Internet address: http://www.bls.gov/mfp USDL 05-114 

Historical, technical Tuesday, February 1, 2005 

information: (202) 691-5606 For Release: 10:00 AM EST 

Media contact: (202) 691-5902 

 

MULTIFACTOR PRODUCTIVITY TRENDS, 2002 

Private Business and Private Nonfarm Business 

From 2001 to 2002, multifactor productivity increased 1.9 percent in the private business 

sector and 2.0 percent in the private nonfarm business sector, the Bureau of Labor Statistics of 

the U.S. Department of Labor reported today. 

Multifactor productivity is designed to measure the joint influences of economic growth on 

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. 

Multifactor productivity in the private business and nonfarm business sectors showed the 

fastest rate of growth since 1992. The 2002 annual changes are summarized in table A, and 

further detail and historical measures are shown in tables 1 through 6. 

This is the last release of private business and nonfarm business productivity measures 

based on the Standard Industrial Classification (SIC) system. SIC-based multifactor 

productivity and related series through 2002 will remain available, but will no longer be updated. 

In the future, historical and new measures will be based on the North American Industrial 

Classification System (NAICS). 
2

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

productivity in the private business sector, 1948 to 2002 (1948=100)

50

100

150

200

250

300

350

400

1948 1953 1958 1963 1968 1973 1978 1983 1988 1993 1998

Year

Index

Multifactor productivity

Output per unit of capital

Output per hour of all persons

Chart 1 shows the annual indexes of multifactor productivity, output per hour worked, and 

output per unit of capital services for the 1948-2002 period for private business. Over the last 55 

years, capital services have grown more rapidly than hours in the private business sector, and the 

skills of workers as measured by their education and work experience also have risen over this 

period. These shifts toward more capital intensive production and workers with more human 

capital have supplemented multifactor productivity growth, usually allowing output per hour to 

grow at a faster rate than multifactor productivity. 

Private business and private nonfarm business 

In private business and private nonfarm business, the change in multifactor productivity 

reflects the difference between the change in real gross domestic product for the sector and the 

change in labor and capital inputs engaged in the production of this output. The output measures 

for private business and private nonfarm business are similar to the indexes of output for 

business and nonfarm business used in the quarterly labor productivity measures, but the output 

of government enterprises is omitted.

A change in multifactor productivity reflects the change in output that cannot be accounted 

for by the change in combined inputs of labor and capital. In contrast, a change in labor 

productivity reflects the change in output that cannot be accounted for by the change in hours of 

all persons engaged in production. 

Changes in 2001-2002 

Private business sector 

Multifactor productivity rose 1.9 percent in 2002, the largest rate of increase since 1992. 

The multifactor productivity gain in 2002 reflected a 1.9 percent increase in output while the 

combined inputs of capital and labor remained unchanged. In comparison, in 2001, multifactor 

productivity increased by 0.1 percent as both output and combined inputs increased by 0.4 

percent. 
3

In 2002, growth in capital services slowed to 2.7 percent, down from the 4.2 percent 

increase in 2001. The 1.3 percent drop in labor input in 2002 is about unchanged from the 

decline of 1.4 percent in 2001. It is the second straight year of declining labor input. The 

capital-labor ratio (capital services per hour of all persons) typically grows rapidly when hours 

fall. In 2002, the capital-labor ratio grew more rapidly than any other year since 1982, at an 

annual rate of 5.3 percent. The exception is 2001, when the capital-labor ratio grew at an annual 

rate of 6.6 percent. 

Among the broad categories of capital assets, equipment grew more rapidly than other 

assets (see table 5). Within equipment, information processing equipment and software 

continued to increase sharply in 2002. However, these rates are markedly slower than in the 

1995-2000 period. The largest increase in equipment growth continues to be in computers and 

related equipment, 21.3 percent. Structures and land continued to grow in 2002 at rates similar 

to recent years. Inventories, however, declined in 2002. 

Labor input reflects the change in hours at work, adjusted for the effects of changing labor 

composition. Hours fell 2.5 percent in 2002, the second consecutive year that hours declined. 

Employment declined 2.2 percent in 2002 after dipping 0.8 percent in 2001. The work week 

declined slightly for the third year in a row. Changes in labor composition, as measured by shifts 

in the educational attainment and work experience of the work force, jumped 1.2 percent in 2002 

(see “Changes in the Composition of Labor for the BLS Multifactor Productivity Measures, 

2002”, available at http://www.bls.gov/mfp/mprlab02.pdf) . This was the largest increase since 

1992. Labor input fell because the decline in both employment and the work week exceeded the 

sharp increase in labor composition. 

Table A. Productivity and related data, percent changes 2001-02 

Private 

Business1

Private Nonfarm 

Business1

Productivity

 Multifactor Productivity

2 1.9 2.0

 Output per hour of all persons 4.5 4.5

 Output per unit of capital services -0.8 -0.9

Output 1.9 1.8

Inputs

 Labor input

3 -1.3 -1.5

 Hours -2.5 -2.5

 Labor Composition4 1.2 1.1

 Capital services 2.7 2.8

 Combined units of labor and capital inputs5 0.0 -0.1

Analytic ratio:

 Capital services per hour of all persons 5.3 5.5

1. Excludes government enterprises. 

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

3. Index of hours at work; hours at work by education and experience group are weighted by 

 each group’s share of labor compensation. 

4. Ratio of labor input to hours. 

5. Labor input index combined with capital service input index, weighted by labor's and capital's 

 shares of nominal output.
4

Labor productivity (output per hour worked) increased 4.5 percent in 2002. This was the 

largest increase since 1964 and included a 2.5 percent decline in hours at work. Capital 

productivity (output per unit of capital services) fell 0.8 percent, the smallest decline since 1999. 

Private nonfarm business

Multifactor productivity in the private nonfarm business sector rose 2.0 percent in 2002, 

the largest rate of growth since 1992. Output increased 1.8 percent, and the growth of combined 

units of capital and labor inputs declined 0.1 percent. In comparison, in 2001, multifactor 

productivity showed no growth as output and combined inputs both rose 0.5 percent. 

Labor input declined 1.5 percent in 2002, the second consecutive drop. As in the private 

business sector, the slow growth of labor input was due to a decline in hours at work that was 

partially offset by a strong positive contribution from labor composition (see table A). Capital 

services increased 2.8 percent, growth slowed for the fourth consecutive year. The fastest 

growing component of capital services was equipment. The 4.9 percent growth rate, however, 

was the slowest since 1993. Capital services of information processing equipment and software 

rose by 10.0 percent in 2002, also the slowest rate of growth since 1993. As in previous years, 

the fastest increase was in computers and related equipment with a growth rate of 21.3 percent. 

Labor productivity grew 4.5 percent in 2002, and capital productivity dipped 0.9 percent. 

The decline in capital productivity was the smallest since 1999. In 2002, capital services per 

hour increased at the historically rapid rate of 5.5 percent. 

Long-term trends in private business and private nonfarm business 

Labor productivity (output per hour worked) differs from multifactor productivity (output 

per unit of combined capital and labor inputs) in the treatment of both capital and hours. Labor 

productivity measures do not explicitly account for the effects of capital or of changes in the 

composition of labor on output growth. As a result, changes in capital intensity (the capitalhours ratio) and labor composition can influence labor productivity growth. In contrast, 

multifactor productivity treats capital as an explicit factor of production and, therefore, is net of 

changes in capital intensity. In addition, the labor input measure used to calculate multifactor 

productivity reflects the combined effects of changes in hours at work and of shifts in the 

educational attainment and experience of the work force. Therefore, multifactor productivity 

accounts for changes in labor composition as well. Long-term 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 (see table B). 
5

The contribution of capital intensity equals the change in the capital-hours ratio multiplied 

by capital's share of total payments to inputs. The contribution of labor composition equals the 

difference between the growth rate of labor input and the growth rate of hours multiplied by 

labor's share of total payments. Historically, capital's share has been slightly less than a third of 

total payments. 

Private Business and Nonfarm Business Sectors 

The trends of the various measures in the private nonfarm business sector were similar to 

those in the private business sector in each period. Therefore, the patterns of productivity 

slowdowns after 1973 and rebounds after 1995 correspond closely in the two sectors. The 

description that follows focuses exclusively on the private business sector. 

Over the entire 1948-2002 period, output per hour worked grew at an annual rate of 2.5 

percent in private business (see table B). Of the 2.5 percent growth rate in labor productivity, 1.4 

percent can be attributed to increases in multifactor productivity, 0.9 percent to the contribution 

of capital intensity, and 0.2 percent to changes in labor composition. The contribution of capital 

intensity is composed of the contribution of information processing equipment and software (0.3 

percent) and of the contribution of all other types of capital (0.5 percent). Information 

processing equipment and software includes computers and related equipment, communications 

equipment, instruments and photocopying equipment, and software. Investment in these forms 

of capital was small prior to 1973 but since then has increased its share in total investment. 

During the 1948-73 period, labor productivity, or output per hour worked, in private 

business grew 3.3 percent per year, faster than the average rate for the entire 1948-2002 period. 

This reflected strong growth in multifactor productivity (2.1 percent), combined with average 

contributions of capital intensity (0.9 percent) and labor composition (0.2 percent). 

After 1973, productivity growth slowed (see table B). From 1973 to 1990, labor 

productivity increased at an annual average rate of 1.5 percent, much slower than the growth rate 

of 3.3 percent during the previous period. Gains in multifactor productivity dropped to only 0.5 

percent, much lower than the 2.1 percent rate during the 1948-73 period. The contribution of 

capital intensity remained nearly stable at 0.8 percent in the 1973-90 period, as information 

processing equipment and software began to play an increasingly important role. As a result, 

labor productivity growth from 1973-90 was nearly half that of the 1948-73 period, reflecting the 

much slower growth in multifactor productivity. 

From 1990 to 1995, labor productivity advanced at an annual rate of 1.5 percent, the 

same rate as during the 1973-90 period. Small increases in the rates of growth in multifactor 

productivity and in the contribution of labor composition were offset by a decline in the 

contribution of capital intensity, from 0.8 percent in 1973-90 to 0.4 percent in 1990-95. 

Information processing capital continued growing in importance, contributing all the increase in 

capital intensity in the latter period. 
6

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

contributions of capital intensity, labor composition, and multifactor productivity, by major 

sector, 1948 to 2002 

(percent per year) 

1948-02 1948-73 1973-90 1990-95 1995-00 2000-02 2001-02

Private business1

Output per hour of all persons 2.5 3.3 1.5 1.5 2.7 3.6 4.5 

Contribution of capital intensity2 0.9 0.9 0.8 0.4 1.1 1.8 1.7 

 Contribution of information 

 processing equipment and 

 software3

0.3 0.1 0.4 0.4 0.9 0.9 0.8 

 Contribution of all 

 other capital services 

0.5 0.8 0.3 0.0 0.2 0.9 0.8 

Contribution of labor composition4 0.2 0.2 0.2 0.4 0.3 0.7 0.8 

Multifactor productivity5 1.4 2.1 0.5 0.7 1.3 1.0 1.9 

Private nonfarm business1

Output per hour of all persons 2.3 2.9 1.4 1.6 2.5 3.6 4.5 

Contribution of capital intensity2 0.9 0.8 0.8 0.5 1.1 1.8 1.7 

 Contribution of information 

 processing equipment and 

 software3

0.3 0.1 0.4 0.4 0.9 0.9 0.8 

 Contribution of all 

 other capital services 

0.5 0.7 0.4 0.0 0.2 0.9 0.9 

Contribution of labor composition4 0.2 0.2 0.2 0.4 0.3 0.7 0.8 

Multifactor productivity5 1.2 1.9 0.4 0.7 1.1 1.0 2.0 

 Contribution of R&D to 

 multifactor productivity 

0.2 0.2 0.2 0.2 0.2 0.3 0.3 

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 total 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. 

Note: 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. 
7

From 1995 to 2000, output per hour worked rebounded to a 2.7 percent growth rate per 

year, 1.2 percentage points more than during the 1990-95 period. Half of this acceleration can be 

attributed to faster multifactor productivity growth, which almost doubled from 0.7 percent to 1.3 

percent per year. The remainder of the increase was due to a rise in the contribution of capital 

intensity, from 0.4 percent to 1.1 percent with information processing capital accounting for a 

predominant part of this increase. This continued the trend in the substitution of information 

processing equipment and software for other forms of capital seen in earlier periods. 

From 2000 to 2002, output per hour worked rose rapidly at an annual rate of 3.6 percent. 

The contribution of capital intensity accounted for most of this faster growth, although labor 

composition added to output per hour growth. Capital intensity grew 1.8 percent, up from the 

1.1 percent rate during the 1995-2000 period. Information processing equipment and software 

contributed about half of the growth of capital services. All other capital services contributed the 

other half, posting a substantial increase from 0.2 percent in 1995-2000 to 0.9 percent in 2000-

02. The contribution of labor composition increased from 0.3 percent in 1995-2000 to 0.7 

percent in 2000-02. Only multifactor productivity reduced its contribution to output per hour 

worked, slowing from an annual growth rate of 1.3 percent in 1995-2000 to an annual growth 

rate of 1.0 percent in 2000-02. 

Contribution of research and development to multifactor productivity in private nonfarm 

business 

While multifactor productivity reflects many influences, technological change is one of the 

primary contributors. For private nonfarm business, BLS also reports estimates of the impact on 

multifactor productivity growth of firms' spending for research and development (R&D) on all 

firms within the same industries. Because many people associate research and development 

spending and the resulting technological improvements with productivity, multifactor 

productivity has not been adjusted to exclude the effects of research and development. The 

contribution of research and development averaged 0.2 percent per year for the entire 1948-2002 

period, or about 17 percent of total multifactor productivity growth (see table B). The 

contribution of research and development varied little over time, contributing 0.2 percent per 

year during the 1948-73 period, 0.2 percent during the 1973-90 period, 0.2 percent for the 1990-

95 and 1995-2000 periods, and 0.3 percent in the 2000-02 period. 
8

Revisions 

Private business and private nonfarm business output series reflect the annual revisions to 

the National Income and Product Accounts (NIPA), announced by the Bureau of Economic 

Analysis (BEA) in October 2004. 

Hours at work measures for production and nonsupervisory workers in nonagricultural 

establishments were revised to reflect new measures of hours at work to hours paid ratios. 

Average weekly paid hours prior to 2001 were adjusted to hours at work using the ratio of hours 

at work to hours paid derived from the Hours at Work Survey. After the discontinuation of the 

Hours at Work Survey following the collection of data for 2000, new ratios of hours at work to 

hours paid based on data collected from the National Compensation Survey (NCS) now extend 

the series beyond 2000. A description of the hours at work to hours paid ratio derived from the 

National Compensation Survey titled “A Note on the Incorporation of Hours-Worked HoursPaid Ratios from the Employment Index into Hours at Work Measures” can be found at 

http://www.bls.gov/lpc/lprhws/lprhwhp.pdf. 

New estimates of average weekly hours at work for nonproduction and supervisory 

workers developed using information from the Current Population Survey (CPS) together with 

information from the Current Employment Statistics (CES) program, and the NCS have been 

incorporated. A description of the methodology used in calculating these average weekly hours 

titled “Construction of Average Weekly Hours for Supervisory and Nonproduction Wage and 

Salary Workers in Private Nonfarm Establishments” can be located at 

http://www.bls.gov/lpc/lprswawhtech.pdf. 

Labor composition measures have been updated through 2002. A brief description, 

“Changes in the Composition of Labor for the BLS Multifactor Productivity Measures, 2002” is 

available at http://www.bls.gov/mfp/mprlab02.pdf. 

Comprehensive tables containing additional data beyond the scope of this press release are 

available at http://www.bls.gov/mfp/mprdload.htm or in print upon request. 

Summary of Methods 

The following note describes the major data sources and the procedures used in deriving 

BLS multifactor productivity indexes. More detailed information on methods, limitations, and 

data sources is provided in BLS Bulletin 2178 (September 1983), "Trends in Multifactor 

Productivity, 1948-81." Additional data not contained in the release can be obtained in print or at 

http://www.bls.gov/mfp. 
9

This release presents data for the private business and private nonfarm business sectors. 

The private business sector, which accounted for approximately 78 percent of gross domestic 

product in 2000, 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 includes them. 

 

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 1948 to 2002, BEA supplies the output indexes. BLS adjusts these to 

eliminate the output of government enterprises. 

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, video displays, and 

other related equipment. Software is comprised of pre-packaged, custom, and own-account 

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

scientific and related equipment, photocopying and related equipment, and office and accounting 

equipment. Structures include nonresidential structures and residential capital that is 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 53 SIC industries 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. Data on investments in physical assets 

are obtained from BEA. Current-dollar gross product originating (GPO) data, obtained from 

BEA, are used in estimating capital rental prices. 

 
10

Labor input in private business and private nonfarm business is obtained by Tornqvistaggregation of the hours at work by all persons, classified by education, work experience, and 

gender with weights determined by their shares of labor compensation. Hours paid of employees 

are largely obtained from 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 and the Hours at Work Survey. The hours at work of proprietors, unpaid family workers, 

and farm employees are derived from the Current Population Survey. Hours at work for 

nonproduction and supervisory workers are derived using data from the CPS, the CES, and the 

NCS. 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 BLS 

Bulletin 2426 (December 1993), "Labor Composition and U.S. Productivity Growth, 1948-90." 

The labor and capital components of the input indexes are combined with Tornqvist 

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 indirect business taxes. Most indirect 

taxes, 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. 

GPO data by SIC industry are not available for 2002. These data are needed to calculate 

rental prices for each asset in every industry. Rental prices for 2001 are used to calculate 2002 

capital income shares for each asset. In addition, while aggregate hours are available for 2002 

and used in the measurement of labor input by major sector, hours at work are unavailable by 

SIC industry for 2002. These data are needed to apportion proprietor’s income into capital and 

labor costs so that aggregate capital and labor shares can be calculated. Proprietor’s 

compensation for 2002 is extrapolated by assuming that the growth in proprietor’s compensation 

is the same as the growth in employee’s compensation per hour. 

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 1953-2002 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." 
11

Table 1. Private business sector: Productivity and related measures, 1948-20021

Indexes 2000=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 

1948 27.8 110.9 48.7 15.2 45.9 13.7 31.2 25.1 

1949 28.8 107.7 49.3 15.2 44.4 14.1 30.8 26.7 

1950 31.3 114.5 52.9 16.7 45.2 14.6 31.6 27.4 

1955 36.6 117.9 58.5 20.3 48.2 17.3 34.8 31.0 

1960 40.8 113.6 61.6 22.5 48.5 19.8 36.5 35.9 

1965 50.0 125.1 72.1 29.1 52.1 23.3 40.4 40.0 

1966 52.1 126.5 74.3 31.1 53.5 24.6 41.8 41.2 

1967 53.2 121.8 74.5 31.7 53.4 26.0 42.5 43.7 

1968 54.9 122.7 76.4 33.3 54.2 27.1 43.6 44.8 

1969 55.2 120.8 76.1 34.3 55.8 28.4 45.1 45.7 

1970 56.4 115.6 76.0 34.3 54.8 29.7 45.1 48.8 

1971 58.9 115.4 78.4 35.6 54.4 30.9 45.4 51.0 

1972 60.7 118.3 80.6 37.9 56.2 32.1 47.0 51.3 

1973 62.7 119.9 82.9 40.6 58.2 33.9 49.0 52.3 

1974 61.7 112.3 80.0 40.0 58.6 35.6 50.0 55.0 

1975 63.9 107.5 80.8 39.6 56.0 36.9 49.0 59.5 

1976 66.1 111.3 83.8 42.3 57.7 38.0 50.4 59.4 

1977 67.2 113.4 85.2 44.6 60.0 39.4 52.4 59.2 

1978 67.9 115.6 86.3 47.4 63.1 41.1 55.0 58.8 

1979 67.9 113.5 86.0 49.0 65.0 43.2 57.0 59.9 

1980 67.8 106.6 84.1 48.5 64.6 45.5 57.7 63.6 

1981 69.2 104.4 84.3 49.8 65.6 47.8 59.1 66.3 

1982 68.8 97.2 81.5 48.4 64.7 49.8 59.4 70.7 

1983 71.2 99.5 83.8 51.0 66.1 51.2 60.8 71.6 

1984 73.2 103.2 86.4 55.5 70.1 53.8 64.3 71.0 

1985 74.9 102.9 87.5 58.1 71.8 56.5 66.4 72.8 

1986 77.3 102.4 88.9 60.3 72.7 58.9 67.9 75.5 

1987 77.7 102.4 89.1 62.5 75.0 61.0 70.1 75.9 

1988 78.9 103.4 89.8 65.2 77.7 63.0 72.6 76.3 

1989 79.7 103.9 90.3 67.6 80.2 65.0 74.9 76.7 

1990 81.4 102.6 90.9 68.6 80.1 66.9 75.5 79.3 

1991 82.7 99.7 90.3 68.1 79.1 68.4 75.4 83.0 

1992 86.2 101.7 92.7 70.9 80.0 69.7 76.5 84.8 

1993 86.5 102.6 93.1 73.2 82.4 71.3 78.6 84.4 

1994 87.5 104.5 94.1 76.9 86.1 73.5 81.7 83.7 

1995 87.7 103.6 93.8 79.1 88.5 76.4 84.3 84.6 

1996 90.3 103.9 95.5 82.8 90.4 79.7 86.7 86.9 

1997 91.9 104.1 96.3 87.2 94.0 83.8 90.5 88.3 

1998 94.4 102.6 97.4 91.5 96.2 89.2 93.9 92.0 

1999 97.2 101.8 98.7 96.2 99.0 94.5 97.5 95.4 

2000 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 

2001 102.7 96.3 100.1 100.4 98.6 104.2 100.4 106.6 

2002 107.2 95.5 102.0 102.3 97.4 107.1 100.3 112.2 

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

Table 2. Private nonfarm business sector: Productivity and related measures, 1948-20021

Indexes 2000=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 

 

1948 31.5 124.1 53.7 14.7 39.6 11.8 27.3 25.4 

1949 32.9 120.5 54.8 14.7 38.0 12.2 26.8 27.3 

1950 35.1 127.4 58.1 16.1 39.3 12.7 27.8 27.5 

1955 40.0 131.7 63.2 20.0 43.7 15.2 31.6 30.4 

1960 43.6 126.0 65.8 22.2 45.1 17.7 33.8 34.6 

1965 52.5 137.1 75.7 29.0 49.8 21.2 38.3 38.3 

1966 54.4 138.5 77.9 31.1 51.4 22.5 39.9 39.3 

1967 55.4 132.9 77.9 31.6 51.4 23.8 40.6 41.6 

1968 57.1 133.8 79.8 33.3 52.3 24.9 41.7 42.7 

1969 57.2 131.1 79.2 34.3 54.0 26.2 43.3 43.6 

1970 58.1 124.9 78.8 34.3 53.3 27.5 43.5 46.5 

1971 60.6 124.4 81.2 35.6 53.0 28.6 43.8 48.7 

1972 62.5 127.2 83.6 38.0 54.8 29.9 45.5 49.1 

1973 64.5 129.3 86.0 40.8 56.9 31.6 47.5 49.9 

1974 63.6 120.8 83.1 40.2 57.3 33.3 48.4 52.6 

1975 65.4 114.3 83.3 39.5 54.7 34.6 47.4 57.2 

1976 67.7 118.6 86.5 42.3 56.4 35.7 48.9 57.1 

1977 68.7 120.6 87.8 44.7 58.8 37.1 50.9 56.9 

1978 69.6 122.9 89.1 47.7 61.9 38.8 53.5 56.6 

1979 69.4 120.2 88.5 49.2 63.9 40.9 55.6 57.7 

1980 69.2 112.7 86.5 48.7 63.5 43.2 56.3 61.4 

1981 70.2 109.2 86.1 49.7 64.5 45.5 57.7 64.3 

1982 69.6 101.2 83.0 48.1 63.7 47.6 58.0 68.8 

1983 72.8 103.9 86.1 51.3 65.1 49.4 59.6 70.0 

1984 74.3 107.2 88.2 55.6 69.1 51.9 63.1 69.3 

1985 75.5 106.1 88.7 58.0 71.1 54.7 65.4 71.2 

1986 77.9 105.2 90.0 60.3 72.1 57.3 66.9 74.0 

1987 78.2 104.7 90.0 62.4 74.5 59.6 69.3 74.7 

1988 79.6 105.7 90.9 65.3 77.3 61.8 71.9 75.2 

1989 80.1 105.9 91.1 67.6 79.8 63.9 74.3 75.7 

1990 81.7 104.2 91.5 68.6 79.8 65.8 75.0 78.4 

1991 83.1 101.1 91.0 68.1 78.7 67.4 74.8 82.3 

1992 86.5 102.8 93.2 70.8 79.6 68.8 75.9 84.1 

1993 86.9 103.8 93.6 73.2 82.2 70.6 78.2 83.7 

1994 87.9 105.4 94.5 76.7 85.6 72.8 81.2 83.3 

1995 88.4 104.7 94.6 79.3 88.0 75.7 83.8 84.4 

1996 90.8 104.7 96.0 82.9 90.0 79.2 86.3 86.7 

1997 92.2 104.6 96.6 87.2 93.7 83.3 90.2 88.2 

1998 94.7 103.0 97.7 91.5 96.0 88.8 93.7 91.9 

1999 97.3 102.1 98.8 96.3 99.0 94.3 97.5 95.3 

2000 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 

2001 102.6 96.3 100.0 100.5 98.8 104.4 100.5 106.6 

2002 107.2 95.4 102.0 102.4 97.3 107.3 100.3 112.4 

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

 Table 3. Private business sector: Productivity and related measures, 1949-2002 

Percent Change 

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 

1949 3.5 -2.9 1.2 -0.2 -3.3 2.8 -1.4 6.5 

1950 8.8 6.3 7.4 10.1 2.0 3.6 2.5 2.3 

1955 4.6 5.0 4.6 8.5 3.9 3.4 3.7 -0.3 

1960 1.9 -0.9 0.6 1.9 0.5 2.8 1.2 2.8 

1965 3.6 2.3 3.3 7.1 3.2 4.6 3.7 1.2 

1966 4.1 1.1 3.1 6.8 2.6 5.6 3.6 2.9 

1967 2.3 -3.7 0.2 1.9 -0.2 5.8 1.7 6.2 

1968 3.2 0.8 2.5 5.1 1.6 4.2 2.4 2.4 

1969 0.5 -1.6 -0.4 3.1 2.9 4.7 3.5 2.1 

1970 2.2 -4.3 -0.2 0.0 -1.7 4.5 0.1 6.8 

1971 4.4 -0.2 3.2 3.9 -0.8 4.1 0.7 4.6 

1972 3.1 2.5 2.9 6.5 3.4 3.9 3.6 0.6 

1973 3.2 1.4 2.8 7.1 3.5 5.6 4.2 1.9 

1974 -1.5 -6.3 -3.4 -1.5 0.7 5.2 2.0 5.2 

1975 3.6 -4.3 1.0 -1.0 -4.4 3.4 -2.0 8.2 

1976 3.4 3.5 3.6 6.7 2.9 3.0 2.9 -0.1 

1977 1.6 1.9 1.7 5.6 4.0 3.7 3.9 -0.3 

1978 1.2 1.9 1.3 6.3 5.2 4.3 4.9 -0.8 

1979 0.0 -1.8 -0.4 3.4 3.0 5.3 3.7 1.9 

1980 -0.2 -6.0 -2.3 -1.2 -0.6 5.2 1.1 6.2 

1981 2.1 -2.1 0.3 2.8 1.5 5.1 2.6 4.3 

1982 -0.6 -6.8 -3.3 -2.9 -1.4 4.2 0.4 6.7 

1983 3.6 2.4 2.9 5.4 2.2 2.9 2.4 1.2 

1984 2.8 3.6 3.0 8.8 6.0 5.0 5.7 -0.8 

1985 2.3 -0.3 1.3 4.7 2.6 5.0 3.3 2.6 

1986 3.1 -0.5 1.6 3.8 1.2 4.3 2.2 3.6 

1987 0.6 0.0 0.2 3.6 3.2 3.6 3.3 0.6 

1988 1.6 1.0 0.9 4.4 3.6 3.3 3.5 0.5 

1989 0.9 0.4 0.5 3.7 3.1 3.2 3.2 0.5 

1990 2.1 -1.3 0.6 1.5 0.0 2.9 0.9 3.4 

1991 1.7 -2.8 -0.6 -0.7 -1.2 2.2 -0.2 4.6 

1992 4.2 2.0 2.6 4.1 1.1 2.0 1.4 2.1 

1993 0.4 0.9 0.4 3.2 3.0 2.3 2.8 -0.5 

1994 1.1 1.9 1.0 5.0 4.4 3.1 4.0 -0.7 

1995 0.2 -0.9 -0.2 3.0 2.8 3.9 3.2 1.1 

1996 2.9 0.3 1.7 4.7 2.1 4.4 2.9 2.7 

1997 1.8 0.2 0.9 5.3 4.0 5.1 4.4 1.6 

1998 2.7 -1.4 1.1 4.9 2.4 6.4 3.7 4.2 

1999 2.9 -0.8 1.3 5.2 2.9 6.0 3.9 3.7 

2000 2.9 -1.8 1.4 3.9 1.0 5.8 2.5 4.8 

2001 2.7 -3.7 0.1 0.4 -1.4 4.2 0.4 6.6 

2002 4.5 -0.8 1.9 1.9 -1.3 2.7 0.0 5.3 

See footnotes following table 4. Source: Bureau of Labor Statistics 
14

Table 4. Private nonfarm business sector: Productivity and related measures, 1949-2002 

Percent Change 

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 

1949 4.5 -2.9 1.9 0.0 -4.2 2.9 -2.0 7.6 

1950 6.7 5.7 6.1 10.0 3.6 4.1 3.7 0.9 

1955 4.7 5.0 4.6 8.9 4.2 3.7 4.1 -0.3 

1960 1.3 -1.4 0.5 1.7 0.4 3.1 1.2 2.7 

1965 3.1 2.0 2.8 7.1 3.7 5.0 4.1 1.1 

1966 3.5 1.0 2.8 7.1 3.3 6.1 4.2 2.4 

1967 1.8 -4.0 0.0 1.7 -0.2 5.9 1.7 6.1 

1968 3.1 0.7 2.6 5.3 1.8 4.6 2.7 2.5 

1969 0.2 -2.0 -0.8 3.0 3.3 5.2 3.9 2.2 

1970 1.6 -4.8 -0.6 -0.1 -1.3 4.9 0.5 6.7 

1971 4.2 -0.3 3.1 3.8 -0.7 4.2 0.7 4.6 

1972 3.2 2.2 2.9 6.8 3.4 4.5 3.7 0.9 

1973 3.2 1.6 2.9 7.4 3.9 5.7 4.4 1.6 

1974 -1.4 -6.6 -3.4 -1.4 0.6 5.5 2.0 5.5 

1975 2.8 -5.4 0.3 -1.7 -4.4 3.9 -2.0 8.6 

1976 3.5 3.8 3.8 7.1 3.1 3.2 3.1 -0.2 

1977 1.5 1.7 1.5 5.7 4.2 3.9 4.1 -0.2 

1978 1.3 1.9 1.5 6.6 5.2 4.6 5.0 -0.5 

1979 -0.3 -2.2 -0.7 3.2 3.2 5.5 3.9 1.9 

1980 -0.2 -6.2 -2.3 -1.1 -0.5 5.5 1.2 6.4 

1981 1.4 -3.1 -0.5 2.2 1.5 5.4 2.6 4.7 

1982 -0.9 -7.4 -3.6 -3.1 -1.3 4.6 0.5 7.0 

1983 4.6 2.7 3.7 6.6 2.3 3.8 2.7 1.8 

1984 2.1 3.2 2.4 8.3 6.2 5.0 5.8 -1.0 

1985 1.6 -1.0 0.6 4.3 2.9 5.4 3.7 2.7 

1986 3.1 -0.8 1.5 3.9 1.3 4.8 2.4 4.0 

1987 0.5 -0.5 0.0 3.6 3.3 4.1 3.6 1.0 

1988 1.7 1.0 0.9 4.6 3.7 3.6 3.7 0.7 

1989 0.7 0.1 0.2 3.5 3.2 3.4 3.3 0.6 

1990 2.0 -1.6 0.5 1.5 0.0 3.1 1.0 3.6 

1991 1.8 -3.0 -0.5 -0.8 -1.4 2.3 -0.3 5.0 

1992 4.0 1.7 2.4 3.9 1.2 2.1 1.5 2.2 

1993 0.5 0.9 0.4 3.5 3.3 2.5 3.0 -0.5 

1994 1.1 1.6 0.9 4.8 4.1 3.2 3.8 -0.4 

1995 0.6 -0.7 0.1 3.3 2.8 4.0 3.2 1.3 

1996 2.7 0.0 1.5 4.5 2.2 4.5 3.0 2.7 

1997 1.6 -0.1 0.7 5.2 4.1 5.3 4.5 1.7 

1998 2.7 -1.5 1.1 5.0 2.5 6.6 3.8 4.2 

1999 2.8 -0.9 1.1 5.2 3.1 6.2 4.1 3.7 

2000 2.8 -2.1 1.2 3.8 1.1 6.0 2.6 4.9 

2001 2.6 -3.7 0.0 0.5 -1.2 4.4 0.5 6.6 

2002 4.5 -0.9 2.0 1.8 -1.5 2.8 -0.1 5.5 

See footnotes following table 4. Source: Bureau of Labor Statistics 
15

Footnotes, Tables 1-4 

Source: Output data are from the Bureau of Economic Analysis (BEA), U.S. Department of 

Commerce, and are modified by the Bureau of Labor Statistics (BLS), U.S. Department of Labor. 

Compensation and hours data are from BLS. Capital measures are based on data supplied by BEA and 

the U.S. Department of Agriculture. Also see Summary of Methods 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 education, work experience, and gender. This superlative chain 

index is computed by combining changes in the hours of each education, experience, 

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. 

(6) Labor input combined with capital input, using labor's and capital's shares 

of costs as weights to form a superlative chained index. 
16

Table 5. Real capital services by asset type, private business, 1948-2002 

Average annual growth rates (percent) 

1948-2002 1948-1973 1973-1990 1990-95 1995-00 2000-02 2001-02 

All Assets 3.9 3.7 4.1 2.7 5.5 3.5 2.7 

 Equipment 6.0 5.4 6.3 4.4 9.5 6.2 4.9 

 All Information 

 Processing 

 Equipment & 

 Software (IPES) 11.8 8.9 15.1 9.4 18.1 12.1 10.0 

 Computers & 

 related 

 equipment 25.6 14.4 41.9 16.6 42.6 24.8 21.3 

 Software 17.9 19.9 17.0 14.8 17.3 8.9 6.1 

 Communication 

 equipment 8.5 9.1 8.1 4.9 9.8 10.1 8.4 

 Other IPES 6.4 6.8 8.1 3.2 3.9 3.3 3.5 

 All other 

 equipment 3.7 4.8 2.9 1.2 4.0 1.8 0.8 

 Structures 3.0 3.2 3.5 1.8 2.1 1.7 1.5 

 Residential rental 

 capital 2.2 2.8 2.1 0.9 1.5 1.4 1.3 

 Inventories 3.4 4.2 2.6 2.6 4.8 -1.7 -3.5 

 Land 1.6 1.8 1.7 0.3 1.2 0.9 1.1 

Source: Bureau of Labor Statistics 

Note: For a brief discussion of methods used in preparing these data, see Summary of Methods in this release. 
17

Table 6. Real capital services by asset type, private nonfarm business, 1948-2002 

Average annual growth rates (percent) 

1948-2002 1948-1973 1973-90 1990-95 1995-00 2000-02 2001-02 

All Assets 4.2 4.0 4.4 2.8 5.7 3.6 2.8 

 Equipment 6.1 5.5 6.6 4.6 9.7 6.2 4.9 

 All Information 

 Processing 

 Equipment & 

 Software (IPES) 11.8 8.9 15.1 9.4 18.1 12.1 10.0 

 Computers & 

 related 

 equipment 25.6 14.4 41.9 16.5 42.6 24.8 21.3 

 Software 17.9 19.9 17.0 14.8 17.3 8.9 6.1 

 Communication 

 equipment 8.5 9.1 8.1 4.9 9.8 10.1 8.4 

 Other IPES 6.4 6.8 8.1 3.2 3.9 3.3 3.5 

 All other 

 equipment 3.8 4.9 3.1 1.4 4.1 1.8 0.8 

 Structures 3.1 3.3 3.5 1.9 2.2 1.7 1.5 

 Residential rental 

 capital 2.2 2.8 2.1 0.9 1.5 1.4 1.3 

 Inventories 3.6 4.5 2.8 2.6 4.9 -1.7 -3.6 

 Land 2.4 2.8 2.7 0.4 1.4 1.1 1.4 

Source: Bureau of Labor Statistics 

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