For release 10:00 a.m. (EDT) Wednesday, March 30, 2011 USDL-11-0435

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

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

 MULTIFACTOR PRODUCTIVITY TRENDS - 2009

Private nonfarm business sector multifactor productivity grew at a modest 0.1 percent annual rate in 2009, the 

U.S. Bureau of Labor Statistics reported today. (See chart 1, table A.) In 2009, the gain in multifactor 

productivity reflected decreases of 3.7 percent in output and 3.8 percent in the combined inputs of capital and 

labor. Capital services grew by 1.1 percent, and labor input – which is the combined effect of hours worked and 

labor composition – fell 6.3 percent. (See table A, table 1.) For both the private nonfarm business and private 

business sectors, the declines recorded in output, combined inputs of capital and labor, and labor input were the 

largest in the series, which began in 1987. Growth in capital services was also the slowest recorded since the 

series began. 

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

Private business sector multifactor productivity grew 0.2 percent in 2009, reversing a decline of 0.9 percent in 

2008. The multifactor productivity gain in 2009 reflected decreases of 3.6 percent in output and 3.8 percent in the 

combined inputs of capital and labor. Capital services grew by 1.0 percent, and labor input fell by 6.3 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, 2000-2009 

 Annual 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 2009

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 between 1987 (the starting year of 

the series) and 2009. Output increased at a 2.8 percent annual rate over that period and combined inputs of capital 

and labor rose an average of 1.9 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. Multifactor productivity decreased for the 2007-2009 

period, averaging a decline of 0.5 percent per year. Output decreased at a 2.4 percent annual rate over that period 

and combined inputs of capital and labor fell an average of 1.9 percent per year. (See table A.) 

Labor productivity growth, or output per hour, 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. 

Multifactor productivity and the contribution of capital intensity contributed more to output per hour during the 

latter half of the 1990s. (See table B.) The growth rate of these two components continued to be relatively high 

over the 2000-2007 period. For 2007-2009, the contribution of capital intensity, reflecting the ratio of capital to 

hours worked, rose sharply compared to previous periods due to a sharp decline in hours worked. Of the 2.4 

percent growth rate in private nonfarm business labor productivity for the 2007-2009 period, 2.3 percent can be 

attributed to the contribution of capital intensity, while the 0.5 percent contribution of labor composition was 

offset by the 0.5 percent decrease in multifactor productivity. 

Capital services grew 3.8 percent for the 1987-2009 period. Within capital services, equipment was the fastest 

growing component, averaging 5.9 percent. (See table 5.) The increase in equipment was largely due to capital 

services of information processing equipment and software, averaging 10.8 percent. The fastest growth in 

equipment was in computers and related equipment, which grew 20.8 percent. 

For the 2000-2007 period, within equipment, information processing equipment and software (IPES) grew 8.3 

percent annually. For the 2007-2009 period, IPES slowed to 5.6 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. 

Revised measures 

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 October 6, 2010 

http://www.bls.gov/news.release/archives/prod3_10062010.pdf. Revisions to underlying data affect multifactor 

productivity growth rates in both 2008 and 2009. (See table C.) For 2008, the 1.0 percent decline in multifactor 

productivity growth for the private nonfarm business sector was lower than the 0.1 percent increase reported on 

October 6, 2010. This downward revision in multifactor productivity growth was largely due to output being 

revised down to a decline of 0.9 percent from a decline of 0.2 percent. For 2009, the 0.1 percent change in 

multifactor productivity growth for the private nonfarm business sector was also lower than the 0.7 percent 

change reported on October 6, 2010. The revision in multifactor productivity growth in 2009 was due to a 

revision in the labor composition estimate to account for more recently published data. The labor composition 

estimate, used in the labor input measure, was revised up to 0.9 percent from 0.3 percent. The MFP labor 

composition measure uses 2009 wages from the 2010 March supplement to the Current Population Survey (CPS) 

to determine weights across groups. In contrast, the preliminary MFP labor composition estimate assumes 

relative wages across groups remain constant between 2008 and 2009. 
- 3 - 

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

business and private business sectors for selected periods, 1987-2009 

In percent 

1987-

2009

1987-

1990

1990-

1995

1995-

2000

2000-

2007

2007-

2009

2008-

2009

Private nonfarm business1

Productivity

 Multifactor Productivity20.9 0.5 0.5 1.3 1.4 -0.5 0.1

 Output per hour of all persons 2.2 1.4 1.6 2.8 2.6 2.4 3.7

 Output per unit of capital services -0.9 -0.4 -0.4 -1.0 -0.5 -4.3 -4.7

Output 2.8 3.2 2.9 5.0 2.7 -2.4 -3.7

Inputs

 

 Combined inputs3

1.9 2.7 2.4 3.6 1.3 -1.9 -3.8

 Labor Input4

1.1 2.3 2.0 2.5 0.4 -3.9 -6.3

 Hours 0.6 1.7 1.3 2.2 0.1 -4.7 -7.1

 Labor composition5

0.5 0.6 0.7 0.3 0.3 0.8 0.9

 Capital services 3.8 3.6 3.3 6.0 3.2 2.0 1.1

Analytic ratio

 Capital services per hour of all 

 persons 3.2 1.9 1.9 3.8 3.2 6.9 8.8

Private business1

Productivity

 Multifactor Productivity21.0 0.6 0.4 1.5 1.5 -0.4 0.2

 Output per hour of all persons 2.3 1.6 1.5 2.9 2.7 2.4 3.7

 Output per unit of capital services -0.8 -0.4 -0.3 -0.7 -0.4 -4.1 -4.5

Output 2.9 3.2 2.8 5.0 2.7 -2.3 -3.6

Inputs

 

 Combined inputs31.9 2.6 2.4 3.4 1.2 -1.9 -3.8

 Labor Input41.0 2.1 2.0 2.3 0.3 -3.9 -6.3

 Hours 0.5 1.6 1.3 2.0 0.0 -4.6 -7.0

 Labor composition50.5 0.6 0.7 0.3 0.3 0.7 0.8

 Capital services 3.7 3.6 3.1 5.8 3.1 1.8 1.0

Analytic ratio

 Capital services per hour of all 

 persons 3.1 2.0 1.8 3.7 3.1 6.7 8.6

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 current dollar costs. 

4 Index of hours at work; 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, 1987-2009 

In percent 

1987-

2009

1987-

1990

1990-

1995

1995-

2000

2000-

2007

2007-

2009

2008-

2009

Private nonfarm business1

Output per hour of all persons 2.2 1.4 1.6 2.8 2.6 2.4 3.7

Contribution of capital intensity21.0 0.6 0.6 1.2 1.0 2.3 3.0

 Contribution of information 

 processing equipment and 

 software30.6 0.5 0.5 0.9 0.6 0.8 0.9

 Contribution of all

 other capital services 0.4 0.1 0.2 0.2 0.4 1.5 2.0

Contribution of labor composition40.3 0.4 0.5 0.2 0.2 0.5 0.6

Multifactor productivity5 0.9 0.5 0.5 1.3 1.4 -0.5 0.1

 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 2.4 3.7

Contribution of capital intensity21.0 0.6 0.6 1.2 1.0 2.3 2.9

 Contribution of information 

 processing equipment and 

 software30.6 0.5 0.4 0.9 0.5 0.8 0.9

 Contribution of all

 other capital services 0.4 0.2 0.1 0.3 0.4 1.5 2.0

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

Multifactor productivity51.0 0.6 0.4 1.5 1.5 -0.4 0.2

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. 
- 5 - 

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

private nonfarm business sector for the 1987-2009 period 

 

 Percent change from previous year

Multifactor Productivity

Year Preliminary Revised

1988 1.0 1.0

1989 0.1 0.0

1990 0.4 0.4

1991 -0.9 -1.0

1992 2.3 2.3

1993 0.3 0.3

1994 0.7 0.7

1995 0.0 0.0

1996 1.4 1.4

1997 0.6 0.6

1998 1.5 1.5

1999 1.6 1.7

2000 1.6 1.6

2001 0.7 0.7

2002 2.4 2.4

2003 2.5 2.4

2004 2.6 2.5

2005 1.0 1.1

2006 0.4 0.4

2007 0.5 0.4

2008 0.1 -1.0

2009 0.7 0.1

 
- 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 ownaccount 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 3, 2011 “Productivity and Costs” news release (USDL-11-0128). 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 services are combined using Tornqvist aggregation, employing 

weights that represent each component's share of total costs. The Tornqvist index uses changing 

weights; the share in each year is averaged with the preceding year’s share. Total costs are defined as 

the value of output less a portion of taxes on production and imports. Most taxes on production and 

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

remain in total costs. 
- 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. 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 are based on the 

revised National Income and Product Accounts (NIPA) data released by BEA on January 28, 2011. 

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 1987-20091 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 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 0.3 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 4.1

1999 3.3 -1.1 1.7 5.6 2.6 6.8 3.9 4.5

2000 3.4 -1.9 1.6 4.5 1.2 6.5 2.8 5.5

2001 3.1 -3.7 0.7 1.0 -1.6 4.9 0.3 7.1

2002 4.7 -1.4 2.4 1.9 -2.0 3.4 -0.4 6.1

2003 3.7 0.3 2.4 3.1 -0.4 2.8 0.6 3.4

2004 2.8 1.6 2.5 4.2 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 0.0 0.4 3.2 2.5 3.2 2.8 1.0

2007 1.7 -0.7 0.4 2.2 1.2 3.0 1.8 2.4

2008 1.1 -3.8 -1.0 -1.1 -1.5 2.8 -0.1 5.1

2009 3.7 -4.7 0.1 -3.7 -6.3 1.1 -3.8 8.8

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

Table 2. Private business sector: productivity and related measures for the 1987-2009

1 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 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 3.5 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 -1.2 -0.3 2.9 2.7 4.2 3.2 1.4

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 -0.9 1.9 5.6 2.4 6.6 3.7 4.5

2000 3.5 -1.7 1.7 4.6 1.2 6.3 2.8 5.3

2001 3.2 -3.6 0.8 0.9 -1.8 4.8 0.2 7.1

2002 4.6 -1.3 2.3 2.0 -1.9 3.3 -0.4 5.9

2003 3.9 0.5 2.6 3.1 -0.4 2.7 0.5 3.4

2004 2.9 1.6 2.6 4.2 1.1 2.5 1.6 1.3

2005 1.6 0.4 1.1 3.4 2.0 3.0 2.3 1.2

2006 1.0 0.2 0.5 3.1 2.4 2.9 2.6 0.8

2007 1.6 -0.8 0.3 2.1 1.2 2.9 1.8 2.4

2008 1.2 -3.6 -0.9 -0.9 -1.5 2.7 0.0 4.9

2009 3.7 -4.5 0.2 -3.6 -6.3 1.0 -3.8 8.6

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

Table 3. Private nonfarm business sector: indexes of productivity and related measures, 1987-20091

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 and 

capital

services6

Capital 

services 

per hour 

of all 

persons

1987 66.2 111.6 82.3 54.2 75.6 48.6 65.9 59.4

1988 67.3 112.6 83.2 56.7 78.2 50.4 68.2 59.8

1989 67.8 112.1 83.2 58.7 80.8 52.4 70.6 60.5

1990 69.1 110.2 83.5 59.6 80.8 54.1 71.4 62.8

1991 70.3 106.2 82.7 59.0 79.9 55.6 71.4 66.2

1992 73.1 107.8 84.6 61.3 80.7 56.9 72.4 67.8

1993 73.6 108.1 84.9 63.5 83.4 58.7 74.8 68.0

1994 74.3 109.3 85.5 66.5 86.9 60.8 77.8 68.0

1995 74.7 108.1 85.5 68.7 89.2 63.5 80.3 69.1

1996 76.6 107.7 86.7 71.7 91.1 66.6 82.7 71.1

1997 77.8 107.3 87.2 75.4 94.8 70.2 86.5 72.5

1998 80.1 106.1 88.5 79.3 97.1 74.7 89.6 75.5

1999 82.7 104.9 89.9 83.7 99.6 79.8 93.1 78.9

2000 85.5 102.9 91.4 87.5 100.8 85.0 95.7 83.2

2001 88.2 99.1 92.0 88.4 99.2 89.2 96.0 89.0

2002 92.3 97.7 94.2 90.1 97.2 92.2 95.6 94.5

2003 95.7 98.0 96.5 92.8 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 100.9 100.0 100.4 103.2 102.5 103.2 102.8 101.0

2007 102.6 99.2 100.8 105.5 103.8 106.3 104.6 103.4

2008 103.8 95.4 99.8 104.3 102.2 109.3 104.6 108.7

2009 107.6 90.9 99.9 100.5 95.8 110.5 100.6 118.3

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

Table 4. Private business sector: indexes of productivity and related measures, 1987-20091

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 and 

capital

services6

Capital 

services 

per hour 

of all 

persons

1987 65.4 109.1 81.3 54.2 76.4 49.6 66.6 59.9

1988 66.4 109.7 82.0 56.5 78.9 51.5 68.9 60.5

1989 67.1 109.5 82.2 58.6 81.5 53.5 71.3 61.3

1990 68.6 107.9 82.7 59.5 81.4 55.2 72.0 63.6

1991 69.7 104.2 81.9 59.0 80.6 56.7 72.1 66.9

1992 72.6 106.1 84.0 61.4 81.4 57.9 73.1 68.4

1993 73.0 106.3 84.1 63.4 83.9 59.7 75.4 68.7

1994 73.7 107.8 84.8 66.6 87.7 61.8 78.5 68.4

1995 73.8 106.4 84.5 68.5 90.0 64.3 81.0 69.3

1996 75.9 106.5 86.0 71.6 91.8 67.3 83.3 71.3

1997 77.3 106.4 86.7 75.3 95.4 70.8 86.9 72.6

1998 79.6 105.2 88.0 79.2 97.6 75.2 90.0 75.6

1999 82.4 104.2 89.6 83.6 99.9 80.2 93.3 79.0

2000 85.3 102.5 91.2 87.4 101.1 85.3 95.9 83.2

2001 88.0 98.8 91.8 88.2 99.3 89.3 96.1 89.1

2002 92.1 97.5 94.0 90.0 97.4 92.2 95.7 94.4

2003 95.6 98.0 96.5 92.8 97.0 94.7 96.2 97.6

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 101.0 100.2 100.5 103.1 102.4 102.9 102.6 100.8

2007 102.6 99.4 100.9 105.3 103.6 106.0 104.4 103.3

2008 103.8 95.8 99.9 104.3 102.1 108.8 104.4 108.3

2009 107.6 91.5 100.2 100.6 95.6 109.9 100.4 117.6

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

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 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, 1987-2009

In percent 

1987-

2009

1987-

1990

1990-

1995

1995-

2000

2000-

2007

2007-

2009

2008-

2009

All Assets 3.8 3.6 3.3 6.0 3.2 2.0 1.1

Equipment 5.9 4.9 5.1 10.0 5.1 2.6 1.5

 All Information Processing 

Equipment & Software (IPES) 10.8 11.0 9.6 17.8 8.3 5.6 5.0

Computers & related 

equipment 20.8 19.2 16.1 40.8 14.4 12.6 10.9

Software 12.2 17.8 13.4 16.8 8.2 4.4 3.9

Communication equipment 6.9 6.0 5.3 10.4 6.4 5.3 4.9

Other IPES 3.7 2.8 4.0 3.7 4.0 3.6 3.2

All other equipment 2.1 2.2 1.9 3.2 1.8 0.9 0.0

Structures 2.0 3.0 2.0 2.2 1.4 1.8 1.6

Residential rental capital 1.3 1.9 1.0 1.6 1.4 0.2 -0.1

Inventories 2.5 3.4 2.2 4.2 2.1 -1.2 -4.4

Land 1.6 1.9 1.3 1.7 1.3 2.3 1.1

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, 1987-2009 

In percent 

1987-

2009

1987-

1990

1990-

1995

1995-

2000

2000-

2007

2007-

2009

2008-

2009

All Assets 3.7 3.6 3.1 5.8 3.1 1.8 1.0

Equipment 5.8 4.6 4.9 9.8 5.1 2.6 1.6

All Information Processing 

Equipment &Software (IPES) 10.8 11.0 9.6 17.8 8.3 5.6 5.0

Computers & related 

equipment 20.8 19.2 16.1 40.8 14.4 12.6 10.9

Software 12.2 17.8 13.4 16.8 8.2 4.4 3.9

Communication equipment 6.9 6.0 5.3 10.4 6.4 5.3 4.9

Other IPES 3.8 2.9 4.0 3.7 4.0 3.6 3.2

All other equipment 2.0 2.2 1.8 3.0 1.8 0.9 -0.1

Structures 1.9 2.9 1.9 2.2 1.4 1.7 1.6

Residential rental capital 1.3 1.9 1.0 1.6 1.4 0.2 -0.1

Inventories 2.4 2.9 2.2 4.1 2.1 -1.2 -4.1

Land 1.4 3.2 1.1 1.3 1.0 1.4 0.4

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