- 1 - 

For release 10:00 a.m. (EDT) Tuesday, August 24, 2010 USDL-10-1171

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

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

MULTIFACTOR PRODUCTIVITY TRENDS - 2008

Private nonfarm business sector multifactor productivity increased at a 0.1 percent annual rate in 2008, the 

U.S. Bureau of Labor Statistics reported today. (See chart 1, table A.) This was the slowest gain in multifactor 

productivity since 1995. (See table 1.) Multifactor productivity measures the change in output per unit of 

combined inputs of labor and capital. Multifactor productivity is designed to measure the joint influences on 

economic growth of technological change, efficiency improvements, returns to scale, reallocation of resources, 

and other factors, 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 since it includes 

information on capital services and other data that are not available on a quarterly basis. Additionally, multifactor 

productivity measures for the private business and private nonfarm business sectors account for shifts in the 

composition of labor. Estimates of labor composition are not included in the quarterly labor productivity 

measures. 

The modest multifactor productivity gain in 2008 reflected a 0.2 percent decrease in output and a 0.3 percent 

decrease in the combined inputs of capital and labor. Capital services grew by 2.8 percent, the slowest rate of 

growth since 2004. Labor input fell 1.7 percent, the largest decline since 2002. 

Private business sector multifactor productivity grew 0.1 percent in 2008, the slowest annual growth rate since 

1995. The multifactor productivity gain in 2008 reflected no change in the growth rate of output and a 0.1 percent 

decrease in the combined inputs of capital and labor. 

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

nonfarm business sector, 2000-2008 

Percent change 

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

2000 2001 2002 2003 2004 2005 2006 2007 2008

Output per hour of all persons Multifactor productivity Output per unit of capital

Multifactor productivity measures are now developed from data based on the 2002 North American Industry 

Classification System (NAICS). Previous measures were on a 1997 NAICS basis. Additionally, the index series 

have been rebased from 2000=100 to 2005=100. 
- 2 - 

Historical trends in private nonfarm business 

Multifactor productivity in private nonfarm business grew 1.0 percent annually between 1987 (the starting year of 

the series) and 2008. (See table A.) Output increased at a 3.2 percent annual rate over that period and combined 

inputs of labor and capital rose an average of 2.2 percent per year. Output per hour worked (labor productivity) 

grew at a 2.2 percent rate. For the 2000-2007 period, multifactor productivity in private nonfarm business rose 

more rapidly than in previous periods, averaging 1.4 percent per year, slightly outpacing the 1.3 percent growth 

rate during the 1995-2000 period. 

Historical trends in labor productivity growth can be viewed as the sum of three components: multifactor 

productivity growth, the contribution of increased capital intensity, and the contribution of shifts in labor 

composition. The relationship between labor productivity growth and these three components can be seen in table 

B and chart 2. Chart 2 shows how relative to output per hour, contributions of multifactor productivity and of 

capital intensity increased during the latter half of the 1990s. These contributions have continued to be relatively 

high over the 2000-2007 period. 

Of the 2.2 percent growth rate in labor productivity for the 1987-2008 period, 1.0 percent can be attributed to 

increases in multifactor productivity, 0.9 percent to the contribution of capital intensity, and 0.3 percent to 

changes in labor composition. (See table B.) 

Previous and revised multifactor productivity data for 1987-2008 for the private nonfarm business sector are 

displayed in table C. The differences in 2008 are largely due to the fact that previous results were based on 

preliminary information. The 0.1-percent change in multifactor productivity growth for the private nonfarm 

business sector is much lower than the 1.1-percent change reported on May 6, 2009, based on preliminary 

information. This downward revision was due to output being revised down to a decline of 0.2 percent from an 

increase of 0.8 percent.

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

1987-2008 

 Percent change

Multifactor productivity plus contribution of capital intensity and labor composition may not sum to output per hour 

due to independent rounding. 

0.9

0.6 0.6

1.2 1.0

1.6

0.3

0.4 0.5

0.2

0.2

0.3 1.0

0.5 0.5

1.3

1.4 0.1

0.0

0.5

1.0

1.5

2.0

2.5

3.0

1987-2008 1987-1990 1990-1995 1995-2000 2000-2007 2007-2008

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

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

business and private business sectors for selected periods, 1987-2008 

In percent 

1987-

2008

1987-

1990

1990-

1995

1995-

2000

2000-

2007

2007-

2008

Private nonfarm business1

Productivity

 Multifactor Productivity2 1.0 0.5 0.5 1.3 1.4 0.1

 Output per hour of all persons 2.2 1.5 1.6 2.8 2.7 2.1

 Output per unit of capital services -0.8 -0.4 -0.5 -1.1 -0.6 -2.8

Output 3.2 3.2 2.9 5.0 2.7 -0.2

Inputs

 

 Combined inputs3

2.2 2.7 2.4 3.6 1.3 -0.3

 Labor Input41.4 2.3 2.0 2.5 0.4 -1.7

 Hours 1.0 1.7 1.3 2.2 0.0 -2.2

 Labor composition50.5 0.6 0.7 0.3 0.3 0.5

 Capital services 4.1 3.7 3.4 6.2 3.4 2.8

Analytic ratio

 Capital services per hour of all persons 3.0 1.9 2.0 3.9 3.4 5.1

Private business1

Productivity

 Multifactor Productivity2 1.1 0.6 0.4 1.5 1.5 0.1

 Output per hour of all persons 2.3 1.6 1.5 2.9 2.7 2.1

 Output per unit of capital services -0.7 -0.4 -0.3 -0.9 -0.5 -2.6

Output 3.2 3.2 2.9 5.0 2.7 0.0

Inputs

 

 Combined inputs3

2.2 2.6 2.4 3.4 1.2 -0.1

 Labor Input41.4 2.1 2.0 2.3 0.3 -1.5

 Hours 0.9 1.6 1.3 2.0 0.0 -2.1

 Labor composition50.5 0.6 0.7 0.3 0.3 0.6

 Capital services 3.9 3.6 3.2 6.0 3.3 2.7

Analytic ratio

 Capital services per hour of all persons 3.0 2.0 1.8 3.9 3.3 4.9

1 Excludes government enterprises. 

2 Output per unit of combined labor and capital inputs. 

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

4 Index of hours at work; hours at work by age, education, and gender group are weighted by each group’s share of labor compensation. 

5 Ratio of labor input to hours. 
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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, 1987-2008 

In percent 

1987-

2008

1987-

1990

1990-

1995

1995-

2000

2000-

2007

2007-

2008

Private nonfarm business1

Output per hour of all persons 2.2 1.5 1.6 2.8 2.7 2.1

Contribution of capital intensity20.9 0.6 0.6 1.2 1.0 1.6

 Contribution of information 

 processing equipment and 

 software3

0.6 0.5 0.5 0.9 0.6 0.7

 Contribution of all

 other capital services

0.3 0.1 0.1 0.2 0.4 1.0

Contribution of labor composition40.3 0.4 0.5 0.2 0.2 0.3

Multifactor productivity5 1.0 0.5 0.5 1.3 1.4 0.1

 Contribution of R&D to

 multifactor productivity

 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 2.1

Contribution of capital intensity20.9 0.6 0.6 1.2 1.0 1.6

 Contribution of information 

 processing equipment and 

 software3

0.6 0.5 0.5 0.9 0.6 0.6

 Contribution of all

 other capital services

0.3 0.1 0.1 0.2 0.4 1.0

Contribution of labor composition40.3 0.4 0.5 0.2 0.2 0.4

Multifactor productivity51.1 0.6 0.4 1.5 1.5 0.1

1 Excludes government enterprises.

2 Growth rate in capital services per hour multiplied by capital's share of current dollar costs.

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

4 Growth rate of labor composition (the growth rate of labor input less the growth rate of the hours of all persons)

multiplied by labor's share of current dollar costs.

5 Output per unit of combined labor and capital inputs.

Multifactor productivity plus contribution of capital intensity and labor composition may not sum to output per hour 

due to independent rounding. Contribution of information processing equipment and all other capital may not sum 

to the contribution of capital intensity due to independent rounding. 
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Table C. Annual growth rates of the preliminary and revised multifactor productivity measures in the 

private nonfarm business sector for the 1987-2008 period 

 Percent change from previous year

Multifactor Productivity

Year Preliminary Revised

1988 1.0 1.0

1989 0.0 0.1

1990 0.4 0.4

1991 -0.8 -0.9

1992 2.4 2.3

1993 0.2 0.3

1994 0.8 0.7

1995 0.1 0.0

1996 1.4 1.4

1997 0.7 0.6

1998 1.3 1.5

1999 1.3 1.6

2000 1.1 1.6

2001 0.4 0.7

2002 2.1 2.4

2003 2.6 2.5

2004 2.6 2.6

2005 1.3 1.0

2006 0.5 0.4

2007 0.2 0.5

2008 1.1 0.1
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TECHNICAL NOTES 

Capital Input: Capital input measures the services derived from the stock of physical assets and 

software. The assets included are fixed business equipment, structures, inventories, and land. Among 

equipment, BLS provides additional detail for 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 input measures, as are owner-occupied residential 

structures. The aggregate capital input 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. Data on investments in physical assets 

are obtained from BEA. Data on inventories are obtained from BEA using additional information from 

IRS Corporation Income Returns. Estimates for land in the farm sector are obtained from USDA. 

Nonfarm industry detail is based on IRS book value data. Current-dollar gross product originating 

(GPO) data, obtained from BEA, are used in estimating capital rental prices. 

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 their shares of labor compensation. Hours paid of employees are 

largely obtained from the Current Employment Statistics program (CES). These hours of employees are 

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

National Compensation Survey (NCS) and the Hours at Work Survey. Hours at work for nonproduction 

and supervisory workers are derived using data from the 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 June 3, 2010 news 

release. 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 and capital input are combined using Tornqvist aggregation, employing 

weights that represent each component's share of total costs. Total costs are defined as the value of 

output (Gross Product Originating) 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. The index uses changing weights: The share in each year is averaged 

with the preceding year's share. 
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Productivity: The private nonfarm business and private nonfarm business 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, capital, or any other factor of 

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

capital, and labor on economic growth of technological change, efficiency improvements, returns to 

scale, reallocation of resources due to shifts in factor inputs across industries, and other factors. 

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

by dividing an output index by an index of labor input and capital services. The output indexes are 

computed as chained superlative indexes (Fisher Ideal indexes) of components of real output. For the 

years 1987 to 2008, BEA supplies the output indexes. BLS adjusts these to remove the output of 

government enterprises.

Output: 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. Additionally, the private nonfarm business sector excludes farms 

from the private business sector, but includes agricultural services. Multifactor measures exclude 

government enterprises, while the BLS quarterly Productivity and Cost series include them. The output 

measures reflect the revised National Income and Product Accounts (NIPA) data released by BEA on 

July 31, 2009 but do not reflect the revised data released by BEA on July 30, 2010. 

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 for the 

years 1987-2008 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 .

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. 
- 8 - 

Table 1. Private nonfarm business sector: productivity and related measures for the 1987-20081 period

Percent change from previous year 

Productivity Inputs

Year

Output 

per hour 

of all 

persons

Output 

per unit 

of 

capital

Multifactor 

Productivity2 Output3

Labor

Input4

Capital

Services5

Combined 

units of 

labor and 

capital6

Capital 

per hour 

of all 

persons

1988 1.7 0.9 1.0 4.6 3.5 3.7 3.5 0.8

1989 0.8 -0.3 0.1 3.5 3.3 3.9 3.5 1.1

1990 1.9 -1.9 0.4 1.4 0.1 3.4 1.0 3.8

1991 1.7 -3.6 -0.9 -0.9 -1.1 2.9 0.0 5.5

1992 4.0 1.3 2.3 3.8 1.0 2.5 1.5 2.7

1993 0.7 0.4 0.3 3.6 3.3 3.2 3.3 0.3

1994 1.1 0.9 0.7 4.7 4.1 3.7 4.0 0.1

1995 0.5 -1.2 0.0 3.3 2.7 4.5 3.2 1.7

1996 2.6 -0.4 1.4 4.4 2.2 4.9 3.0 3.0

1997 1.5 -0.4 0.6 5.1 4.0 5.5 4.5 1.9

1998 3.0 -1.2 1.5 5.2 2.4 6.6 3.6 4.3

1999 3.3 -1.4 1.6 5.6 2.6 7.1 3.9 4.7

2000 3.4 -2.2 1.6 4.5 1.2 6.8 2.8 5.8

2001 3.1 -3.9 0.7 1.0 -1.6 5.1 0.3 7.3

2002 4.7 -1.5 2.4 1.9 -2.0 3.5 -0.5 6.2

2003 3.7 0.2 2.5 3.1 -0.4 2.9 0.6 3.5

2004 2.8 1.7 2.6 4.2 1.2 2.4 1.5 1.1

2005 1.7 0.1 1.0 3.4 1.9 3.3 2.4 1.5

2006 1.0 -0.2 0.4 3.2 2.5 3.4 2.8 1.2

2007 1.9 -0.9 0.5 2.4 1.2 3.3 1.9 2.8

2008 2.1 -2.8 0.1 -0.2 -1.7 2.8 -0.3 5.1

See footnotes following table 4. Source: Bureau of Labor Statistics 
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Table 2. Private business sector: productivity and related measures for the 1987-20081 period

Percent change from previous year 

Productivity Inputs

Year

Output 

per hour 

of all 

persons

Output 

per unit 

of 

capital

Multifactor 

Productivity2 Output3

Labor

Input4

Capital

Services5

Combined 

units of 

labor and 

capital6

Capital 

per hour 

of all 

persons

1988 1.6 0.5 0.8 4.4 3.4 3.8 3.5 1.1

1989 1.0 -0.1 0.3 3.7 3.2 3.8 3.4 1.1

1990 2.2 -1.6 0.7 1.5 -0.1 3.1 0.9 3.8

1991 1.6 -3.4 -0.9 -0.8 -1.0 2.7 0.1 5.2

1992 4.2 1.6 2.5 4.0 1.0 2.3 1.4 2.5

1993 0.6 0.3 0.2 3.3 3.1 3.1 3.1 0.4

1994 0.9 1.2 0.7 4.9 4.5 3.6 4.2 -0.3

1995 0.1 -1.4 -0.3 2.9 2.7 4.4 3.2 1.6

1996 2.9 -0.1 1.7 4.6 2.0 4.6 2.8 3.0

1997 1.7 -0.1 0.8 5.2 3.9 5.3 4.4 1.9

1998 3.0 -1.2 1.5 5.1 2.3 6.4 3.5 4.3

1999 3.5 -1.2 1.8 5.6 2.4 6.9 3.7 4.7

2000 3.5 -1.9 1.7 4.6 1.2 6.6 2.8 5.5

2001 3.2 -3.8 0.8 0.9 -1.8 5.0 0.2 7.3

2002 4.6 -1.3 2.4 2.0 -1.9 3.4 -0.4 6.0

2003 3.9 0.4 2.6 3.1 -0.5 2.8 0.5 3.5

2004 2.9 1.6 2.6 4.2 1.1 2.5 1.5 1.3

2005 1.7 0.2 1.0 3.4 1.9 3.2 2.3 1.5

2006 1.0 0.0 0.5 3.1 2.3 3.1 2.6 1.0

2007 1.8 -0.8 0.5 2.3 1.1 3.1 1.8 2.6

2008 2.1 -2.6 0.1 0.0 -1.5 2.7 -0.1 4.9

See footnotes following table 4. Source: Bureau of Labor Statistics 
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Table 3. Private nonfarm business sector: indexes of productivity and related measures, 1987-20081

Indexes 2005=100 

Productivity Inputs

Year

Output 

per hour 

of all 

persons

Output 

per unit 

of 

capital

Multifactor 

Productivity2 Output3

Labor

Input4

Capital

Services5

Combined 

units of 

labor and 

capital6

Capital 

per hour 

of all 

persons

1987 66.1 113.6 82.1 54.2 75.6 47.7 66.0 58.2

1988 67.2 114.6 83.0 56.7 78.3 49.4 68.3 58.6

1989 67.7 114.2 83.0 58.7 80.9 51.4 70.7 59.3

1990 69.0 112.1 83.3 59.5 80.9 53.1 71.4 61.5

1991 70.2 108.1 82.6 59.0 80.0 54.6 71.4 64.9

1992 73.0 109.5 84.5 61.3 80.8 56.0 72.5 66.7

1993 73.4 109.9 84.8 63.5 83.5 57.8 74.9 66.8

1994 74.2 110.9 85.4 66.5 87.0 59.9 77.9 66.9

1995 74.6 109.6 85.4 68.6 89.3 62.6 80.4 68.1

1996 76.5 109.1 86.5 71.7 91.3 65.7 82.8 70.1

1997 77.6 108.7 87.1 75.3 94.9 69.3 86.5 71.4

1998 80.0 107.3 88.4 79.3 97.2 73.9 89.7 74.5

1999 82.6 105.9 89.9 83.7 99.8 79.1 93.2 78.0

2000 85.4 103.5 91.3 87.5 101.0 84.5 95.8 82.5

2001 88.1 99.5 91.9 88.4 99.4 88.8 96.1 88.6

2002 92.2 98.0 94.2 90.1 97.4 91.9 95.7 94.1

2003 95.7 98.2 96.5 92.8 97.0 94.5 96.2 97.4

2004 98.4 99.9 99.0 96.7 98.1 96.8 97.7 98.5

2005 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

2006 101.0 99.8 100.4 103.2 102.5 103.4 102.8 101.2

2007 102.9 98.9 100.9 105.6 103.7 106.8 104.7 104.0

2008 105.0 96.1 101.0 105.5 101.9 109.7 104.4 109.3

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

Table 4. Private business sector: indexes of productivity and related measures, 1987-20081

Indexes 2005=100 

Productivity Inputs

Year

Output 

per hour 

of all 

persons

Output 

per unit 

of 

capital

Multifactor 

Productivity2 Output3

Labor

Input4

Capital

Services5

Combined 

units of 

labor and 

capital6

Capital 

per hour 

of all 

persons

1987 65.2 111.0 81.1 54.1 76.5 48.8 66.7 58.8

1988 66.3 111.6 81.8 56.5 79.0 50.6 69.0 59.4

1989 67.0 111.5 82.0 58.6 81.6 52.5 71.4 60.1

1990 68.4 109.7 82.6 59.5 81.5 54.2 72.0 62.3

1991 69.5 106.0 81.8 59.0 80.7 55.6 72.1 65.6

1992 72.5 107.8 83.9 61.4 81.5 56.9 73.1 67.2

1993 72.9 108.0 84.1 63.4 84.0 58.7 75.4 67.5

1994 73.6 109.4 84.7 66.5 87.8 60.8 78.6 67.3

1995 73.7 107.8 84.4 68.5 90.1 63.5 81.1 68.3

1996 75.8 107.8 85.9 71.6 91.9 66.4 83.4 70.3

1997 77.1 107.6 86.6 75.3 95.5 70.0 87.0 71.7

1998 79.5 106.4 87.9 79.2 97.7 74.4 90.1 74.7

1999 82.3 105.2 89.5 83.6 100.0 79.5 93.4 78.2

2000 85.2 103.1 91.0 87.4 101.2 84.8 96.0 82.6

2001 87.9 99.2 91.7 88.2 99.5 89.0 96.2 88.6

2002 91.9 97.8 93.9 90.0 97.5 92.0 95.8 94.0

2003 95.5 98.2 96.4 92.8 97.1 94.5 96.2 97.3

2004 98.3 99.8 99.0 96.7 98.1 96.9 97.7 98.5

2005 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

2006 101.0 100.0 100.5 103.1 102.3 103.1 102.6 101.0

2007 102.9 99.3 101.0 105.5 103.5 106.2 104.4 103.6

2008 105.0 96.7 101.1 105.4 102.0 109.1 104.3 108.7

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

Footnotes, Tables 1-4

Source: BLS develops productivity measures using output data published by the Bureau of Economic 

Analysis (BEA), compensation and hours data published by other Bureau of Labor Statistics (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 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 also excludes farms but includes agricultural services. 

(2) Output per unit of combined labor and capital inputs. 

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

(4) Index of hours at work of all persons including employees, proprietors, and unpaid family 

workers, classified by age, education, and gender. This superlative chain 

index is computed by combining changes in the hours of each age, education, and gender group 

weighted by each group’s share of labor compensation. 

(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) Labor input combined with capital input are weighted with labor's and capital's share of 

 current dollar costs to form a superlative chained index. 
- 13 - 

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

business sector, 1987-2008

In percent 

1987-

2008

1987-

1990

1990-

1995

1995-

2000

2000-

2007

2007-

2008

All Assets

4.1 3.7 3.4 6.2 3.4 2.8

Equipment

6.1 4.9 5.1 9.9 5.1 3.8

All Information Processing 

Equipment &Software (IPES) 11.1 10.9 9.6 17.6 8.3 6.7

Computers & related 

equipment 21.3 19.0 16.2 40.5 14.5 13.8

Software 12.6 17.8 13.5 16.8 8.1 5.7

Communication equipment 6.9 6.1 5.3 10.3 6.3 5.1

Other IPES 4.2 3.0 4.2 3.9 4.6 5.4

All other equipment 2.2 2.2 1.9 3.2 1.9 1.6

Structures 2.0 2.8 2.0 2.2 1.5 1.9

Residential rental capital 1.5 2.1 1.2 1.7 1.5 0.5

Inventories 2.7 3.2 2.2 3.9 2.2 0.5

Land 1.6 1.8 1.3 1.7 1.5 2.4

 Source: Bureau of Labor Statistics 

Note: For a brief discussion of methods used in preparing these data, see Technical Notes in this release. 
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Table 6. Compound average annual growth rates in real capital services by asset type, private business 

sector, 1987-2008 

In percent 

1987-

2008

1987-

1990

1990-

1995

1995-

2000

2000-

2007

2007-

2008

All Assets

3.9 3.6 3.2 6.0 3.3 2.7

Equipment

6.0 4.6 4.9 9.8 5.1 3.8

All Information Processing 

Equipment &Software (IPES) 11.1 10.9 9.6 17.6 8.3 6.7

Computers & related 

equipment 21.3 19.1 16.2 40.5 14.5 13.8

Software 12.6 17.8 13.5 16.7 8.1 5.7

Communication equipment 6.9 6.1 5.3 10.3 6.3 5.1

Other IPES 4.2 3.0 4.3 3.9 4.6 5.4

All other equipment 2.1 2.2 1.8 3.1 1.8 1.6

Structures 1.9 2.7 1.9 2.1 1.4 1.9

Residential rental capital 1.5 2.1 1.2 1.7 1.5 0.5

Inventories 2.5 2.8 2.2 3.8 2.1 0.4

Land 1.5 3.2 1.4 1.2 0.9 1.8

 Source: Bureau of Labor Statistics 

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