” news release (USDL-19-0188). The growth rate of 

labor composition is defined as the difference between the growth rate of weighted labor input and the 

growth rate of the hours of all persons. The index of hours worked of all persons including employees, 

proprietors, and unpaid family workers, classified by age, education, and gender are weighted together 

using median wages to compute the labor composition estimates reflecting the different skillset of the 

work force. These cell estimates are smoothed using a three year moving average to address missing 

observations and reduce volatility. 

Additional information concerning data sources and methods of measuring labor composition can be 

found in “Changes in the Composition of Labor for BLS Multifactor Productivity Measures, 2014” 

(www.bls.gov/mfp/mprlabor.pdf). 

Combined Inputs

Labor input and capital services are combined using chained superlative Tornqvist aggregation, applying 

weights that represent each component's average share of total costs. The chained superlative Tornqvist 

index uses changing weights; the share in each year is averaged with the preceding year's share. Total 

costs are defined as the value of output less a portion of taxes on production and imports. Most taxes on 

production and imports, such as excise taxes, are excluded from costs; however, property and motor 

vehicle taxes remain in total costs.

 

Capital Intensity

Capital intensity is the ratio of capital services to hours worked in the production process. The higher the 

capital to hours ratio, the more capital intensive the production process becomes. 
- 11 - 

In a production process, profit-maximizing/cost-minimizing firms adjust the factor proportions of capital 

and labor when the price of one factor is less than the other factor; there is a tendency for the firms to 

substitute the less expensive factor for the more expensive one. In the short run, changes in hours 

worked are more variable than changes in capital services. Changes in hours worked in business cycles 

can result in volatility of the capital intensity ratio over short periods of time. In the long run an increase 

in wages relative to the price of capital will induce the firm to substitute capital for labor, resulting in an 

increase in capital intensity. 

Rising labor costs are, in fact, an incentive for firms to introduce automated production processes. 

Industry estimates of capital to hours ratios can be obtained at www.bls.gov/mfp/mprdload.htm. 

Value-Added Output

Private business sector output is a chain-type, current-weighted index constructed after excluding from 

gross domestic product (GDP) the following outputs: general government, nonprofit institutions, private 

households (including owner-occupied housing), and government enterprises. This release presents data 

for the private business and private nonfarm business sectors. The private business sector accounted for 

approximately 74 percent of GDP in 2017. Additionally, the private nonfarm business sector excludes 

farms from the private business sector, but includes agricultural services. Multifactor productivity 

measures exclude government enterprises, while the BLS quarterly Productivity and Costs series include 

them. 

The output measures are based on the National Income and Product Accounts (NIPA) data released by

BEA on February 28, 2019. The estimates of 2018 output for the private nonfarm business and private 

business sectors are extrapolated from the output reported in the nonfarm business and business sectors, 

respectively, in the March 7, 2019 “Productivity and Costs” news release (USDL-19-00358). 

 

Multifactor Productivity

Multifactor productivity measures describe the relationship between output in real terms and the inputs 

involved in its production. They do not measure the specific contributions of labor or capital, or any 

other factor of production. Rather, multifactor productivity is designed to measure the joint influences of 

technological change, efficiency improvements, returns to scale, reallocation of resources, and other 

factors on economic growth, allowing for the effects of capital and labor. 

The multifactor productivity indexes for private business and private nonfarm business are derived by 

dividing an output index by an index of combined inputs of capital services and labor input. The output 

indexes are computed as chained superlative indexes (Fisher Ideal indexes) of components of real 

output.

Research and Development

The stock of research and development in private nonfarm business is derived by aggregating different 

vintages of constant dollar measures of research and development expenditures and allowing for 

depreciation. Current dollar expenditures for privately financed research and development are obtained 

from annual issues of Research and Development in Industry published by the National Science 

Foundation. BLS develops price deflators and estimates of the rate of depreciation.
- 12 - 

The research and development data in the private nonfarm business sector presented here show the 

effect of spillovers from economic units that conduct research and development. BEA publishes 

measures of research and development investments in each industry that include estimates of the direct 

returns to firms conducting such research and development activities. By combining the direct returns 

to firms conducting research and development with the spillover effect of other firms, a picture of the 

total overall effects of research and development can be drawn.

Further description of these data and methods can be found in BLS Bulletin 2331 (September 1989), 

"The Impact of Research and Development on Productivity Growth" at 

www.bls.gov/mfp/mfparchive.htm. BLS measures of year-to-year contributions of research and 

development to the private nonfarm business sector and measures of the stock of research and 

development are available at www.bls.gov/mfp/rdtable.pdf. 

Other Information

Comprehensive tables containing additional data beyond the scope of this press release are available 

upon request at (202) 691-5606 or at www.bls.gov/mfp/mprdload.htm. More detailed information on 

methods, limitations, and data sources of capital and labor are provided in BLS Bulletin 2178 

(September 1983), “Trends in Multifactor Productivity, 1948-81” (www.bls.gov/mfp/mfparchive.htm) 

and on the BLS Multifactor Productivity website under the title “Technical Information About the BLS 

Multifactor Productivity Measures for Major Sectors and 18 NAICS 3-digit Manufacturing Industries” 

(www.bls.gov/mfp/mprtech.pdf). General information is available on the BLS website at 

www.bls.gov/mfp/mprover.htm. Additional data not contained in the release can be obtained at 

www.bls.gov/mfp. Comprehensive tables can be downloaded at www.bls.gov/mfp/mprdload.htm, 

including data that links 1948-87 SIC data to NAICS data from 1987 forward. This file includes data for 

the private business and private nonfarm business sector. 
- 13 - 

Table 1. Private nonfarm business sector: productivity and related measures for the 1987-20181 period

Annual percent change from previous year

Productivity Inputs

Year

Labor

productivity2

Output 

per unit 

of 

capital

services

Multifactor 

Productivity3 

Valueadded

output4 Labor5 

Capital

Services

6

Combined 

units of 

labor and 

capital 

services7

Capital 

Intensity8 

1988 1.7 0.7 1.0 4.6 3.3 3.8 3.5 1.0

1989 0.9 -0.5 0.2 3.7 3.2 4.2 3.5 1.4

1990 1.8 -1.9 0.1 1.5 0.3 3.5 1.3 3.9

1991 1.9 -3.6 -0.4 -0.5 -1.7 3.2 -0.1 5.7

1992 4.5 1.4 2.9 4.0 0.4 2.6 1.1 3.0

1993 0.3 -0.3 -0.4 3.2 3.5 3.5 3.5 0.6

1994 0.8 0.8 0.5 4.6 4.3 3.8 4.1 0.0

1995 1.2 -0.9 0.3 3.5 2.6 4.5 3.2 2.2

1996 2.2 -0.3 1.0 4.5 2.8 4.9 3.5 2.5

1997 1.8 -0.4 0.8 5.1 3.6 5.6 4.2 2.3

1998 3.1 -0.9 1.5 5.4 2.6 6.3 3.8 4.0

1999 3.8 -0.9 2.1 5.7 2.1 6.7 3.6 4.8

2000 3.4 -1.6 1.5 4.7 1.6 6.5 3.1 5.1

2001 3.1 -3.8 0.6 0.9 -1.8 4.9 0.3 7.2

2002 4.5 -1.6 2.1 1.7 -2.0 3.4 -0.3 6.2

2003 3.9 0.4 2.4 3.3 -0.1 2.9 0.9 3.5

2004 2.9 1.5 2.2 4.2 1.6 2.7 2.0 1.4

2005 2.2 0.5 1.5 4.0 1.8 3.4 2.4 1.7

2006 1.2 -0.2 0.5 3.5 2.6 3.8 3.0 1.4

2007 1.9 -0.8 0.5 2.5 1.2 3.4 2.0 2.7

2008 1.2 -3.8 -1.2 -1.0 -1.4 2.9 0.1 5.2

2009 4.0 -4.7 0.3 -3.6 -6.7 1.1 -3.9 9.2

2010 3.3 2.5 2.6 3.3 0.6 0.8 0.7 0.8

2011 -0.1 0.3 -0.2 2.0 2.5 1.7 2.2 -0.4

2012 0.8 1.2 0.7 3.2 2.8 2.0 2.5 -0.4

2013 0.5 -0.3 0.0 2.3 2.0 2.5 2.2 0.8

2014 0.8 0.3 0.5 3.1 2.5 2.8 2.6 0.5

2015 1.3 0.5 0.9 3.5 2.4 3.0 2.7 0.8

2016 0.1 -1.4 -0.6 1.6 1.8 3.0 2.2 1.5

2017 1.1 -0.2 0.4 2.7 1.9 2.9 2.3 1.3

2018 1.3 0.6 1.0 3.5 2.4 2.9 2.6 0.7

 See footnotes following table 4. Source: Bureau of Labor Statistics
- 14 - 

Table 2. Private business sector: productivity and related measures for the 1987-20181 period

Annual percent change from previous year

Productivity Inputs

Year

Labor

productivity2

Output 

per unit 

of 

capital

services

Multifactor 

Productivity3

Valueadded 

output4 Labor5

Capital

Services6

Combined 

units of 

labor and 

capital

services7

Capital 

Intensity8 

1988 1.5 0.4 0.8 4.3 3.2 3.9 3.5 1.2

1989 1.2 -0.3 0.4 3.8 3.1 4.1 3.4 1.5

1990 2.1 -1.7 0.4 1.6 0.1 3.3 1.2 3.9

1991 1.8 -3.4 -0.4 -0.5 -1.6 3.0 -0.1 5.4

1992 4.7 1.7 3.1 4.2 0.4 2.4 1.1 2.9

1993 0.2 -0.4 -0.4 2.9 3.3 3.3 3.3 0.6

1994 0.6 1.1 0.5 4.8 4.6 3.7 4.3 -0.5

1995 0.8 -1.1 0.0 3.1 2.7 4.3 3.2 1.9

1996 2.5 0.0 1.3 4.7 2.6 4.7 3.3 2.5

1997 2.0 -0.2 1.1 5.2 3.4 5.4 4.1 2.2

1998 3.1 -0.8 1.5 5.2 2.5 6.1 3.7 4.0

1999 4.0 -0.7 2.2 5.7 1.9 6.5 3.4 4.8

2000 3.5 -1.4 1.7 4.8 1.6 6.3 3.1 4.9

2001 3.1 -3.8 0.6 0.8 -1.9 4.8 0.2 7.2

2002 4.4 -1.4 2.1 1.8 -2.0 3.2 -0.3 5.9

2003 4.1 0.6 2.5 3.3 -0.2 2.7 0.8 3.5

2004 3.0 1.5 2.3 4.3 1.5 2.7 1.9 1.5

2005 2.3 0.5 1.5 4.0 1.8 3.5 2.4 1.8

2006 1.2 -0.3 0.5 3.5 2.5 3.8 3.0 1.6

2007 1.8 -0.8 0.5 2.4 1.1 3.2 1.9 2.6

2008 1.1 -3.6 -1.1 -1.0 -1.4 2.7 0.1 4.9

2009 4.1 -4.4 0.4 -3.5 -6.7 1.0 -3.9 8.9

2010 3.3 2.4 2.6 3.3 0.6 0.8 0.7 0.8

2011 -0.2 0.1 -0.3 1.9 2.5 1.8 2.2 -0.4

2012 0.7 1.0 0.6 3.1 2.7 2.1 2.5 -0.3

2013 0.9 -0.1 0.4 2.5 1.9 2.5 2.1 0.9

2014 0.7 0.3 0.4 3.1 2.6 2.8 2.7 0.3

2015 1.2 0.7 0.9 3.6 2.6 2.9 2.7 0.5

2016 0.1 -1.2 -0.5 1.6 1.8 2.9 2.2 1.4

2017 1.1 -0.2 0.4 2.6 1.8 2.9 2.2 1.3

2018 1.4 0.7 1.0 3.5 2.3 2.8 2.5 0.7

 See footnotes following table 4. Source: Bureau of Labor Statistics
- 15 - 

Table 3. Private nonfarm business sector: indexes of productivity and related measures, 1987-20181

Indexes 2012=100

Productivity Inputs

Year

Labor

productivity2

Output 

per unit 

of 

capital

services

Multifactor 

Productivity3

Valueadded

output4 Labor5

Capital

Services6

Combined 

units of 

labor and 

capital

services7

Capital 

Intensity8 

1987 57.5 119.4 79.5 48.5 75.0 40.7 61.0 48.2

1988 58.5 120.2 80.4 50.8 77.5 42.2 63.2 48.6

1989 59.0 119.6 80.5 52.6 80.0 44.0 65.4 49.3

1990 60.1 117.3 80.6 53.4 80.2 45.5 66.3 51.2

1991 61.2 113.1 80.3 53.1 78.8 47.0 66.2 54.1

1992 63.9 114.6 82.6 55.3 79.2 48.2 66.9 55.8

1993 64.1 114.3 82.3 57.0 82.0 49.9 69.3 56.1

1994 64.6 115.2 82.7 59.6 85.5 51.8 72.1 56.1

1995 65.4 114.1 82.9 61.7 87.7 54.1 74.5 57.3

1996 66.8 113.8 83.7 64.5 90.2 56.7 77.1 58.7

1997 68.0 113.3 84.4 67.8 93.4 59.9 80.3 60.0

1998 70.1 112.3 85.7 71.5 95.9 63.6 83.4 62.4

1999 72.8 111.3 87.4 75.5 97.9 67.9 86.4 65.4

2000 75.3 109.5 88.8 79.1 99.5 72.3 89.1 68.8

2001 77.6 105.3 89.3 79.8 97.7 75.8 89.4 73.7

2002 81.1 103.6 91.1 81.2 95.7 78.4 89.1 78.2

2003 84.2 104.0 93.3 83.9 95.6 80.6 89.9 81.0

2004 86.7 105.5 95.4 87.4 97.1 82.8 91.6 82.1

2005 88.6 106.1 96.9 90.9 98.9 85.7 93.8 83.5

2006 89.7 105.8 97.3 94.1 101.5 88.9 96.7 84.7

2007 91.3 105.0 97.9 96.4 102.6 91.9 98.6 87.0

2008 92.4 100.9 96.7 95.4 101.2 94.6 98.7 91.6

2009 96.1 96.2 96.9 92.0 94.4 95.6 94.9 100.0

2010 99.4 98.6 99.5 95.0 94.9 96.4 95.5 100.8

2011 99.2 98.9 99.3 96.9 97.3 98.0 97.6 100.4

2012 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

2013 100.5 99.7 100.0 102.3 102.0 102.5 102.2 100.8

2014 101.3 100.0 100.5 105.5 104.6 105.4 104.9 101.3

2015 102.6 100.5 101.4 109.2 107.1 108.7 107.7 102.1

2016 102.8 99.1 100.8 111.0 109.0 111.9 110.1 103.6

2017 103.9 98.9 101.2 114.0 111.1 115.2 112.6 105.0

2018 105.3 99.6 102.1 118.0 113.8 118.5 115.5 105.7

See footnotes following table 4. Source: Bureau of Labor Statistics
- 16 - 

Table 4. Private business sector: indexes of productivity and related measures, 1987-20181

Indexes 2012=100

Productivity Inputs

Year

Labor

productivity2

Output 

per unit 

of 

capital 

services

Multifactor 

Productivity3

Valueadded

output4 Labor5

Capital

Services6

Combined 

units of 

labor and 

capital

services7

Capital 

Intensity8 

1987 57.0 116.6 78.7 48.6 75.8 41.7 61.8 48.9

1988 57.8 117.0 79.3 50.7 78.3 43.4 64.0 49.4

1989 58.5 116.7 79.6 52.7 80.7 45.1 66.2 50.1

1990 59.7 114.7 79.9 53.5 80.8 46.6 66.9 52.1

1991 60.8 110.8 79.6 53.2 79.5 48.0 66.9 54.9

1992 63.7 112.7 82.0 55.4 79.8 49.2 67.6 56.5

1993 63.8 112.3 81.7 57.1 82.5 50.8 69.8 56.8

1994 64.2 113.5 82.1 59.8 86.3 52.7 72.9 56.6

1995 64.8 112.3 82.1 61.7 88.6 55.0 75.2 57.7

1996 66.4 112.3 83.2 64.6 90.9 57.5 77.7 59.1

1997 67.7 112.1 84.0 67.9 94.0 60.6 80.9 60.4

1998 69.9 111.2 85.3 71.5 96.3 64.3 83.8 62.8

1999 72.7 110.4 87.2 75.6 98.2 68.5 86.7 65.8

2000 75.2 108.9 88.7 79.2 99.8 72.8 89.4 69.1

2001 77.6 104.8 89.2 79.9 97.9 76.3 89.6 74.1

2002 81.0 103.3 91.0 81.3 96.0 78.7 89.3 78.4

2003 84.3 103.9 93.4 84.0 95.8 80.9 90.0 81.1

2004 86.9 105.5 95.5 87.6 97.2 83.1 91.7 82.3

2005 88.8 106.0 97.0 91.1 99.0 86.0 93.9 83.8

2006 89.9 105.6 97.4 94.3 101.5 89.2 96.7 85.1

2007 91.5 104.8 97.9 96.5 102.6 92.1 98.5 87.4

2008 92.6 101.0 96.8 95.5 101.2 94.6 98.7 91.7

2009 96.4 96.5 97.2 92.2 94.4 95.5 94.9 99.8

2010 99.5 98.9 99.7 95.2 95.0 96.3 95.5 100.6

2011 99.3 99.0 99.4 97.0 97.3 98.0 97.6 100.3

2012 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

2013 100.9 99.9 100.4 102.5 101.9 102.5 102.1 100.9

2014 101.6 100.3 100.8 105.7 104.5 105.4 104.9 101.3

2015 102.8 100.9 101.7 109.5 107.2 108.4 107.7 101.8

2016 102.9 99.7 101.1 111.3 109.1 111.6 110.1 103.2

2017 104.1 99.5 101.5 114.2 111.1 114.8 112.5 104.6

2018 105.5 100.1 102.5 118.1 113.6 118.0 115.3 105.3

See footnotes following table 4. Source: Bureau of Labor Statistics
- 17 - 

Footnotes, Tables 1-4

Source: The Bureau of Labor Statistics (BLS) develops productivity measures using output and compensation 

data published by the Bureau of Economic Analysis (BEA), hours data published by other BLS programs, and 

capital data supplied by BEA and U.S. Department of Agriculture. Also see Technical Notes in this release.

(1) The private business sector covers gross domestic product with the exception of the output of general 

government, government enterprises, non-profit institutions, the rental value of owner-occupied real 

estate, and the output of paid employees of private households. The private nonfarm business sector 

further excludes farms but includes agricultural services.

(2) Output per hour worked. 

(3) Output per combined units of labor input and capital services. 

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

(5) Index of hours worked of all persons including employees, proprietors, and unpaid family workers, 

classified by age, education, and gender. This chained superlative index is computed by combining 

changes in the hours of each age, education, and gender group weighted by each group’s share of total 

wages. 

(6) A measure of the flow of capital services used in the sector. Capital services measure the services derived 

from the stock of physical assets and intellectual property products. 

(7) The growth rates of labor input and capital services are combined by weighting with their respective 

shares of current dollar costs as weights, and aggregating into a chained superlative index. 

(8) Capital services per hour.