For release 10:00 a.m. (EDT) Wednesday, March 21, 2012 USDL 12-0494

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

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

 MULTIFACTOR PRODUCTIVITY TRENDS - 2010

Private nonfarm business sector multifactor productivity increased at a 3.5 percent annual rate in 2010, the 

U.S. Bureau of Labor Statistics reported today. This was the largest increase recorded in the series, which began 

in 1987. (See chart 1, table A.) The multifactor productivity gain in 2010 reflected a 4.0 percent increase in output 

and 0.5 percent increase in the combined inputs of capital and labor. Capital services grew by 0.4 percent, and 

labor input – which is the combined effect of hours worked and labor composition – grew 0.5 percent. (See table 

A, table 1.) The combination of fast-rising output and a modest increase in capital services caused output per unit 

of capital services to rise 3.6 percent, the largest gain since the series began in 1987. 

Multifactor productivity measures the change in output per unit of combined capital and labor input. It 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. Multifactor 

productivity, therefore, differs from labor productivity (output per hour worked) measures that are published 

quarterly by BLS. Multifactor productivity includes information on capital services, hours worked, and shifts in 

the composition of labor. Estimates of capital services and labor composition are not included in the quarterly 

labor productivity measures. Additionally, much of the source data needed to construct multifactor productivity 

measures are not available quarterly. 

Private business sector multifactor productivity increased at a 3.4 percent annual rate in 2010, reversing a 

decline of 0.8 percent in 2009. The multifactor productivity gain in 2010 reflected a 4.0 percent increase in output 

and 0.5 percent increase in the combined inputs of capital and labor. Capital services grew by 0.5 percent, and 

labor input grew by 0.6 percent. (See table A, table 2.) 

Chart 1. Output per hour of all persons, multifactor productivity, and output per unit of capital services in 

the private nonfarm business sector, 2000-2010 

 Annual percent change 

-8.0

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Output per hour of all persons Multifactor productivity Output per unit of capital services
- 2 - 

Historical trends in private nonfarm business 

Multifactor productivity in private nonfarm business grew 0.9 percent annually from 1987 to 2010. (See table A.) 

For the 2007-2010 period, multifactor productivity grew 0.3 percent, due to a 0.9 percent decline in output 

coupled with a 1.2 percent decline in combined inputs. In contrast, the 3.5 percent increase in multifactor 

productivity in 2010 was a result of an increase in output much larger than the increase in combined inputs. The 

4.0 percent rise in output over the year represents the largest increase since 2004. (See table 1.) 

Annual 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. Output per hour shifted 

sharply upwards after the 1990-1995 period. In particular, the contribution of capital intensity to labor 

productivity growth became more pronounced after 1995. (See chart 2, table B.) 

For the 2007-2010 period, the contribution of capital intensity increased at a 1.6 percent annual rate and the 

contribution of labor composition increased at a 0.5 percent annual rate, faster than the gains seen in the 

1995-2000 and 2000-2007 periods. Gains made in private nonfarm business output per hour due to the rising 

contributions of capital intensity and of labor composition were tempered by slower multifactor productivity 

growth. (See chart 2, table B.) 

For the 2000-2007 period, information processing equipment and software (IPES) grew 8.1 percent annually in 

the private nonfarm business sector. (See table 5.) For the 2007-2010 period, IPES slowed to 4.4 percent annually. 

For both periods, the rate of increase in information processing equipment and software was markedly lower than 

the double-digit increase observed in the 1995-2000 period. 

The revised multifactor productivity measure for the most recent year reflects the use of a more rigorous 

methodology than that used in the preliminary multifactor productivity release published on May 19, 2011 

http://www.bls.gov/news.release/archives/prod3_05192011.pdf. Revisions to underlying data affect multifactor 

productivity growth rates for the 2007-2010 period. (See table C.) In 2010, multifactor productivity growth in the 

private nonfarm business sector was 3.5 percent, larger than the 3.2 percent increase reported May 19, 2011, 

mainly due to a 0.3 percent upward revision to output. For 2009, multifactor productivity growth in the private 

nonfarm business sector was revised downward to a 1.0 percent decline, a 1.1 percent downward revision. This 

was largely due to a revision to output from a 3.7 percent decline to a fall of 5.0 percent. 

Chart 2. Percentage point contributions to growth in output per hour in the private nonfarm business 

sector, 1987-2010 

In percent

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

sum to output per hour due to independent rounding. 

1.0

0.6 0.6

1.2 1.0

1.6

0.3

0.4 0.5

0.2

0.2

0.5 0.9

0.5 0.5

1.3

1.4

0.3

0.0

0.5

1.0

1.5

2.0

2.5

3.0

1987-2010 1987-1990 1990-1995 1995-2000 2000-2007 2007-2010

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

Table A. Compound annual growth rates for productivity, output, and inputs in the private nonfarm 

business and private business sectors for selected periods, 1987-2010 

In percent 

1987-

2010

1987-

1990

1990-

1995

1995-

2000

2000-

2007

2007-

2010

2009-

2010

Private nonfarm business1

Productivity

 Multifactor Productivity20.9 0.5 0.5 1.3 1.4 0.3 3.5

 Output per hour of all persons 2.2 1.4 1.6 2.7 2.6 2.4 4.1

 Output per unit of capital services -0.8 -0.4 -0.4 -1.0 -0.5 -2.2 3.6

Output 2.8 3.2 2.9 5.0 2.7 -0.9 4.0

Inputs

 Combined inputs31.9 2.7 2.4 3.6 1.3 -1.2 0.5

 Labor Input41.1 2.3 2.0 2.5 0.4 -2.5 0.5

 Hours 0.6 1.7 1.3 2.2 0.1 -3.2 -0.1

 Labor composition50.5 0.6 0.7 0.3 0.3 0.7 0.7

 Capital services 3.6 3.6 3.3 6.0 3.2 1.3 0.4

Analytic ratio

 Capital services per hour of all persons 3.1 1.9 1.9 3.8 3.1 4.7 0.6

Private business1

Productivity

 Multifactor Productivity21.0 0.6 0.4 1.5 1.4 0.5 3.4

 Output per hour of all persons 2.3 1.6 1.5 2.9 2.7 2.5 4.1

 Output per unit of capital services -0.7 -0.4 -0.3 -0.8 -0.5 -1.9 3.5

Output 2.8 3.2 2.8 5.0 2.7 -0.8 4.0

Inputs

 Combined inputs31.8 2.6 2.4 3.4 1.2 -1.2 0.5

 Labor Input41.0 2.1 2.0 2.4 0.3 -2.5 0.6

 Hours 0.5 1.6 1.3 2.0 0.0 -3.2 -0.1

 Labor composition50.5 0.6 0.7 0.3 0.3 0.7 0.7

 Capital services 3.5 3.6 3.1 5.8 3.2 1.2 0.5

Analytic ratio

 Capital services per hour of all persons 3.0 2.0 1.8 3.7 3.1 4.5 0.6

1 Excludes government enterprises. 

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

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

4 Hours at work by age, education, and gender group are weighted by each group’s share of the total wage bill. 

5 Ratio of labor input to hours. 
- 4 - 

Table B. Compound annual growth rates in output per hour of all persons and the contributions of 

capital intensity, labor composition, and multifactor productivity in the private nonfarm business and 

private business sectors for selected periods, 1987-2010 

In percent 

1987-

2010

1987-

1990

1990-

1995

1995-

2000

2000-

2007

2007-

2010

2009-

2010

Private nonfarm business1

Output per hour of all persons 2.2 1.4 1.6 2.7 2.6 2.4 4.1

Contribution of capital intensity21.0 0.6 0.6 1.2 1.0 1.6 0.2

 Contribution of information 

 processing equipment and 

 software30.6 0.5 0.5 0.9 0.5 0.6 0.3

 Contribution of all

 other capital services 0.4 0.1 0.2 0.2 0.4 1.0 -0.1

Contribution of labor composition40.3 0.4 0.5 0.2 0.2 0.5 0.4

Multifactor productivity5 0.9 0.5 0.5 1.3 1.4 0.3 3.5

 Contribution of R&D to 

 multifactor productivity 0.2 0.2 0.2 0.2 0.2 0.2 0.2

Private business1

Output per hour of all persons 2.3 1.6 1.5 2.9 2.7 2.5 4.1

Contribution of capital intensity21.0 0.6 0.6 1.2 1.0 1.5 0.2

 Contribution of information 

 processing equipment and 

 software30.6 0.5 0.4 0.9 0.5 0.6 0.3

 Contribution of all

 other capital services 0.4 0.2 0.1 0.3 0.4 1.0 0.0

Contribution of labor composition40.3 0.4 0.5 0.2 0.2 0.5 0.4

Multifactor productivity51.0 0.6 0.4 1.5 1.4 0.5 3.4

1 Excludes government enterprises. 

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

3 Information processing equipment and software per hour multiplied by its share of current dollar costs. 

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

5 Output per unit of combined labor input and capital services. 

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

per hour due to independent rounding. Contributions of information processing equipment and all other capital 

services may not sum to the contribution of capital intensity due to independent rounding. 
- 5 - 

Table C. Annual growth rates of the previous and revised multifactor productivity measures in the private 

nonfarm business and private business sectors for the 1987-2010 period 

 

Annual percent change from previous year

Private Nonfarm Business Private Business

Year Previous Revised Previous Revised

1988 1.0 1.0 0.8 0.8

1989 0.0 0.0 0.3 0.3

1990 0.4 0.4 0.6 0.6

1991 -1.0 -1.0 -1.0 -1.0

1992 2.3 2.3 2.6 2.6

1993 0.3 0.3 0.2 0.2

1994 0.7 0.7 0.7 0.7

1995 0.0 0.0 -0.3 -0.3

1996 1.4 1.4 1.7 1.7

1997 0.6 0.6 0.8 0.8

1998 1.5 1.5 1.5 1.5

1999 1.7 1.6 1.9 1.8

2000 1.6 1.6 1.7 1.7

2001 0.7 0.7 0.8 0.8

2002 2.4 2.4 2.3 2.4

2003 2.4 2.5 2.6 2.7

2004 2.5 2.4 2.6 2.4

2005 1.1 1.1 1.1 1.0

2006 0.4 0.4 0.5 0.5

2007 0.4 0.3 0.3 0.3

2008 -1.0 -1.4 -0.9 -1.2

2009 0.1 -1.0 0.2 -0.8

2010 3.2 3.5 3.2 3.4
- 6 - 

TECHNICAL NOTES 

Capital Services: Capital services are the services derived from the stock of physical assets and 

software. There are 86 asset types for fixed business equipment and software, structures, inventories, 

and land. Data on investments in physical assets are obtained from BEA. Data on inventories are 

estimated using BEA and additional information from IRS Corporation Income Returns. Data for land in 

the farm sector are obtained from 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. 

Among equipment, BLS provides additional detail in tables 5 and 6 on information processing 

equipment and software (IPES). IPES is composed of four broad classes of assets: computers and related 

equipment, software, communications equipment, and other IPES equipment. Computers and related 

equipment includes mainframe computers, personal computers, printers, terminals, tape drives, storage 

devices, and integrated systems. Software is comprised of pre-packaged, custom, and own-account 

software. Communications equipment is not further differentiated. Other IPES includes medical 

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

and related equipment, and office and accounting machinery. 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. 

Labor Input: Labor input in private business and private nonfarm business is obtained by chained 

superlative (Tornqvist) aggregation of the hours at work by all persons, 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 program (CES). These hours paid are then 

converted to an at-work basis by using information from the Employment Cost Index (ECI) of the 

National Compensation Survey (NCS) benchmarked to the Hours at Work Survey. Hours at work for 

nonproduction and supervisory workers are derived using data from the Current Population Survey 

(CPS), the CES, and the NCS. The hours at work of proprietors, unpaid family workers, and farm 

employees are derived from the Current Population Survey. Hours at work data reflect Productivity and 

Costs data as of the February 2, 2012 “Productivity and Costs” news release (USDL-12-0162). 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. Additional information concerning data sources 

and methods of measuring labor composition can be found in Cindy Zoghi, 2007, “Measuring Labor 

Composition: A Comparison of Alternate Methodologies” http://www.bls.gov/bls/fesacp1121407.pdf.

Combined Inputs: Labor input and capital services are combined using chained superlative Tornqvist 

aggregation, applying weights that represent each component's 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 of the taxes on production and imports, such as excise taxes, are excluded from costs; 

however, property and motor vehicle taxes remain in total costs.
- 7 - 

Capital Intensity: Capital intensity is the ratio of capital to hours worked in the production process. 

The higher the capital to hours ratio, the more capital intensive the production process is. 

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

capital and labor if the price of one factor is less than the other factor; there would be 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 http://www.bls.gov/mfp/mprdload.htm.

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, which accounted for approximately 76 percent of gross domestic product in 2005, includes all of 

gross domestic product except 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 excludes farms but includes agricultural services. All 

multifactor productivity measures exclude government enterprises, however government enterprises are 

included in the business and nonfarm business sectors covered by the BLS quarterly productivity 

measures. The output measures are based on the revised National Income and Product Accounts (NIPA) 

data released by BEA on January 27, 2012. 

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 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 cumulating 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. 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." 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 http://www.bls.gov/mfp/rdtable.pdf .
- 8 - 

Other information: Comprehensive tables containing additional data beyond the scope of this press 

release are available upon request at 202-691-5606 or at http://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” 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 at 

http://www.bls.gov/mfp/mprtech.pdf. General information is available on the BLS Multifactor 

Productivity website at http://www.bls.gov/mfp/mprover.htm. Additional data not contained in the 

release can be obtained in print or at http://www.bls.gov/mfp. A number of comprehensive tables set up 

as zip files can be obtained at http://www.bls.gov/mfp/mprdload.htm. Included in the additional data 

available in the home page is a zip file containing selected multifactor productivity 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 sectors. 
- 9 - 

Table 1. Private nonfarm business sector: productivity and related measures for the 1987-20101 period

Annual percent change from previous year 

Productivity Inputs

Year

Output 

per hour 

of all 

persons

Output 

per unit 

of 

capital

services

Multifactor 

Productivity2 Output3

Labor

Input4

Capital

Services5

Combined 

units of 

labor input 

and 

capital

services6

Capital

services

per hour 

of all 

persons

1988 1.7 0.9 1.0 4.6 3.5 3.6 3.5 0.7

1989 0.8 -0.4 0.0 3.5 3.3 4.0 3.5 1.2

1990 1.9 -1.7 0.4 1.4 0.1 3.2 1.1 3.7

1991 1.7 -3.6 -1.0 -0.9 -1.1 2.9 0.1 5.5

1992 4.0 1.5 2.3 3.8 1.0 2.3 1.4 2.5

1993 0.6 0.4 0.3 3.6 3.3 3.2 3.3 0.3

1994 1.1 1.1 0.7 4.7 4.1 3.6 3.9 0.0

1995 0.5 -1.1 0.0 3.3 2.7 4.4 3.2 1.6

1996 2.6 -0.3 1.4 4.4 2.2 4.8 3.0 2.9

1997 1.5 -0.4 0.6 5.1 4.0 5.5 4.5 1.9

1998 2.9 -1.2 1.5 5.2 2.4 6.4 3.6 4.2

1999 3.3 -1.2 1.6 5.6 2.6 6.9 3.9 4.5

2000 3.4 -2.0 1.6 4.5 1.2 6.5 2.8 5.5

2001 3.1 -3.6 0.7 1.0 -1.6 4.7 0.3 7.0

2002 4.7 -1.3 2.4 1.9 -2.0 3.3 -0.4 6.1

2003 3.8 0.5 2.5 3.1 -0.4 2.7 0.6 3.3

2004 2.6 1.5 2.4 4.0 1.2 2.5 1.6 1.1

2005 1.6 0.4 1.1 3.4 2.0 3.0 2.3 1.2

2006 0.9 -0.1 0.4 3.2 2.5 3.3 2.8 1.0

2007 1.6 -0.8 0.3 2.2 1.2 3.0 1.8 2.5

2008 0.7 -4.0 -1.4 -1.5 -1.5 2.7 -0.1 4.9

2009 2.5 -5.8 -1.0 -5.0 -6.5 0.8 -4.0 8.7

2010 4.1 3.6 3.5 4.0 0.5 0.4 0.5 0.6

See footnotes following table 4. Source: Bureau of Labor Statistics 
- 10 - 

Table 2. Private business sector: productivity and related measures for the 1987-20101 period

Annual percent change from previous year 

Productivity Inputs

Year

Output 

per hour 

of all 

persons

Output 

per unit 

of 

capital

services

Multifactor 

Productivity2 Output3

Labor

Input4

Capital

Services5

Combined 

units of 

labor input 

and 

capital

services6

Capital

services

per hour 

of all 

persons

1988 1.5 0.5 0.8 4.3 3.4 3.8 3.5 1.0

1989 1.0 -0.2 0.3 3.7 3.2 3.9 3.4 1.2

1990 2.2 -1.5 0.6 1.5 -0.1 3.0 0.9 3.7

1991 1.6 -3.4 -1.0 -0.8 -1.0 2.7 0.2 5.2

1992 4.2 1.8 2.6 4.0 1.0 2.1 1.4 2.3

1993 0.6 0.2 0.2 3.3 3.1 3.1 3.1 0.4

1994 0.9 1.4 0.7 5.0 4.5 3.5 4.2 -0.4

1995 0.1 -1.3 -0.3 2.9 2.7 4.3 3.2 1.5

1996 2.9 0.0 1.7 4.6 2.0 4.6 2.8 2.9

1997 1.8 -0.1 0.8 5.2 3.9 5.3 4.4 1.8

1998 3.0 -1.1 1.5 5.0 2.3 6.2 3.5 4.1

1999 3.5 -1.0 1.8 5.6 2.4 6.7 3.7 4.5

2000 3.5 -1.7 1.7 4.6 1.2 6.3 2.8 5.3

2001 3.2 -3.5 0.8 0.9 -1.8 4.6 0.1 7.0

2002 4.6 -1.2 2.4 2.0 -1.9 3.2 -0.4 5.9

2003 3.9 0.6 2.7 3.2 -0.4 2.6 0.5 3.3

2004 2.8 1.4 2.4 4.1 1.1 2.6 1.6 1.3

2005 1.7 0.2 1.0 3.5 2.0 3.2 2.4 1.5

2006 1.0 0.0 0.5 3.1 2.4 3.1 2.6 1.0

2007 1.6 -0.7 0.3 2.1 1.2 2.8 1.7 2.3

2008 0.7 -3.7 -1.2 -1.3 -1.4 2.4 -0.1 4.6

2009 2.6 -5.4 -0.8 -4.8 -6.5 0.6 -4.1 8.4

2010 4.1 3.5 3.4 4.0 0.6 0.5 0.5 0.6

See footnotes following table 4. Source: Bureau of Labor Statistics 
- 11 - 

Table 3. Private nonfarm business sector: indexes of productivity and related measures, 1987-20101

Indexes 2005=100 

Productivity Inputs

Year

Output 

per hour 

of all 

persons

Output 

per unit 

of 

capital

services

Multifactor 

Productivity2 Output3

Labor

Input4

Capital

Services5

Combined 

units of 

labor input 

and 

capital

services6

Capital 

services 

per hour 

of all 

persons

1987 66.3 111.4 82.3 54.2 75.5 48.7 65.9 59.5

1988 67.4 112.4 83.2 56.7 78.2 50.5 68.2 59.9

1989 67.9 112.0 83.2 58.7 80.8 52.5 70.6 60.6

1990 69.2 110.0 83.5 59.6 80.8 54.2 71.4 62.9

1991 70.3 106.0 82.7 59.1 79.9 55.7 71.4 66.3

1992 73.1 107.6 84.6 61.3 80.7 57.0 72.5 67.9

1993 73.6 108.0 84.9 63.5 83.4 58.8 74.9 68.1

1994 74.4 109.2 85.5 66.5 86.9 60.9 77.8 68.1

1995 74.7 107.9 85.5 68.7 89.2 63.6 80.3 69.2

1996 76.7 107.6 86.7 71.7 91.1 66.7 82.8 71.3

1997 77.8 107.2 87.2 75.4 94.8 70.4 86.5 72.6

1998 80.1 105.9 88.5 79.3 97.1 74.9 89.6 75.6

1999 82.7 104.7 89.9 83.8 99.6 80.0 93.1 79.0

2000 85.6 102.6 91.4 87.5 100.8 85.3 95.8 83.4

2001 88.3 99.0 92.1 88.4 99.2 89.3 96.0 89.2

2002 92.4 97.7 94.2 90.1 97.2 92.3 95.6 94.6

2003 95.8 98.1 96.6 92.9 96.9 94.7 96.2 97.7

2004 98.4 99.6 98.9 96.7 98.1 97.1 97.7 98.8

2005 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

2006 100.9 99.9 100.4 103.2 102.5 103.3 102.8 101.0

2007 102.6 99.1 100.7 105.4 103.8 106.4 104.7 103.6

2008 103.3 95.0 99.3 103.9 102.2 109.3 104.6 108.7

2009 105.8 89.6 98.3 98.7 95.6 110.1 100.4 118.1

2010 110.2 92.8 101.7 102.6 96.1 110.6 100.9 118.8

See footnotes following table 4. Source: Bureau of Labor Statistics 
- 12 - 

Table 4. Private business sector: indexes of productivity and related measures, 1987-20101

Indexes 2005=100 

Productivity Inputs

Year

Output 

per hour 

of all 

persons

Output 

per unit 

of 

capital

services

Multifactor 

Productivity2 Output3

Labor

Input4

Capital

Services5

Combined 

units of 

labor input

and 

capital

services6

Capital 

services 

per hour 

of all 

persons

1987 65.4 109.3 81.4 54.2 76.4 49.6 66.6 59.9

1988 66.4 109.9 82.1 56.5 78.9 51.4 68.9 60.5

1989 67.1 109.7 82.3 58.6 81.5 53.5 71.3 61.2

1990 68.6 108.1 82.8 59.5 81.4 55.1 71.9 63.5

1991 69.7 104.4 82.0 59.1 80.5 56.6 72.0 66.8

1992 72.6 106.3 84.1 61.4 81.4 57.8 73.0 68.3

1993 73.1 106.5 84.3 63.4 83.9 59.6 75.3 68.6

1994 73.8 108.0 84.9 66.6 87.7 61.7 78.4 68.3

1995 73.8 106.5 84.6 68.5 90.0 64.3 80.9 69.3

1996 76.0 106.6 86.1 71.7 91.8 67.2 83.2 71.3

1997 77.3 106.5 86.8 75.4 95.4 70.8 86.9 72.6

1998 79.6 105.3 88.0 79.2 97.6 75.2 89.9 75.6

1999 82.4 104.3 89.7 83.6 99.9 80.2 93.3 79.0

2000 85.3 102.6 91.2 87.4 101.1 85.3 95.9 83.2

2001 88.0 98.9 91.9 88.3 99.3 89.2 96.0 89.0

2002 92.1 97.8 94.1 90.0 97.4 92.1 95.6 94.2

2003 95.7 98.4 96.7 92.9 97.0 94.4 96.1 97.3

2004 98.4 99.8 99.0 96.7 98.1 96.9 97.7 98.6

2005 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

2006 101.0 100.0 100.5 103.1 102.4 103.1 102.6 101.0

2007 102.6 99.3 100.8 105.2 103.6 106.0 104.4 103.2

2008 103.3 95.7 99.6 103.8 102.1 108.5 104.3 108.0

2009 106.0 90.5 98.8 98.9 95.5 109.2 100.1 117.1

2010 110.3 93.7 102.2 102.8 96.0 109.7 100.6 117.8

See footnotes following table 4. Source: Bureau of Labor Statistics
- 13 - 

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 owneroccupied 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 unit of combined labor and capital services. 

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

(4) Index of hours at work 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 the total wage bill. 

(5) 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 software. The assets included are fixed business 

 equipment, structures, inventories, and land.

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

 shares of current dollar costs, and aggregating into a chained superlative index. 
- 14 - 

Table 5. Compound average annual growth rates in real capital services by asset type, private nonfarm 

business sector, 1987-2010

In percent 

1987-

2010

1987-

1990

1990-

1995

1995-

2000

2000-

2007

2007-

2010

2009-

2010

All Assets 3.6 3.6 3.3 6.0 3.2 1.3 0.4

Equipment 5.6 4.9 5.1 10.0 5.0 1.7 0.5

 All Information Processing 

Equipment & Software (IPES) 10.4 11.0 9.6 17.8 8.1 4.4 3.3

Computers & related 

equipment 20.0 19.2 16.1 40.7 13.8 10.5 9.6

Software 11.6 17.8 13.4 16.8 8.0 3.4 2.1

Communication equipment 7.0 6.0 5.3 10.7 7.1 4.4 3.6

Other IPES 3.2 2.8 4.0 3.5 3.0 2.0 1.3

All other equipment 2.0 2.2 1.9 3.2 1.9 0.5 -0.3

Structures 2.0 3.0 2.0 2.3 1.5 1.5 0.9

Residential rental capital 1.2 1.9 1.0 1.6 1.4 0.0 -0.4

Inventories 2.2 3.4 2.2 4.2 1.8 -1.7 -2.0

Land 1.5 1.9 1.3 1.7 1.4 1.4 0.7

Note: For a brief discussion of methods used in preparing these data, see Technical Notes in this release. Source: Bureau of Labor Statistics 
- 15 - 

Table 6. Compound average annual growth rates in real capital services by asset type, private business 

sector, 1987-2010 

In percent 

1987-

2010

1987-

1990

1990-

1995

1995-

2000

2000-

2007

2007-

2010

2009-

2010

All Assets 3.5 3.6 3.1 5.8 3.2 1.2 0.5

Equipment 5.5 4.6 4.9 9.9 5.0 1.7 0.5

All Information Processing 

Equipment &Software (IPES) 10.4 11.0 9.6 17.8 8.1 4.4 3.3

Computers & related 

equipment 20.0 19.2 16.1 40.7 13.8 10.5 9.6

Software 11.6 17.8 13.4 16.8 8.0 3.4 2.1

Communication equipment 7.0 6.0 5.3 10.7 7.1 4.4 3.6

Other IPES 3.2 2.9 4.0 3.6 3.1 2.0 1.3

All other equipment 1.9 2.2 1.8 3.0 1.8 0.3 -0.3

Structures 1.9 2.9 1.9 2.2 1.5 1.5 0.9

Residential rental capital 1.2 1.9 1.0 1.6 1.4 0.0 -0.4

Inventories 2.1 2.9 2.2 4.1 1.7 -1.6 -1.9

Land 1.4 3.1 1.3 1.3 1.3 0.2 0.8

Note: For a brief discussion of methods used in preparing these data, see Technical Notes in this release. Source: Bureau of Labor Statistics