For release 10:00 a.m. (EDT) Thursday, October 22, 2009 USDL-09-1271

Technical Information: (202) 691-5654 • ilchelp@bls.gov • www.bls.gov/ilc

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

INTERNATIONAL COMPARISONS OF MANUFACTURING PRODUCTIVITY AND 

UNIT LABOR COST TRENDS, 2008

Manufacturing labor productivity decreased in 2008 in 12 of the 17 economies compared 

by the U.S. Department of Labor’s Bureau of Labor Statistics. The Republic of Korea 

and the United States had the largest productivity increases (1.2 percent each) among the 

five economies where productivity increased. Singapore had the steepest productivity 

decline (-6.6 percent). (See chart 1.)

For all economies, labor productivity in manufacturing increased less or declined more in 

2008 than the average annual changes over the 2000–2008 period, when almost all of the 

economies studied experienced productivity increases. 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.) 

1.2 1.2 0.7 0.5 0.3

-0.1 -0.2 -0.5 -0.9 -0.9 -0.9 -1.4

-2.6

-3.4 -3.6

-4.5

-6.6

-8

-6

-4

-2

0

2

4

Chart 1. Percent change in

manufacturing output per hour, 2007–2008

(Percent)
- 2 -

Changes in unit labor costs can be expressed either in national currency units or in U.S. 

dollars. Expressed in national currency units, manufacturing unit labor costs increased in 

all 17 economies in 2008. The increase for the United States and for Taiwan (+1.7 

percent) was the second lowest among the economies compared. Expressed in U.S. 

dollars, manufacturing unit labor costs increased even more in 14 of the economies, 

because of the weakening dollar. The U.S. manufacturing sector improved its labor cost 

competitiveness in 2008 against all economies compared except the Republic of Korea 

and the United Kingdom, where unit labor cost expressed in U.S. dollars declined, 

because their currencies weakened against the dollar. (See chart 2.)

2.0

8.3

7.5

6.2

5.8

4.7

3.8

2.7

2.4

6.9

4.9

1.7

4.8

3.6

1.7

2.2

0.8

16.2

15.8

14.6

14.1

13.6

12.4

11.5

10.3

10.0

9.7

9.0

6.0

5.6

5.4

1.7

-5.3

-14.8

-17 -15 -13 -11 -9 -7 -5 -3 -1 1 3 5 7 9 11 13 15 17

Japan

Denmark

Singapore

Italy

Spain

Netherlands

France

Germany

Belgium

Sweden

Norway

Taiwan

Canada

Australia

United States

United Kingdom

Korea, Rep. of

Chart 2. Percent change in manufacturing unit labor costs, 2007-2008

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

Additional data available

Annual indexes of the variables shown in table A are estimated for the time period 1950-

2008 and are available at http://www.bls.gov/ilc/. However, for analytical purposes, the 

international comparisons in this release go back to 1979. 

For further information, contact the Division of International Labor Comparisons (ILC), 

in the Office of Productivity and Technology by phone at 202-691-5654, by e-mail 

at ilchelp@bls.gov, or by mail at Bureau of Labor Statistics, 2 Massachusetts Avenue, 

NE, Room 2150, Washington, DC 20212. 

Subscribe to ILC's e-newsletter Just Out! by e-mailing ILCpr@bls.gov with "subscribe" 

in the subject line. This e-newsletter will provide you with links to the latest ILC 

releases, which usually occur once or twice per month. 

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

 Manufacturing, 17 countries or areas, 2007-2008

 

 Percent change 

_________________________________________________________________________________________________________________________

 Unit Labor Costs

 Total Hourly ----------------

 Output Total Employ- Average Compensa- Compensa- National U.S. Exchange

Country or area per hour Output hours ment hours tion tion currency dollars rate(1)

_________________________________________________________________________________________________________________________

United States 1.2 -2.7 -3.9 -3.4 -0.5 -1.0 3.0 1.7 1.7 --

Canada -2.6 -5.7 -3.2 -2.6 -0.6 -1.1 2.1 4.8 5.6 0.7

Australia -0.9 1.6 2.6 1.5 1.1 5.3 2.7 3.6 5.4 1.7

Japan -0.2 -3.4 -3.2 -1.8 -1.4 -1.4 1.8 2.0 16.2 13.9

Korea, Republic of 1.2 3.1 1.8 -0.3 2.2 3.9 2.0 0.8 -14.8 -15.4

Singapore -6.6 -4.1 2.6 3.4 -0.8 3.1 0.5 7.5 14.6 6.5

Taiwan -0.5 -1.1 -0.6 0.8 -1.4 0.7 1.3 1.7 6.0 4.2

Belgium 0.5 -0.5 -1.0 -0.3 -0.7 1.9 3.0 2.4 10.0 7.4

Denmark -4.5 -1.8 2.7 1.7 1.1 6.3 3.4 8.3 15.8 6.9

France -0.8 -2.4 -1.5 -1.5 0.0 1.4 3.0 3.8 11.5 7.4

Germany -0.1 0.6 0.7 1.6 -0.9 3.3 2.5 2.7 10.3 7.4

Italy -3.4 -4.5 -1.2 -1.2 0.0 1.4 2.6 6.2 14.1 7.4

Netherlands -1.4 -0.6 0.8 0.5 0.3 4.0 3.3 4.7 12.4 7.4

Norway 0.7 3.0 2.3 2.5 -0.2 8.0 5.6 4.9 9.0 3.9

Spain -0.9 -2.1 -1.2 -0.5 -0.7 3.6 4.8 5.8 13.6 7.4

Sweden -3.7 -3.5 0.2 -0.5 0.7 3.2 3.0 6.9 9.7 2.6

United Kingdom 0.3 -2.8 -3.1 -2.9 -0.2 -0.7 2.5 2.2 -5.3 -7.4

_________________________________________________________________________________________________________________________

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

Manufacturing productivity, output, and labor input

In 2008 manufacturing productivity decreased in almost all of the 17 economies 

compared, in contrast to past years and periods, when most economies registered 

productivity increases. Singapore (-6.6 percent) and Denmark (-4.5 percent) experienced 

the largest productivity declines in 2008. The Republic of Korea and the United States 

led productivity growth in 2008 with slight increases of 1.2 percent each, but below the 

average annual increases for both countries for all the periods shown in the 

accompanying tables. (See tables A and B.)

Manufacturing output decreased in 13 of the 17 economies in 2008. The declines ranged 

between -0.5 percent in Belgium to -5.7 percent in Canada. The U.S. output decline of 

2.7 percent was in the middle of this range. Among the four countries with output growth 

in 2008, the Korean increase of 3.1 percent was the largest; however, this was less than 

the average annual increases in Korean manufacturing output for all previous periods 

shown in the accompanying tables. (See tables A and B.) 

For most economies, declines in 2008 manufacturing output were accompanied by 

declines in employment, as well as by declines in average hours worked. 

In 2008 manufacturing employment decreased in 10 of the 17 economies. The United 

States had the largest decline in employment (-3.4 percent), while Singapore had the 

largest increase in employment (+3.4 percent). Over the 2000-2008 period, the United 

Kingdom and the United States experienced the steepest average annual declines in 

manufacturing employment (-3.9 and -3.0 percent respectively).

In 2008 average hours worked in manufacturing declined in 10 of the 17 economies and 

increased in 5, while France and Italy showed no change in average hours worked. 

Average hours worked fell 0.5 percent in U.S. manufacturing. 

In 2008 total manufacturing hours worked fell in 9, and increased in 8 of the 17 

economies compared. The greatest decline in total hours worked, -3.9 percent, occurred 

in U.S. manufacturing, and the largest increase, +2.7 percent, was in Denmark. This 

contrasts with the average annual changes over the 2000-2008 period, when total hours 

worked in manufacturing declined in most of the 17 economies. Singapore (+3.6 percent) 

and Norway (+0.2 percent) were the only two countries that experienced growth in total 

manufacturing hours worked over the 2000–2008 period. 
- 5 -

Manufacturing hourly compensation and unit labor costs

Total labor compensation in manufacturing increased in 13 of the 17 economies in 2008. 

The largest increases were in Norway (+8.0 percent) and Denmark (+6.3 percent). U. S. 

compensation dropped by 1.0 percent. Total labor compensation in manufacturing also 

declined in Japan, Canada, and the United Kingdom. (See tables A and B.) 

Hourly compensation in manufacturing increased in 2008 in all 17 economies. The 

largest increase was in Norway (+5.6 percent), followed by Spain (+4.8 percent). The 

U.S. increase of 3.0 percent in hourly compensation was below its average annual 

increase since 1979. The 2008 increases in hourly compensation were smaller than the 

average annual increases for all economies during the 1979–2008 period, for which 

comparable data are available. (See tables A and B.) 

Expressed in national currencies, unit labor costs also increased in all 17 economies in 

2008. The largest increase occurred in Denmark (+8.3 percent). U.S. and Taiwanese 

manufacturing had the second smallest increase (+1.7 percent each) among the 

economies compared. However, for the United States this increase was larger than the 

average annual increases in unit labor costs between1979 and 2008. For most economies, 

the 2008 increases in unit labor costs were also larger than their average annual increases 

during the 1979–2008 period. 

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

comparative unit labor costs and international competitiveness. In 2008, the U.S. dollar 

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

currencies of Korea and the United Kingdom, which depreciated against the dollar. This 

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

2001. 

As a result of these changes in exchange rates, manufacturing unit labor costs expressed 

in U.S. dollars increased even more in 14 of the economies, while declining in 2 in 2008. 

The unit labor costs of two countries, Korea and the United Kingdom, went from 

increases to decreases when computed on a U.S. dollar basis. Thus, the manufacturing 

sector in the United States improved its unit labor cost competitiveness in 2008 against 

all economies compared except Korea and the United Kingdom. 
- 6 -

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

 Manufacturing, 17 countries or areas, 1979-2008

 

 Average annual rates of change(1)

_________________________________________________________________________________________________________________________

Country or area 1979-2008 1979-1990 1990-1995 1995-2000 2000-2008 2006-2007 2007-2008

_________________________________________________________________________________________________________________________

 Output per hour

United States 3.9 2.8 3.7 5.6 4.6 4.7 1.2

Canada 2.3 2.1 3.4 3.8 0.8 2.7 -2.6

Australia 2.1 2.3 1.3 3.4 1.6 1.9 -0.9

Japan 3.5 3.8 3.3 3.4 3.2 3.5 -0.2

Korea, Republic of NA NA 9.4 10.8 7.4 7.6 1.2

Singapore NA NA 6.9 6.5 0.7 -3.8 -6.6

Taiwan 5.6 6.2 4.7 5.5 5.2 8.9 -0.5

Belgium 3.3 4.2 3.1 2.4 2.8 4.4 0.5

Denmark 2.1 2.2 2.7 1.8 1.8 0.4 -4.5

France 3.5 3.8 3.4 4.6 2.6 1.2 -0.8

Germany(2) 3.0 2.1 2.9 3.7 3.7 5.0 -0.1

Italy 2.1 3.4 3.8 1.4 -0.2 0.5 -3.4

Netherlands 3.2 3.3 3.7 3.3 2.7 2.7 -1.4

Norway 1.7 1.9 0.1 1.4 2.7 -0.2 0.7

Spain 2.4 3.3 3.1 0.8 1.5 2.4 -0.9

Sweden 4.2 2.1 5.5 6.8 4.8 0.6 -3.7

United Kingdom 3.4 4.1 2.4 2.7 3.6 3.3 0.3

 Output

United States 2.7 2.2 3.6 5.4 1.2 2.9 -2.7

Canada 1.9 1.9 2.2 6.2 -0.9 -0.9 -5.7

Australia 1.5 1.6 0.8 2.6 1.1 3.3 1.6

Japan 2.5 4.7 0.6 1.1 1.5 3.6 -3.4

Korea, Republic of 8.6 10.7 8.2 7.9 6.3 7.2 3.1

Singapore NA NA 8.0 6.7 4.3 5.9 -4.1

Taiwan 5.9 7.4 4.4 5.8 4.8 10.4 -1.1

Belgium 1.7 2.6 0.6 2.3 0.8 2.6 -0.5

Denmark 1.2 1.3 2.1 1.7 0.3 3.6 -1.8

France 1.4 1.5 0.6 3.4 0.5 0.8 -2.4

Germany(2) 1.4 1.2 -1.0 2.2 2.6 6.1 0.6

Italy 1.4 2.6 1.6 1.2 -0.4 2.0 -4.5

Netherlands 2.2 2.4 2.0 3.3 1.3 3.2 -0.6

Norway 1.0 -0.5 0.7 1.4 2.9 5.3 3.0

Spain 2.0 2.1 0.6 5.0 0.8 0.9 -2.1

Sweden 3.5 1.7 3.8 7.4 3.6 2.3 -3.5

United Kingdom 0.6 0.9 0.4 1.3 -0.3 0.6 -2.8

Continued on next page
- 7 -

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

 Manufacturing, 17 countries or areas, 1979-2008

 

 Average annual rates of change(1)

_________________________________________________________________________________________________________________________

Country or area 1979-2008 1979-1990 1990-1995 1995-2000 2000-2008 2006-2007 2007-2008

_________________________________________________________________________________________________________________________

 Total hours

United States -1.2 -0.6 -0.1 -0.1 -3.2 -1.8 -3.9

Canada -0.4 -0.2 -1.1 2.3 -1.7 -3.5 -3.2

Australia -0.6 -0.7 -0.5 -0.9 -0.4 1.3 2.6

Japan -1.0 0.9 -2.7 -2.2 -1.6 0.2 -3.2

Korea, Republic of NA NA -1.1 -2.6 -0.9 -0.4 1.8

Singapore NA NA 1.0 0.2 3.6 10.2 2.6

Taiwan 0.3 1.2 -0.3 0.2 -0.4 1.3 -0.6

Belgium -1.6 -1.6 -2.4 -0.1 -2.0 -1.7 -1.0

Denmark -0.9 -1.0 -0.7 -0.1 -1.5 3.3 2.7

France -2.1 -2.2 -2.8 -1.1 -2.0 -0.5 -1.5

Germany(2) -1.5 -0.9 -3.8 -1.4 -1.1 1.0 0.7

Italy -0.8 -0.8 -2.1 -0.2 -0.2 1.5 -1.2

Netherlands -1.0 -0.9 -1.7 0.0 -1.4 0.5 0.8

Norway -0.7 -2.3 0.6 0.0 0.2 5.5 2.3

Spain -0.4 -1.2 -2.4 4.1 -0.7 -1.4 -1.2

Sweden -0.7 -0.4 -1.7 0.5 -1.1 1.8 0.2

United Kingdom -2.8 -3.1 -1.9 -1.3 -3.8 -2.7 -3.1

 Employment

United States -1.3 -0.8 -0.5 0.0 -3.0 -1.7 -3.4

Canada -0.4 -0.3 -1.5 2.2 -1.6 -3.4 -2.6

Australia -1.2 -1.3 -2.3 -1.1 -0.4 1.8 1.5

Japan -0.7 1.0 -1.4 -2.1 -1.6 0.5 -1.8

Korea, Republic of NA NA -0.8 -2.5 0.4 0.0 -0.3

Singapore NA NA 0.7 -0.1 3.5 9.9 3.4

Taiwan 0.9 2.0 -0.3 0.5 0.5 1.4 0.8

Belgium -1.5 -1.6 -2.2 -0.6 -1.4 -0.9 -0.3

Denmark -0.9 -0.4 -1.2 -1.2 -1.3 1.8 1.7

France -1.6 -1.8 -2.5 -0.3 -1.8 -1.4 -1.5

Germany(2) -1.1 -0.1 -4.2 -0.8 -0.7 1.2 1.6

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

Netherlands -0.9 -0.6 -1.6 0.1 -1.4 0.4 0.5

Norway -0.8 -2.2 0.4 0.2 0.0 5.0 2.5

Spain 0.1 -0.7 -2.0 3.3 0.4 -0.6 -0.5

Sweden -1.3 -1.0 -3.5 0.2 -1.3 0.6 -0.5

United Kingdom -2.8 -2.9 -2.7 -1.2 -3.9 -3.2 -2.9

Continued on next page
- 8 -

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

 Manufacturing, 17 countries or areas, 1979-2008

 

 Average annual rates of change(1)

_________________________________________________________________________________________________________________________

Country or area 1979-2008 1979-1990 1990-1995 1995-2000 2000-2008 2006-2007 2007-2008

_________________________________________________________________________________________________________________________

 Average hours

United States 0.1 0.2 0.4 -0.1 -0.1 -0.1 -0.5

Canada 0.1 0.1 0.3 0.1 -0.2 -0.1 -0.6

Australia 0.6 0.6 1.9 0.3 0.0 -0.5 1.1

Japan -0.3 -0.1 -1.3 -0.1 0.0 -0.4 -1.4

Korea, Republic of NA NA -0.2 -0.1 -1.3 -0.4 2.2

Singapore NA NA 0.3 0.3 0.1 0.2 -0.8

Taiwan -0.6 -0.8 0.0 -0.3 -0.9 0.0 -1.4

Belgium -0.1 0.0 -0.2 0.5 -0.6 -0.8 -0.7

Denmark 0.0 -0.5 0.6 1.1 -0.1 1.4 1.1

France -0.4 -0.5 -0.3 -0.8 -0.3 1.0 0.0

Germany(2) -0.5 -0.9 0.4 -0.6 -0.4 -0.2 -0.9

Italy -0.1 0.1 -0.2 0.0 -0.2 0.8 0.0

Netherlands -0.1 -0.2 0.0 -0.1 0.0 0.1 0.3

Norway 0.0 -0.1 0.2 -0.2 0.2 0.5 -0.2

Spain -0.4 -0.5 -0.4 0.8 -1.1 -0.8 -0.7

Sweden 0.7 0.7 1.9 0.3 0.2 1.2 0.7

United Kingdom 0.1 -0.2 0.8 -0.1 0.1 0.5 -0.2

 Total labor compensation(3): National currency basis

United States 3.3 4.9 3.3 4.3 0.5 2.5 -1.0

Canada 4.2 6.5 2.4 5.2 1.6 -0.1 -1.1

Australia NA NA 3.2 3.1 4.7 6.6 5.3

Japan 1.6 5.5 0.8 -1.1 -1.4 -0.1 -1.4

Korea, Republic of 13.4 19.6 17.6 5.8 7.8 6.0 3.9

Singapore NA NA 8.7 2.4 4.2 9.3 3.1

Taiwan 7.2 13.5 6.8 3.6 1.6 4.6 0.7

Belgium 2.7 4.4 1.3 1.9 1.6 3.5 1.9

Denmark 4.4 7.0 2.3 2.8 3.0 5.9 6.3

France 3.4 6.7 1.6 1.7 1.3 2.3 1.4

Germany(2) 2.7 4.6 2.4 1.6 1.2 2.8 3.3

Italy 6.2 11.6 3.9 2.4 2.7 3.7 1.4

Netherlands 2.8 3.2 2.7 3.4 2.1 3.7 4.0

Norway 5.5 6.4 4.1 5.1 5.3 10.5 8.0

Spain 6.7 10.1 5.5 5.6 3.6 3.5 3.6

Sweden 5.3 8.8 1.9 5.3 2.8 6.7 3.2

United Kingdom 3.6 7.1 1.5 3.3 0.6 0.5 -0.7

Continued on next page
- 9 -

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

 Manufacturing, 17 countries or areas, 1979-2008

 

 Average annual rates of change(1)

_________________________________________________________________________________________________________________________

Country or area 1979-2008 1979-1990 1990-1995 1995-2000 2000-2008 2006-2007 2007-2008

_________________________________________________________________________________________________________________________

 Hourly compensation(3): National currency basis

United States 4.5 5.6 3.4 4.5 3.8 4.3 3.0

Canada 4.6 6.8 3.6 2.9 3.3 3.5 2.1

Australia NA NA 3.7 4.0 5.1 5.3 2.7

Japan 2.6 4.6 3.6 1.2 0.3 -0.2 1.8

Korea, Republic of NA NA 18.9 8.6 8.8 6.4 2.0

Singapore NA NA 7.6 2.2 0.6 -0.7 0.5

Taiwan 6.9 12.1 7.2 3.4 1.9 3.2 1.3

Belgium 4.3 6.1 3.8 2.0 3.7 5.3 3.0

Denmark 5.3 8.1 2.9 2.9 4.5 2.6 3.4

France 5.6 9.1 4.5 2.8 3.4 2.7 3.0

Germany(2) 4.3 5.6 6.4 3.1 2.2 1.7 2.5

Italy 7.0 12.5 6.1 2.7 2.9 2.2 2.6

Netherlands 3.9 4.1 4.5 3.4 3.6 3.2 3.3

Norway 6.3 9.0 3.4 5.2 5.1 4.8 5.6

Spain 7.1 11.4 8.2 1.4 4.3 4.9 4.8

Sweden 6.0 9.1 3.7 4.8 3.9 4.8 3.0

United Kingdom 6.6 10.5 3.5 4.7 4.5 3.3 2.5

 Unit labor costs(3): National currency basis

United States 0.6 2.7 -0.3 -1.0 -0.7 -0.4 1.7

Canada 2.3 4.6 0.3 -0.9 2.5 0.8 4.8

Australia NA NA 2.4 0.5 3.5 3.2 3.6

Japan -0.8 0.7 0.3 -2.1 -2.9 -3.6 2.0

Korea, Republic of 4.5 8.1 8.7 -2.0 1.3 -1.1 0.8

Singapore NA NA 0.6 -4.1 -0.1 3.2 7.5

Taiwan 1.2 5.6 2.3 -2.1 -3.1 -5.2 1.7

Belgium 1.0 1.8 0.7 -0.4 0.8 0.8 2.4

Denmark 3.1 5.7 0.2 1.1 2.7 2.2 8.3

France 2.0 5.1 1.0 -1.7 0.8 1.5 3.8

Germany(2) 1.3 3.3 3.4 -0.5 -1.4 -3.2 2.7

Italy 4.7 8.8 2.2 1.2 3.1 1.7 6.2

Netherlands 0.7 0.8 0.7 0.1 0.9 0.5 4.7

Norway 4.5 6.9 3.3 3.7 2.3 5.0 4.9

Spain 4.6 7.8 4.9 0.5 2.7 2.5 5.8

Sweden 1.7 6.9 -1.8 -1.9 -0.8 4.2 6.9

United Kingdom 3.1 6.1 1.1 1.9 0.9 -0.1 2.2

Continued on next page
- 10 -

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

 Manufacturing, 17 countries or areas, 1979-2008

 

 Average annual rates of change(1)

_________________________________________________________________________________________________________________________

Country or area 1979-2008 1979-1990 1990-1995 1995-2000 2000-2008 2006-2007 2007-2008

_________________________________________________________________________________________________________________________

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

United States 0.6 2.7 -0.3 -1.0 -0.7 -0.4 1.7

Canada 2.6 4.6 -2.9 -2.4 6.8 6.5 5.6

Australia NA NA 1.3 -4.2 8.6 15.0 5.4

Japan 1.7 4.6 9.4 -4.8 -2.4 -4.8 16.2

Korea, Republic of 1.6 4.4 6.9 -9.2 1.7 1.6 -14.8

Singapore NA NA 5.7 -7.8 2.5 8.8 14.6

Taiwan 1.7 8.5 2.7 -5.3 -3.2 -6.2 6.0

Belgium 1.2 0.6 3.3 -7.9 6.9 10.1 10.0

Denmark 3.2 4.1 2.2 -6.1 8.9 11.7 15.8

France 1.8 2.7 2.8 -8.4 6.9 10.8 11.5

Germany(2) 2.5 4.5 5.9 -8.0 4.5 5.7 10.3

Italy 3.1 5.2 -3.9 -3.7 9.3 11.0 14.1

Netherlands 1.7 1.7 3.3 -7.6 6.9 9.7 12.4

Norway 4.1 4.9 3.1 -2.9 8.2 15.0 9.0

Spain 2.8 3.8 0.8 -6.6 8.9 11.9 13.6

Sweden 0.2 3.8 -5.4 -6.7 3.4 13.8 9.7

United Kingdom 2.6 4.5 -1.4 1.1 3.5 8.5 -5.3

 Exchange rates(4)

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

Canada 0.3 0.0 -3.2 -1.6 4.2 5.6 0.7

Australia -0.9 -3.2 -1.1 -4.7 4.9 11.4 1.7

Japan 2.6 3.8 9.1 -2.7 0.5 -1.2 13.9

Korea, Republic of -2.8 -3.4 -1.7 -7.3 0.4 2.7 -15.4

Singapore NA NA 5.0 -3.9 2.5 5.4 6.5

Taiwan 0.5 2.7 0.3 -3.3 -0.1 -1.1 4.2

Belgium 0.2 -1.2 2.6 -7.6 6.0 9.1 7.4

Denmark 0.1 -1.5 2.0 -7.1 6.0 9.2 6.9

France -0.2 -2.2 1.8 -6.8 6.0 9.1 7.4

Germany(2) 1.1 1.1 2.5 -7.5 6.0 9.1 7.4

Italy -1.6 -3.3 -6.0 -4.9 6.0 9.1 7.4

Netherlands 1.0 0.9 2.6 -7.6 6.0 9.1 7.4

Norway -0.4 -1.9 -0.3 -6.4 5.7 9.5 3.9

Spain -1.8 -3.7 -3.9 -7.1 6.0 9.1 7.4

Sweden -1.5 -2.9 -3.7 -4.9 4.2 9.1 2.6

United Kingdom -0.5 -1.6 -2.4 -0.8 2.6 8.6 -7.4

_________________________________________________________________________________________________________________________

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 and Singapore have 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.

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 2008. 

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. 

60

70

80

90

100

110

120

130

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

Chart 3. U.S. manufacturing unit labor 

costs relative to 14(1) other economies, 1979-2008

(1979 = 100)

U.S. dollar 

National 

currency 

(1) Australia and Singapore have been omitted from this chart because data are not available before 1990.
- 12 -

Table C. U.S. manufacturing unit labor 

costs relative to 14(1) competitors, 1979-2008

Unit Labor Costs Unit Labor Costs

National Currency Basis U.S. Dollar Basis

Year Own Competitors' Own Competitors'

Index Index Ratio Index Index Ratio

1979 100.0 100.0 100.0 100.0 100.0 100.0

1980 112.7 111.4 101.2 112.7 110.0 102.5

1981 117.6 120.9 97.3 117.6 108.1 108.8

1982 127.3 131.2 97.0 127.3 107.4 118.5

1983 122.7 133.6 91.8 122.7 105.1 116.7

1984 123.8 133.7 92.6 123.8 98.3 125.9

1985 126.1 136.2 92.6 126.1 96.5 130.7

1986 130.0 141.6 91.8 130.0 115.8 112.3

1987 125.4 145.1 86.4 125.4 132.8 94.4

1988 126.5 147.8 85.5 126.5 144.9 87.3

1989 129.5 151.8 85.4 129.5 146.3 88.5

1990 133.9 158.2 84.7 133.9 160.1 83.7

1991 137.7 166.4 82.8 137.7 169.3 81.4

1992 139.0 169.9 81.8 139.0 174.0 79.9

1993 138.2 170.8 80.9 138.2 166.0 83.3

1994 134.6 168.1 80.1 134.6 163.0 82.5

1995 131.7 170.1 77.4 131.7 173.1 76.1

1996 128.9 172.1 74.9 128.9 169.4 76.1

1997 126.7 169.8 74.6 126.7 155.5 81.5

1998 125.7 170.9 73.6 125.7 145.8 86.2

1999 125.0 167.6 74.6 125.0 145.4 86.0

2000 125.1 163.5 76.5 125.1 136.6 91.6

2001 128.4 169.0 76.0 128.4 133.1 96.5

2002 122.5 169.7 72.2 122.5 135.4 90.5

2003 124.4 169.5 73.4 124.4 152.3 81.7

2004 118.1 168.4 70.1 118.1 163.7 72.2

2005 119.7 167.0 71.7 119.7 167.3 71.6

2006 116.5 166.1 70.2 116.5 170.2 68.5

2007 116.2 165.1 70.4 116.2 178.4 65.1

2008 118.1 170.9 69.1 118.1 190.3 62.1

(1) Australia and Singapore have 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 beginning of September 2009 from the national statistical offices of 

the 17 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 still uses 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, Singapore, 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 2008. 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 34.89 Germany 11.32

 Japan 14.92 Italy 3.86

 Korea 5.95 Netherlands 4.19

 Taiwan 4.40 Norway 0.66

 Belgium 3.39 Spain 1.61

 Denmark 0.69 Sweden 1.32

 France 5.21 United Kingdom 7.60

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 several other European countries became 

EMU members. 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.