Historical, technical USDL 06-1201 

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

Media contact: (202) 691-5902 WEDNESDAY, JULY 12, 2006 

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

PRODUCTIVITY AND COSTS BY INDUSTRY 

SELECTED SERVICE-PROVIDING AND MINING INDUSTRIES, 2004 

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

productivity and costs for selected service-providing and mining industries. Labor 

productivity – defined as output per hour – rose in 2004 in 26 of the 39 industries studied 

here. Output increased in 31 industries and hours declined in 18 industries. Unit labor 

costs declined in 13 of the 39 industries measured. Of these, 12 were industries that 

recorded productivity gains. 

From 1987 to 2004, labor productivity increased in 34 of the 39 industries. 

Output rose in 34 industries, while hours decreased in 15 industries. Unit labor costs fell 

in nine of the industries measured. 

2003-2004 change 

Labor productivity rose in 2004 in two-thirds of the 39 detailed service-providing 

and mining industries studied. (See table 1.) Seven industries recorded productivity 

growth in excess of 10 percent. In 2004, many of the service-providing and mining 

industries studied increased output, employment, and labor hours. While a larger share of 

industries than in the previous year recorded output increases in 2004, the share of 

industries with increases in labor hours also rose, resulting in a drop from the previous 

year in the share of industries with productivity gains. At the same time, labor 

compensation increased more rapidly than output in many industries, which contributed 

to a rising share of industries with increases in unit labor costs. (See table 2.) 

Of the four largest industries studied, those with employment of over a million 

persons, three had productivity increases in 2004. Productivity rose 7.8 percent in 

automotive repair (NAICS 8111), 5.3 percent in commercial banking (NAICS 52211), 

and 5.7 percent in travel accommodations (NAICS 7211), while productivity in janitorial 

services (NAICS 56172) fell 1.4 percent. The three industries with productivity gains 

had essentially flat or declining unit labor costs during the year, while unit labor costs in 

the janitorial services industry increased 3.2 percent. 
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Output per hour in the mining sector fell 7.7 percent, and only one of four detailed 

mining industries registered productivity growth. Productivity rose 4.1 percent in 

nonmetallic mineral mining and quarrying (NAICS 2123), but fell 13.7 percent in the oil 

and gas extraction industry (NAICS 211). Unit labor costs, which reflect the total labor 

costs required to produce a unit of output, increased 12.4 percent in the mining sector as a 

whole. Growth in unit labor costs was especially strong in the oil and gas extraction 

industry, rising 16.4 percent. 

Productivity increased in 2004 in both of the detailed utilities industries covered. 

Output per hour grew 2.2 percent in power generation and supply (NAICS 2211) and 3.9 

percent in natural gas distribution (NAICS 2212). Output was little changed in either 

industry over the year, but labor hours fell 2.7 percent in power generation and supply 

and 3.6 percent in natural gas distribution. Unit labor costs increased 4.6 percent in the 

power generation and supply industry and 6.9 percent in the natural gas distribution 

industry. 

Four of the six transportation and warehousing industries covered increased 

output per hour in 2004. The strongest growth occurred in air transportation (NAICS 

481). Labor productivity increased 11.4 percent in this industry, as output increased and 

hours remained flat. A productivity decline of 5.7 percent in the couriers and messengers 

industry (NAICS 492) was the only substantial drop in productivity in the sector. Unit 

labor costs declined in two of the six transportation industries. Air transportation 

(NAICS 481) was the only industry in the group to have a considerable decline in unit 

labor costs, 10.7 percent. 

Productivity increased in 2004 in six of the eight information industries covered. 

Double-digit productivity growth occurred in software publishers (NAICS 5112), at 17.0 

percent, wireless telecommunications carriers (NAICS 5172), at 19.1 percent, and cable 

and other program distribution (NAICS 5175), at 12.4 percent. Unit labor costs declined 

in three information industries, with the largest drop, 15.5 percent, occurring in the 

software publishers industry. 

Labor productivity rose in 2004 in 13 of the 19 other service-providing industries 

for which BLS maintains measures. Of these industries, the truck, utility trailer, and RV 

rental and leasing industry (NAICS 53212) recorded the largest productivity increase, 

18.3 percent. Advertising agencies (NAICS 54181) and travel agencies (NAICS 56151) 

also had productivity gains exceeding 10 percent. Productivity fell 11.6 percent in the 

portrait photography studios industry (NAICS 541921). In 2004, unit labor costs 

declined in eight of the 19 measured industries in this group. 

Long-term trends 

Between 1987 and 2004, productivity increased in 34 of the 39 detailed industries 

studied. (See table 1). Output increased in all but five industries over the period, and 

labor hours declined in 15 industries. Unit labor costs declined in nine industries, all of 

which registered productivity increases. (See table 2.) 
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Productivity in the mining sector grew 1.3 percent per year from 1987 to 2004. 

All four detailed mining industries recorded productivity gains. While output trends 

varied by industry, employment and labor hours fell for the sector as a whole and for all 

four individual mining industries. Unit labor costs in the sector increased at an average 

rate of 3.2 percent per year. 

Output per hour increased between 1987 and 2004 in the two utilities industries 

covered by the BLS measures. Productivity growth in power generation and supply 

(NAICS 2211) and natural gas distribution (NAICS 2212) averaged 2.9 percent per year 

and 3.3 percent per year, respectively. In both utilities industries, output increased and 

employment and labor hours fell over the period. Unit labor costs increased at an average 

rate of about 2 percent per year in both industries. 

Between 1987 and 2004, productivity increased in four of the six transportation 

and warehousing industries for which BLS maintains measures. Line-haul railroads 

(NAICS 482111), the only measured industry in this sector where hours declined over the 

period, led productivity growth with an average increase of 5.5 percent per year. Unit 

labor costs increased in most of the transportation and warehousing industries over the 

period, but declined in line-haul railroads. 

Productivity rose between 1987 and 2004 in seven of the eight information 

industries presented here. Output per hour expanded rapidly in the software publishing 

industry (NAICS 5112), averaging 17.7 percent per year. Both wired and wireless 

telecommunications carriers (NAICS 5171 and 5172) registered average annual 

productivity growth of 5.0 percent per year or more. Output growth of over 20 percent 

per year in software publishing and wireless telecommunications carriers contributed to 

the strong productivity growth in those industries. On the other hand, productivity 

growth was essentially flat in the newspaper, periodical, book, and directory publishers 

industry (NAICS 5111), and productivity edged down over the period in the radio and 

television broadcasting industry (NAICS 5151). Unit labor costs declined between 1987 

and 2004 only in the information industries with strong productivity growth – software 

publishers (NAICS 5112) and wired and wireless telecommunications carriers (NAICS 

5171 and 5172). 

Output per hour grew over the long term in 17 of the 19 other service-providing 

industries covered, including medical laboratories (NAICS 621511) and diagnostic 

imaging centers (NAICS 621512) for which data begin in 1994 (1994-2004 average 

annual percent changes represent the long-term growth rates for these industries). In this 

group of industries, productivity growth was modest, with only seven industries 

recording average productivity increases of 2.5 percent per year or more. Productivity 

gains for many of the industries in this group resulted from output growth in excess of 

labor hours growth. In contrast, the small productivity gain in the photofinishing industry 

(NAICS 81292) resulted from a 4.0 percent per year decline in labor hours that exceeded 

a 3.6 percent per year decline in output. Unit labor costs increased between 1987 and 

2004 in all but four of the industries in this group. 
4

Technical Note

Output

Industry output is measured as sectoral output, the total value, in real terms, of 

goods and services produced for sale outside the industry. Wherever possible, the 

indexes of industry output are calculated with a Törnqvist formula. This formula 

aggregates the growth rates of the various industry outputs between two periods, using 

their relative shares in industry value of production, averaged over the two periods, as 

weights. 

 

Industry output measures for service-providing and mining industries are 

constructed primarily using data from the economic censuses and annual surveys of the 

Bureau of the Census, U.S. Department of Commerce, together with information on 

price changes primarily from BLS. Other data sources include the United States 

Geological Survey of the U.S. Department of the Interior, the U.S. Department of 

Energy, the U.S. Department of Transportation, the U.S. Postal Service, and the Postal 

Rate Commission. 

Labor Hours 

The industry labor input measures represent the hours of all workers in the 

industry. The primary source of data on employment and hours is the BLS Current 

Employment Statistics (CES) survey, which provides monthly data on the number of jobs 

held by wage and salary workers in nonfarm establishments. The CES survey also 

provides data on the average weekly hours of production and nonsupervisory workers in 

these establishments. 

Data from the Current Population Survey (CPS) are used to supplement the CES 

data. The Office of Productivity and Technology (OPT) estimates the average weekly 

hours of supervisory and nonproduction workers by industry using data from the CPS 

together with the CES data. CPS data are also used to estimate the employment and 

hours of self-employed and unpaid family workers in most of the service-providing 

industries. The hours of nonsupervisory workers, supervisory workers, and self-employed 

and unpaid family workers are treated as homogeneous and are directly aggregated. 

Other sources of employment and hours data for service industries include the 

American Association of Railroads, the U.S. Department of Transportation, and the U.S. 

Postal Service. 

Unit Labor Costs 

The unit labor cost series represents the cost of labor input required to produce 

one unit of output. The indexes of unit labor costs for each industry are computed by 

dividing an index of industry labor compensation by an index of industry output. 

Compensation, defined as payroll plus supplemental payments, is a measure of the cost to 
5

the employer of securing the services of labor. Payroll includes salaries, wages, 

commissions, dismissal pay, bonuses, vacation and sick leave pay, and compensation in 

kind. Supplemental payments include legally required expenditures and payments for 

voluntary programs. The legally required portion consists primarily of Federal old age 

and survivors’ insurance, unemployment compensation, and workers’ compensation. 

Payments for voluntary programs include all programs not specifically required by 

legislation, such as the employer portion of private health insurance and pension plans. 

Labor Productivity 

The industry labor productivity measures describe the relationship between output 

and the labor time involved in its production. They show the changes from period to 

period in the amount of goods and services produced per hour. Industry output per hour 

indexes are prepared from data published by various public and private agencies, using 

the greatest level of industry detail available. 

Although the labor productivity measures relate output to hours of employees or 

all persons engaged in an industry, they do not measure the specific contribution of labor, 

capital, or any other factor of production. Rather, they reflect the joint effects of many 

influences, including changes in technology; capital investment; level of output; 

utilization of capacity, energy, and materials; the organization of production; managerial 

skill; and the characteristics and effort of the workforce. 

Year-to-year movements in productivity measures for some industries might be 

erratic, particularly in the smaller industries. The annual changes in an industry’s output 

and use of labor may reflect cyclical changes in the economy rather than long-term 

trends. Also, annual productivity indexes are based on sample data, which are likely to 

differ from data generated by a census of establishments in the industry. As a result, 

long-term trends tend to be more reliable indicators of the performance of an industry 

than are the year-to-year changes. 

Notes

The measures in this news release replace the mining, utilities, and service 

industry series published in table 51 of the Monthly Labor Review and in the news 

release Productivity and Costs by Industry, 2003 (released August 26, 2005), and may 

reflect revisions to those series. Output measures for the U.S. Postal Service (NAICS 

491) reflect changes to the weights used to aggregate products and services. All of the 

measures for 2004 in this release are preliminary and subject to revision. 

Estimates of employment and hours of self-employed and unpaid family workers 

for all years have been revised to more accurately account for employment and hours of 

proprietors in secondary jobs. Previously, a proprietor’s hours worked at secondary jobs 

were attributed to the industry of the proprietor’s primary job. Hours worked at 

secondary jobs are now included in a proprietor’s hours only if the person is a proprietor 

in the secondary job, and these hours are classified in the industry of the secondary job. 
6

Published productivity and unit labor cost indexes for selected NAICS industries, 

including the industries covered in this report, can be accessed electronically by visiting 

the Labor Productivity and Costs Web site: http://www.bls.gov/lpc/home.htm. While 

the index numbers and rates of change reported by BLS in this news release are rounded 

to one decimal place, all percent changes in this release and on the BLS web site are 

calculated using index numbers to three decimal places. 

Measures for additional detailed service-providing industries are available upon 

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

sending a request by e-mail: dipsweb@bls.gov. Data on industry employment, annual 

hours, the net value of production, and the implicit price deflator for output also are 

available upon request. 

Material in this report is in the public domain and, with appropriate credit, may be 

used without permission. Information in this report will be made available to sensoryimpaired individuals upon request. Voice phone: 202-691-5618; TDD message referral 

phone number: 1-800-877-8339. 
Table 1. Annual percent change in output per hour and related series, 1987-2004 and 2003-2004

2004 Annual percent change, 1987-2004 1/ Annual percent change, 2003-2004

NAICS Industry Employment Output Output

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

Mining

21 Mining 523 1.3 -0.2 -1.5 -7.7 -1.2 7.1

211 Oil and gas extraction 123 2.0 -0.9 -2.9 -13.7 -2.6 12.9

212 Mining, except oil and gas 205 3.0 1.0 -2.0 1.2 3.4 2.2

2121 Coal mining 71 3.9 0.0 -3.7 -0.3 3.8 4.1

2122 Metal ore mining 28 4.0 2.2 -1.7 -4.7 0.9 5.9

2123 Nonmetallic mineral mining and quarrying 107 1.4 1.1 -0.3 4.1 4.1 -0.1

Utilities

2211 Power generation and supply 409 2.9 1.1 -1.8 2.2 -0.5 -2.7

2212 Natural gas distribution 109 3.3 1.5 -1.8 3.9 0.2 -3.6

Transportation and Warehousing

481 Air transportation 483 2.6 3.4 0.8 11.4 11.5 0.0

482111 Line-haul railroads 178 5.5 2.6 -2.7 3.1 5.6 2.5

48412 General freight trucking, long-distance 864 1.5 3.2 1.7 -0.8 6.1 6.9

48421 Used household and office goods moving 104 -1.1 0.3 1.4 2.9 5.7 2.7

491 Postal service 782 1.1 1.2 0.1 2.1 0.1 -1.9

492 Couriers and messengers 598 -0.9 2.6 3.5 -5.7 -2.3 3.6

Information

511 Publishing 953 4.3 5.1 0.8 3.9 4.3 0.4

5111 Newspaper, book, and directory publishers 718 0.1 -0.4 -0.4 -2.4 0.6 3.0

5112 Software publishers 236 17.7 26.4 7.4 17.0 9.5 -6.5

51213 Motion picture and video exhibition 140 0.8 2.5 1.7 3.3 -3.1 -6.2

515 Broadcasting, except internet 338 0.5 2.0 1.5 1.5 2.0 0.5

5151 Radio and television broadcasting 249 -0.4 -0.1 0.3 -3.1 -0.8 2.4

5152 Cable and other subscription programming 88 2.4 8.2 5.6 8.5 6.9 -1.5

5171 Wired telecommunications carriers 558 5.0 3.8 -1.2 0.8 -4.5 -5.3

5172 Wireless telecommunications carriers 195 8.2 24.0 14.6 19.1 16.5 -2.2

5175 Cable and other program distribution 132 0.5 5.8 5.3 12.4 8.7 -3.3

Finance and Insurance

52211 Commercial banking 1281 2.4 2.0 -0.4 5.3 4.8 -0.5

Real Estate and Rental and Leasing

532111 Passenger car rental 125 1.6 3.8 2.1 -1.8 9.3 11.3

53212 Truck, trailer and RV rental and leasing 62 4.8 4.6 -0.2 18.3 13.0 -4.5

53223 Video tape and disc rental 158 4.2 7.4 3.1 4.2 6.6 2.3

Professional and Technical Services

541213 Tax preparation services 131 1.2 4.3 3.1 -7.9 6.4 15.4

54131 Architectural services 207 1.6 3.7 2.1 5.2 5.3 0.1

54133 Engineering services 831 1.1 3.0 1.9 7.4 10.5 2.9

54181 Advertising agencies 180 1.9 1.8 -0.2 10.3 9.4 -0.8

541921 Photography studios, portrait 78 -0.4 2.5 2.9 -11.6 2.6 16.1

Administrative and Support Services

56151 Travel agencies 128 3.8 2.9 -0.8 13.9 7.7 -5.4

56172 Janitorial services 1129 3.1 4.6 1.4 -1.4 3.0 4.5
Table 1. Annual percent change in output per hour and related series, 1987-2004 and 2003-2004--Continued

2004 Annual percent change, 1987-2004 1/ Annual percent change, 2003-2004

NAICS Industry Employment Output Output

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

Health Care and Social Assistance

6215 Medical and diagnostic laboratories 198 4.5 7.5 2.9 0.1 4.7 4.6

621511 Medical laboratories 136 3.6 6.2 2.5 1.6 4.4 2.7

621512 Diagnostic imaging centers 62 5.6 9.8 4.0 -3.7 5.3 9.4

Accommodation and Food Services

7211 Traveler accommodations 1750 2.3 3.1 0.8 5.7 6.0 0.4

Other Services

8111 Automotive repair and maintenance 1155 1.6 2.6 1.0 7.8 1.2 -6.1

81211 Hair, nail and skin care services 899 2.5 3.5 1.0 5.7 8.9 3.0

81221 Funeral homes and funeral services 111 -0.6 0.3 1.0 -2.4 -5.9 -3.5

8123 Drycleaning and laundry services 382 0.8 0.5 -0.3 7.4 0.6 -6.3

81292 Photofinishing 43 0.4 -3.6 -4.0 2.5 -11.8 -13.9

1/ For NAICS industries 6215, 621511, and 62512, annual percent changes are for 1994-04.
Table 2. Annual percent change in total compensation, output, and unit labor costs, 1987-2004 and 2003-2004

2004 Annual percent change, 1987-2004 1/ Annual percent change 2003-2004

NAICS Industry Employment Total Unit labor Total Unit labor

code (thousands) compensation Output costs compensation Output costs

Mining

21 Mining 523 2.9 -0.2 3.2 11.1 -1.2 12.4

211 Oil and gas extraction 123 3.5 -0.9 4.4 13.4 -2.6 16.4

212 Mining, except oil and gas 205 0.8 1.0 -0.2 6.2 3.4 2.7

2121 Coal mining 71 -1.4 0.0 -1.5 6.6 3.8 2.7

2122 Metal ore mining 28 2.3 2.2 0.1 8.0 0.9 6.9

2123 Nonmetallic mineral mining and quarrying 107 3.2 1.1 2.1 5.2 4.1 1.1

Utilities

2211 Power generation and supply 409 3.0 1.1 1.9 4.1 -0.5 4.6

2212 Natural gas distribution 109 3.4 1.5 1.9 7.1 0.2 6.9

Transportation and Warehousing

481 Air transportation 483 4.0 3.4 0.5 -0.5 11.5 -10.7

482111 Line-haul railroads 178 0.8 2.6 -1.8 5.6 5.6 0.0

48412 General freight trucking, long-distance 864 3.5 3.2 0.2 8.9 6.1 2.7

48421 Used household and office goods moving 104 4.4 0.3 4.1 5.7 5.7 -0.1

491 Postal service 782 4.1 1.2 2.8 3.4 0.1 3.2

492 Couriers and messengers 598 7.3 2.6 4.6 6.8 -2.3 9.3

Information

511 Publishing 953 5.9 5.1 0.8 -2.4 4.3 -6.5

5111 Newspaper, book, and directory publishers 718 3.6 -0.4 4.0 1.2 0.6 0.6

5112 Software publishers 236 13.1 26.4 -10.5 -7.4 9.5 -15.5

51213 Motion picture and video exhibition 140 4.3 2.5 1.7 4.5 -3.1 7.8

515 Broadcasting, except internet 338 5.5 2.0 3.5 6.3 2.0 4.2

5151 Radio and television broadcasting 249 4.6 -0.1 4.7 5.4 -0.8 6.2

5152 Cable and other subscription programming 88 11.0 8.2 2.6 13.7 6.9 6.4

5171 Wired telecommunications carriers 558 2.0 3.8 -1.7 -6.4 -4.5 -1.9

5172 Wireless telecommunications carriers 195 17.1 24.0 -5.6 16.5 16.5 0.0

5175 Cable and other program distribution 132 10.2 5.8 4.1 7.1 8.7 -1.5

Finance and Insurance

52211 Commercial banking 1281 5.4 2.0 3.4 2.9 4.8 -1.8

Real Estate and Rental and Leasing

532111 Passenger car rental 125 6.7 3.8 2.9 6.4 9.3 -2.7

53212 Truck, trailer and RV rental and leasing 62 3.8 4.6 -0.8 5.1 13.0 -7.0

53223 Video tape and disc rental 158 5.7 7.4 -1.6 4.8 6.6 -1.7

Professional and Technical Services

541213 Tax preparation services 131 4.4 4.3 0.1 12.7 6.4 5.9

54131 Architectural services 207 5.6 3.7 1.8 6.7 5.3 1.4

54133 Engineering services 831 6.3 3.0 3.3 7.8 10.5 -2.5

54181 Advertising agencies 180 4.8 1.8 3.0 4.1 9.4 -4.9

541921 Photography studios, portrait 78 5.2 2.5 2.5 3.7 2.6 1.1

Administrative and Support Services

56151 Travel agencies 128 5.1 2.9 2.2 0.1 7.7 -7.0

56172 Janitorial services 1129 5.6 4.6 1.0 6.3 3.0 3.2
Table 2. Annual percent change in total compensation, output, and unit labor costs, 1987-2004 and 2003-2004--Continued

2004 Annual percent change, 1987-2004 1/ Annual percent change 2003-2004

NAICS Industry Employment Total Unit labor Total Unit labor

code (thousands) compensation Output costs compensation Output costs

Health Care and Social Assistance

6215 Medical and diagnostic laboratories 198 6.2 7.5 -1.2 11.5 4.7 6.5

621511 Medical laboratories 136 5.4 6.2 -0.7 10.6 4.4 6.0

621512 Diagnostic imaging centers 62 8.1 9.8 -1.6 13.6 5.3 7.9

Accommodation and Food Services

7211 Traveler accommodations 1750 5.5 3.1 2.4 6.1 6.0 0.1

Other Services

8111 Automotive repair and maintenance 1155 4.5 2.6 1.8 -2.4 1.2 -3.6

81211 Hair, nail and skin care services 899 5.6 3.5 2.0 9.4 8.9 0.4

81221 Funeral homes and funeral services 111 5.1 0.3 4.7 8.8 -5.9 15.6

8123 Drycleaning and laundry services 382 3.4 0.5 2.9 1.0 0.6 0.4

81292 Photofinishing 43 -0.1 -3.6 3.6 -10.1 -11.8 1.8

1/ For NAICS industries 6215, 621511, and 62512, annual percent changes are for 1994-04.