Internet address: http://www.bls.gov      USDL 07-0283
Technical information: (202) 691-5654     For Release: 10:00 A.M. EST
Media contact: (202) 691-5902             Thursday, February 22, 2007

INTERNATIONAL COMPARISONS OF MANUFACTURING PRODUCTIVITY AND UNIT 
LABOR COST TRENDS 2005, REVISED

     Manufacturing labor productivity increased in all 16 economies 
covered by the U.S. Department of Labor's Bureau of Labor Statistics 
in 2005.  The Republic of Korea and Taiwan had the largest 
productivity increases (+8.5 and +7.1 percent, respectively).  The 
U.S. increase of 3.3 percent placed it eighth among the 16 economies 
compared.  Data for Spain are included in this news release for the 
first time.
     
     The U.S. increase of 3.3 percent was less than its average annual 
growth rate since 1979.  Nevertheless, since 1995, of the 16 
economies studied only the Republic of Korea and Sweden have had 
greater productivity growth than the United States.
     
     The data presented here differ from those appearing in the BLS 
Productivity and Costs news releases.  (See technical notes.)  
Average annual growth rates for selected measures are shown in tables 
A and B.

PRINTED COPY CONTAINS CHART AT THIS POINT: Chart 1. Percent change in 
manufacturing output per hour, 2004-2005

-2-

     Manufacturing unit labor costs declined in seven of the economies 
and increased in nine, on both a national currency and U.S. dollar 
basis.  However, changes in the dollar's exchange rate reversed the 
direction of movement in two countries.  The Republic of Korea had 
the greatest shift, from a decline in unit labor costs in national 
currency (-2.2 percent) to an increase in unit labor costs expressed 
in U.S. dollars (+9.5 percent).  This shift can be explained by the 
relative appreciation of the won.  Denmark, on the other hand, 
experienced a slight increase expressed in kroner, and a slight 
decrease expressed in U.S. dollars, because of a small relative 
depreciation of the krone.

PRINTED COPY CONTAINS CHART AT THIS POINT: Chart 2. Percent change in 
manufacturing unit labor costs, 2004-2005

-3-

Table A. Output per hour, hourly compensation, unit labor costs, and related measures
Manufacturing, 16 countries or areas, 2004-2005

Percent change

---------------------------------------------------------------------------------------------------------------
                      Output                                        Total   Hourly  Unit Labor Costs
Country                 per             Total    Employ-  Average  compen-  compen- National    U.S.   Exchange
or area                Hour    Output   hours     ment     hours   sation   sation  currency  dollars   rate(1)
---------------------------------------------------------------------------------------------------------------


United States           3.3      2.2     -1.1     -0.5     -0.6      3.5      4.6      1.3      1.3       --

Canada                  3.7      0.7     -2.8     -1.6     -1.3      0.9      3.9      0.2      7.6      7.4
Australia               1.9      0.0     -1.9     -1.7     -0.2      4.2      6.2      4.2      7.9      3.6
Japan                   2.4      1.1     -1.3     -0.7     -0.6      0.3      1.6     -0.8     -2.6     -1.8
Korea, Republic of      8.5      7.0     -1.4     -0.8     -0.6      4.7      6.2     -2.2      9.5     11.9
Taiwan                  7.1      6.5     -0.6      0.4     -1.0      1.0      1.6     -5.2     -1.5      3.9

Belgium                 2.8     -0.5     -3.2     -0.9     -2.3      0.9      4.2      1.5      1.5      0.1
Denmark                 2.0      1.6     -0.4     -2.0      1.7      1.7      2.0      0.1     -0.1     -0.1
France                  3.9      1.5     -2.4     -2.3      0.0      0.3      2.7     -1.2     -1.1      0.1
Germany                 5.6      3.3     -2.2     -1.7     -0.5     -1.1      1.1     -4.2     -4.1      0.1
Italy                   0.2     -2.0     -2.2     -1.4     -0.8      0.8      3.0      2.9      3.0      0.1
Netherlands             4.1      0.2     -3.8     -2.3     -1.5     -0.6      3.3     -0.8     -0.7      0.1
Norway                  2.8      2.4     -0.3     -0.8      0.5      3.2      3.5      0.7      5.4      4.6
Spain                   0.8      0.3     -0.5      1.0     -1.5      3.5      4.1      3.2      3.3      0.1
Sweden                  6.2      4.1     -2.0     -2.2      0.2      0.3      2.3     -3.6     -5.2     -1.6
United Kingdom          2.6     -1.1     -3.6     -3.6     -0.1      0.8      4.6      1.9      1.2     -0.7
---------------------------------------------------------------------------------------------------------------

(1) Value of foreign currency relative to the U.S. dollar.


BOX: Spain

Spain

With this news release, Spain becomes the sixteenth economy included 
in the BLS international comparisons of manufacturing productivity 
and unit labor costs.  The main source of Spain's economic data is 
Spain's National Statistics Institute.  The data comply with 
international standards of national accounts and industrial 
classification.  Current and constant price output series are 
available from 1964 forward.  Employment, hours, and compensation 
data are available from 1979 forward.

END OF BOX: Spain

Additional data available
     Annual indexes of these variables are estimated for the time 
period 1950-2005 and are available at the Bureau of Labor Statistics, 
Division of Foreign Labor Statistics website at 
http://www.bls.gov/fls/home.htm.  However, for analytical purposes, 
the international comparisons in this release go back to 1979.
     
     For further information, contact the Office of Productivity and 
Technology by phone at 202-691-5654, by e-mail at flspr@bls.gov, or 
by mail at Bureau of Labor Statistics,
2 Massachusetts Avenue, NE, Room 2150, Washington, DC 20212.

-4-

Manufacturing productivity, output, and labor input
     The U.S. manufacturing productivity increase of 3.3 percent was 
eighth among the 16 economies compared, behind the Republic of Korea, 
Taiwan, Sweden, Germany, Netherlands, France, and Canada.  Italy, 
which had the lowest productivity growth in 2005, is also the only 
economy to experience a productivity decline over the last five 
years.
     
     The Republic of Korea and Taiwan continued to be among the leaders 
in the growth of manufacturing output, as they have been for the last 
decade.  Sweden, also a leader in manufacturing growth over the 
decade, had more modest output growth in 2005.  U.S. manufacturing 
output growth, like that of most of the economies, also slowed in 
2005.
     
     In addition to the growth of manufacturing output, a decline in 
total work hours was strongly evident in 2005.  While 12 of the 
economies had increases in output, all 16 economies had reductions in 
hours.  The Netherlands had the greatest decline (-3.8 percent) in 
hours in 2005, followed closely by the United Kingdom (-3.6 percent) 
and Belgium (-3.2 percent).
     
     For most economies, the pace of decline in hours worked 
accelerated between 1995-2000 and 2000-2005.  The United States 
experienced the steepest decline, followed by the United Kingdom and 
Denmark.
     
     Manufacturing employment declined in 14 of the 16 economies in 
2005.  Spain and Taiwan are the only economies that experienced 
manufacturing employment growth.
     
     Generally, 2005 was a year of decreases in average hours worked.  
Twelve of the sixteen economies experienced decreases in 2005, 
compared to only three in 2004.  Belgium had the greatest decline in 
average hours worked in 2005 (-2.3 percent).  The U.S. decrease of 
0.6 percent was below its trend over the 1979-2005 period, which is a 
0.1 percent annual increase.

Manufacturing hourly compensation and unit labor costs
     Total labor compensation in U.S. manufacturing increased by 3.5 
percent in 2005.  This was almost the same as the average annual rate 
of increase over the 1979-2005 period.  Of the 15 economies for which 
comparable data are available, the United States is the only one that 
did not have a considerably smaller increase in 2005 than its average 
for the entire period since 1979. (See tables A and B.)
     
     Australia and the Republic of Korea had the highest rate of 
increase in hourly compensation among the economies compared, 
followed by the United States and United Kingdom.  The increase in 
hourly compensation in U.S. manufacturing in 2005 was more than twice 
the increase in 2004, yet about the same as over the past decade.
     
-5-
     
     With hourly compensation increasing more than labor productivity, 
unit labor costs in the United States increased 1.3 percent in 2005.  
Seven economies, led by Taiwan, had declines in unit labor costs, 
expressed in national currency units.
     
     The U.S. dollar depreciated less against major European currencies 
than it had over the past two years.  Consequently, manufacturing 
unit labor costs did not uniformly rise on a dollar basis.  In 2005, 
seven countries had decreases in their unit labor costs on a dollar 
basis.  Sweden was the leader among economies experiencing such 
decreases, followed by Germany and Japan.
     
     The influence of exchange rates was not entirely absent from the 
unit labor cost changes.  The currencies of the Republic of Korea, 
Canada, Norway, Taiwan, and Australia all appreciated against the 
dollar.  Consequently, except for Taiwan, they all experienced 
increases in dollar-denominated unit labor costs.

-6-

                Table B. Output per hour, hourly compensation, unit labor costs, and related measures
                                  Manufacturing, 16 countries or areas, 1979-2005

                                          Average annual rates of change(1)

      --------------------------------------------------------------------------------------------------------
      Country or area        1979-2005   1979-1990   1990-1995   1995-2000   2000-2005   2003-2004   2004-2005
      --------------------------------------------------------------------------------------------------------


                                                  Output per hour


      United States                4.1         2.8         3.7         5.7        r5.6        r7.0        r3.3

      Canada                      r2.3         2.0         3.8        r3.3        r0.6        r0.1        r3.7
      Australia                    2.9         2.8         2.9        r3.7        r2.4       r-0.6         1.9
      Japan                        3.5         3.8         3.3         3.5         3.2         5.7         2.4
      Korea, Republic of            NA          NA         9.4        10.8         7.1        11.5         8.5
      Taiwan                       5.6         6.1         4.7         5.6        r5.4         4.7        r7.1

      Belgium                     r3.4         4.2        r3.1        r2.2        r2.9        r4.9         2.8
      Denmark                     r2.3         2.2         2.7         1.8        r2.8        r7.3        r2.0
      France                       4.3         4.2         4.6         5.0         3.6         3.6         3.9
      Germany (2)                  2.8         2.1         2.9         3.7        r3.2        r3.5        r5.6
      Italy                        1.8        r2.8        r2.7         0.9        -0.6         0.9        r0.2
      Netherlands                  3.4         3.5         3.5         3.4         2.9         5.0         4.1
      Norway                       2.0        r1.9        r0.1        r1.4        r4.6        r5.9         2.8
      Spain                        2.4         3.3         3.1         0.8         1.4         1.5         0.8
      Sweden                      r4.8         2.5         5.8         7.2        r6.5       r11.5        r6.2
      United Kingdom              r3.6         4.1        r3.1         2.6         3.7         5.6        r2.6


                                                       Output


      United States                2.9         2.2         3.6         5.4        r1.3        r6.5        r2.2

      Canada                      r2.3         1.8         2.4         5.9       r-0.3        r1.9        r0.7
      Australia                    1.5         1.6        r0.9        r2.4        r1.2       r-0.1        r0.0
      Japan                        2.4         4.7         0.4         1.2         0.7         4.6         1.1
      Korea, Republic of           8.9        10.7         8.2         7.9         6.6        11.1         7.0
      Taiwan                      r5.9         7.4         4.4         5.8        r4.0         9.4        r6.5

      Belgium                     r1.7         2.6         0.6        r2.1         0.3        r4.0       r-0.5
      Denmark                     r1.2         1.2         2.1         1.7       r-0.1        r3.4        r1.6
      France                       2.1         2.0         1.7         3.9         1.2         1.7         1.5
      Germany (2)                 r1.0         1.2        -1.0         2.2        r1.4        r3.4        r3.3
      Italy                        1.3         2.6         1.6         0.7        -1.2         0.8       r-2.0
      Netherlands                  2.0         2.5         1.8         3.3         0.1         1.6         0.2
      Norway                       0.6       r-0.5        r0.7        r1.4        r2.0        r5.7        r2.4
      Spain                        2.1         2.1         0.6         5.0         0.9         0.4         0.3
      Sweden                      r3.7         1.8         3.8         7.4        r4.2       r10.2        r4.1
      United Kingdom               0.6         0.9         0.5         1.3        -0.6         2.0        -1.1
      --------------------------------------------------------------------------------------------------------
                                                                                Continued on next page
 
-7-

                Table B. Output per hour, hourly compensation, unit labor costs, and related measures
                                  Manufacturing, 16 countries or areas, 1979-2005

                                          Average annual rates of change(1)

      --------------------------------------------------------------------------------------------------------
      Country or area        1979-2005   1979-1990   1990-1995   1995-2000   2000-2005   2003-2004   2004-2005
      --------------------------------------------------------------------------------------------------------


                                                    Total hours


      United States               -1.1        -0.6        -0.1        -0.2        -4.1        -0.5        -1.1

      Canada                       0.0        -0.2        -1.3        r2.6       r-0.9        r1.9       r-2.8
      Australia                   -1.3        -1.2        -2.0        -1.2        -1.2         0.5        -1.9
      Japan                       -1.1         0.8        -2.8        -2.2        -2.4        -1.0        -1.3
      Korea, Republic of            NA          NA        -1.1        -2.6        -0.5        -0.4        -1.4
      Taiwan                       0.2         1.2        -0.3         0.1        -1.3         4.5        -0.6

      Belgium                    r-1.6        -1.6       r-2.4        -0.1        -2.5        -0.9        -3.2
      Denmark                    r-1.1        -1.0        -0.7        -0.1       r-2.9       r-3.6       r-0.4
      France                      -2.1        -2.1        -2.8        -1.1        -2.3        -1.8        -2.4
      Germany (2)                 -1.7        -0.9        -3.8        -1.4        -1.8        -0.1        -2.2
      Italy                       -0.4        -0.2       r-1.0        -0.2        -0.6        -0.2        -2.2
      Netherlands                 -1.3        -1.0        -1.7        -0.1        -2.7        -3.2        -3.8
      Norway                      -1.4        -2.3         0.6        r0.0       r-2.5       r-0.2        -0.3
      Spain                       -0.3        -1.2        -2.4         4.1        -0.5        -1.1        -0.5
      Sweden                      -1.0        -0.7        -1.9         0.3       r-2.1       r-1.1       r-2.0
      United Kingdom             r-2.9        -3.1       r-2.6        -1.3        -4.1        -3.4       r-3.6


                                                     Employment


      United States               -1.2        -0.8        -0.5        -0.1        -3.7        -1.3        -0.5

      Canada                      -0.1        -0.2        -1.5        r2.2       r-0.6       r-0.1       r-1.6
      Australia                   -1.4        -1.3        -2.3        -1.1        -1.1         0.6        -1.7
      Japan                       -0.8         1.0        -1.6        -2.0        -2.5        -2.1        -0.7
      Korea, Republic of            NA          NA        -0.8        -2.5         0.5         0.8        -0.8
      Taiwan                       0.8         2.0        -0.3         0.4        -0.3         3.2         0.4

      Belgium                    r-1.5        -1.6        -2.2        -0.6       r-1.7       r-2.2       r-0.9
      Denmark                    r-1.2        -0.4        -1.2        -1.2       r-2.7       r-4.2       r-2.0
      France                      -1.6        -1.6        -2.5        -0.3        -1.8        -3.1        -2.3
      Germany (2)                 -1.3        -0.1        -4.2        -0.8        -1.5        -1.5        -1.7
      Italy                       -0.8       r-0.8       r-1.9        -0.2        -0.2        -1.1        -1.4
      Netherlands                 -1.1        -0.8        -1.6         0.1        -2.6        -4.2        -2.3
      Norway                      -1.3        -2.2        r0.4        r0.2        -2.6       r-3.5        -0.8
      Spain                        0.1        -0.7        -2.0         3.3         0.9         1.1         1.0
      Sweden                     r-1.5        -1.0        -3.5         0.0       r-1.8       r-2.6       r-2.2
      United Kingdom              -2.8        -2.9        -2.6       r-1.2       r-4.4       r-4.3       r-3.6
      --------------------------------------------------------------------------------------------------------
                                                                                Continued on next page

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                Table B. Output per hour, hourly compensation, unit labor costs, and related measures
                                  Manufacturing, 16 countries or areas, 1979-2005

                                          Average annual rates of change(1)

      --------------------------------------------------------------------------------------------------------
      Country or area        1979-2005   1979-1990   1990-1995   1995-2000   2000-2005   2003-2004   2004-2005
      --------------------------------------------------------------------------------------------------------


                                                    Average hours


      United States                0.1         0.2         0.4        -0.2        -0.3         0.8        -0.6

      Canada                       0.1         0.0         0.3         0.4        -0.2        r2.0        -1.3
      Australia                    0.1         0.1         0.3        -0.1        -0.1        -0.1       r-0.2
      Japan                       -0.3        -0.2        -1.3        -0.2         0.1         1.1        -0.6
      Korea, Republic of            NA          NA        -0.2        -0.1        -1.0        -1.2        -0.6
      Taiwan                      -0.6        -0.8         0.0        -0.3        -1.0         1.3        -1.0

      Belgium                     -0.1         0.0       r-0.2         0.5       r-0.8        r1.3       r-2.3
      Denmark                      0.1        -0.5         0.6         1.1       r-0.2        r0.6        r1.7
      France                      -0.5        -0.5        -0.3        -0.8        -0.5         1.3         0.0
      Germany (2)                 -0.5        -0.9         0.4        -0.6        -0.3        r1.4        -0.5
      Italy                        0.4         0.6         0.9         0.0        -0.3         0.9        -0.8
      Netherlands                 -0.2        -0.2         0.0        -0.2        -0.2         1.0        -1.5
      Norway                       0.0        -0.1        r0.2        -0.2         0.2        r3.4         0.5
      Spain                       -0.4        -0.5        -0.4         0.8        -1.4        -2.2        -1.5
      Sweden                       0.5         0.3         1.7         0.2       r-0.3        r1.6        r0.2
      United Kingdom             r-0.1        -0.2        r0.0       r-0.1        r0.3        r1.0        -0.1


                                Total labor compensation(3): National currency basis


      United States                3.6         4.9         3.4         4.4         0.4         1.5         3.5

      Canada                      r4.6         6.5         2.4         5.2        r2.1        r3.1        r0.9
      Australia                     NA          NA        r3.2        r3.1        r3.7        r3.2        r4.2
      Japan                        1.8         5.5         0.7        -1.0        -2.1        -0.6         0.3
      Korea, Republic of          13.9        19.6        17.6         5.4         7.2        13.8         4.7
      Taiwan                      r7.4        13.5         6.8         3.6       r-0.7         2.1        r1.0

      Belgium                      2.7         4.4         1.3         1.9        r1.2        r1.3         0.9
      Denmark                      4.2         7.0         2.3         2.8        r1.2       r-0.4        r1.7
      France                       3.8         7.3         1.7         1.7         0.8         0.5         0.3
      Germany (2)                  2.7         4.6         2.4         1.6        r0.1        r0.4       r-1.1
      Italy                        6.5        11.4        r3.9         2.6         2.5         3.0         0.8
      Netherlands                  2.8         3.1         2.8         3.4         1.3         0.1        -0.6
      Norway                      r4.9        r6.4        r4.1        r5.1        r2.0        r3.0        r3.2
      Spain                        7.0        10.1         5.5         5.6         3.3         2.3         3.5
      Sweden                      r5.3         8.4         2.0         5.3        r1.9        r1.6        r0.3
      United Kingdom               4.0         7.1         1.3         3.4         0.4         1.2        r0.8
      --------------------------------------------------------------------------------------------------------
                                                                                Continued on next page

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                Table B. Output per hour, hourly compensation, unit labor costs, and related measures
                                  Manufacturing, 16 countries or areas, 1979-2005

                                          Average annual rates of change(1)

      --------------------------------------------------------------------------------------------------------
      Country or area        1979-2005   1979-1990   1990-1995   1995-2000   2000-2005   2003-2004   2004-2005
      --------------------------------------------------------------------------------------------------------


                                  Hourly compensation(3): National currency basis


      United States                4.8         5.5         3.5         4.7         4.6         2.0         4.6

      Canada                       4.6         6.8         3.8        r2.6        r2.9        r1.2        r3.9
      Australia                     NA          NA        r5.4         4.3        r4.9        r2.7        r6.2
      Japan                        2.9         4.6         3.6         1.2         0.4         0.5         1.6
      Korea, Republic of            NA          NA        18.9         8.1         7.7        14.2         6.2
      Taiwan                       7.2        12.1         7.1         3.4        r0.5        -2.3        r1.6

      Belgium                      4.4         6.1        r3.8        r2.0        r3.8        r2.2        r4.2
      Denmark                     r5.3         8.1         2.9         2.9        r4.2        r3.3        r2.0
      France                       6.1         9.6         4.6         2.8         3.2         2.3         2.7
      Germany (2)                  4.5         5.6         6.4         3.1        r1.9         0.5        r1.1
      Italy                       r6.9       r11.6         5.0         2.8         3.1         3.2         3.0
      Netherlands                  4.1         4.1         4.5         3.5         4.2         3.5         3.3
      Norway                       6.3         9.0         3.4         5.2        r4.6        r3.3        r3.5
      Spain                        7.3        11.4         8.2         1.4         3.9         3.4         4.1
      Sweden                       6.4         9.1         4.0         5.1        r4.1        r2.7        r2.3
      United Kingdom               7.0        10.6        r4.0         4.8        r4.8         4.7        r4.6


                                    Unit labor costs(3): National currency basis


      United States                0.7         2.7        -0.2        -0.9       r-0.9       r-4.7        r1.3

      Canada                      r2.3         4.7         0.0        -0.7        r2.4        r1.1        r0.2
      Australia                     NA          NA        r2.4        r0.6        r2.5        r3.3        r4.2
      Japan                       -0.6         0.8         0.3        -2.2        -2.7        -5.0        -0.8
      Korea, Republic of           4.6         8.1         8.7        -2.4         0.5         2.4        -2.2
      Taiwan                      r1.5         5.6         2.3        -2.1       r-4.6        -6.7       r-5.2

      Belgium                     r1.0         1.8         0.7       r-0.2        r0.9       r-2.6        r1.5
      Denmark                     r2.9         5.7         0.2         1.1        r1.4       r-3.7        r0.1
      France                       1.7         5.2         0.0        -2.1        -0.4        -1.2        -1.2
      Germany (2)                  1.7         3.3         3.4        -0.5       r-1.3       r-2.9       r-4.2
      Italy                        5.1         8.5        r2.3         1.9         3.7         2.3        r2.9
      Netherlands                  0.7         0.6         1.0         0.1         1.2        -1.5        -0.8
      Norway                      r4.3         6.9        r3.4        r3.7        r0.0       r-2.5        r0.7
      Spain                        4.8         7.8         4.9         0.5         2.4         1.9         3.2
      Sweden                      r1.5         6.5        -1.7        -1.9       r-2.2       r-7.9       r-3.6
      United Kingdom               3.3         6.2         0.8         2.1         1.0        -0.8        r1.9
      --------------------------------------------------------------------------------------------------------
                                                                                Continued on next page

-10-

                Table B. Output per hour, hourly compensation, unit labor costs, and related measures
                                  Manufacturing, 16 countries or areas, 1979-2005

                                          Average annual rates of change(1)

      --------------------------------------------------------------------------------------------------------
      Country or area        1979-2005   1979-1990   1990-1995   1995-2000   2000-2005   2003-2004   2004-2005
      --------------------------------------------------------------------------------------------------------


                                       Unit labor costs(3): U.S. dollar basis


      United States                0.7         2.7        -0.2        -0.9       r-0.9       r-4.7        r1.3

      Canada                      r2.1         4.7        -3.2        -2.2        r6.6        r8.8        r7.6
      Australia                     NA          NA        r1.3       r-4.1        r8.2       r16.7        r7.9
      Japan                        2.1         4.6         9.4        -4.9        -3.2         1.9        -2.6
      Korea, Republic of           1.6         4.4         6.9        -9.5         2.5         6.6         9.5
      Taiwan                      r1.9         8.5         2.7        -5.3       r-5.1        -3.8       r-1.5

      Belgium                     r0.6         0.6         3.3       r-7.7        r7.1        r7.0         1.5
      Denmark                     r2.4         4.2         2.2        -6.1        r7.6        r5.8       r-0.1
      France                       0.8         2.9         1.8        -8.8         5.8         8.6        -1.1
      Germany (2)                  2.3         4.5         5.9        -8.0        r4.8        r6.6       r-4.1
      Italy                        2.6         5.0       r-3.8        -3.1        10.1        12.4        r3.0
      Netherlands                  1.2         1.5         3.6        -7.6         7.5         8.3        -0.7
      Norway                      r3.3         4.9        r3.1       r-2.9        r6.5        r2.4        r5.4
      Spain                        2.0         3.8         0.8        -6.6         8.7        11.9         3.3
      Sweden                     r-0.6         3.4        -5.3        -6.7        r1.9        r1.3       r-5.2
      United Kingdom               2.7         4.5        -1.6         1.3        r4.8        11.2        r1.2


                                                  Exchange rates(4)


      United States                 --          --          --          --          --          --          --

      Canada                      -0.1         0.0        -3.2        -1.6         4.2         7.6         7.4
      Australia                   -1.5        -3.2        -1.1        -4.7         5.6        12.9         3.6
      Japan                        2.7         3.8         9.1        -2.7        -0.4         7.2        -1.8
      Korea, Republic of          -2.8        -3.4        -1.7        -7.3         2.0         4.1        11.9
      Taiwan                       0.4         2.7         0.3        -3.3        -0.5         3.1         3.9

      Belgium                     -0.4        -1.2         2.5        -7.6         6.2         9.9         0.1
      Denmark                     -0.5        -1.5         2.0        -7.1         6.2         9.8        -0.1
      France                      -0.8        -2.2         1.8        -6.8         6.2         9.9         0.1
      Germany (2)                  0.6         1.1         2.5        -7.5         6.2         9.9         0.1
      Italy                       -2.4        -3.3        -6.0        -4.9         6.2         9.9         0.1
      Netherlands                  0.5         0.9         2.6        -7.6         6.2         9.9         0.1
      Norway                      -0.9        -1.9        -0.3        -6.4         6.5         5.1         4.6
      Spain                       -2.6        -3.7        -3.9        -7.1         6.2         9.9         0.1
      Sweden                      -2.1        -2.9        -3.7        -4.9         4.2         9.9        -1.6
      United Kingdom              -0.6        -1.6        -2.4        -0.8         3.7        12.1        -0.7
      --------------------------------------------------------------------------------------------------------
      r=revised                                                  NA=data not available
      (1) Rates of change based on the compound rate method.
      (2) Data for years before 1991 pertain to the former West Germany.
      (3) Adjusted for employment taxes and government subsidies to estimate the actual cost to employers.
      (4) Value of foreign currency relative to the U.S. dollar.

-11-

Trade-weighted unit labor costs
     
     BLS constructs indexes of U.S. unit labor cost trends relative to 
a trade-weighted average of unit labor cost trends in the other 
economies to take account of differences in the relative importance 
of foreign economies to U.S. trade in manufactured goods.  Relative 
trade-weighted unit labor cost indexes are calculated on both a 
national currency and a U.S. dollar basis.
     
     In this release, the relative U.S. trade-weighted indexes are 
estimated against 14 economies for which comparable data are 
available over the period of comparison; the indexes underlying this 
chart are shown in table C.
     
     Chart 3 begins in 1979, a year in which U.S. manufacturing output 
reached a business cycle peak.
     
PRINTED COPY CONTAINS CHART AT THIS POINT: Chart 3. U.S. 
manufacturing unit labor costs relative to 14(1) other economies, 1979-
2005
     
     In the chart, the solid line indicates that U.S. unit labor costs 
rose faster than the costs in other economies from 1979 to 1985 on a 
U.S. dollar basis.  In most years from 1986 to 1996, U.S. costs 
either rose at a slower rate than in other economies or fell at a 
faster rate.  From 1997, however, the strength of the U.S. dollar 
caused relative U.S. unit labor costs to rise.  After a dip in 1999, 
the index of relative U.S. unit labor costs rose in 2000 and 2001, 
only to decline again after 2001 with the weakening of the U.S. 
dollar.

-12-

                              Table C. U.S. manufacturing unit labor
                          costs relative to 14(1) other economies, 1979-2005

                  ----------------------------------------------------------------
                                 Unit Labor Costs            Unit Labor Costs
                            National Currency Basis          U.S. Dollar Basis

                  Year      Own   Competitors'            Own   Competitors'   
                           Index     Index     Ratio     Index     Index     Ratio
                  ----------------------------------------------------------------

                  1979     100.0     100.0     100.0     100.0     100.0     100.0
                  1980     112.7     111.9     100.7     112.7     110.4     102.1
                  1981     117.6     121.7      96.7     117.6     109.7     107.2
                  1982     127.4     131.2      97.1     127.4     108.6     117.3
                  1983     122.7     133.3      92.0     122.7     106.5     115.2
                  1984     123.8     134.1      92.3     123.8     100.6     123.1
                  1985     126.2     135.7      93.0     126.2      98.0     128.8
                  1986     130.1     141.4      92.0     130.1     117.3     110.8
                  1987     125.4     144.8      86.6     125.4     134.2      93.4
                  1988     126.5     147.0      86.1     126.5     146.2      86.5
                  1989     129.4     150.9      85.8     129.4     148.2      87.4
                  1990     133.4     158.2      84.3     133.4     162.0      82.3
                  1991     136.8     165.9      82.5     136.8     171.2      79.9
                  1992     137.8     169.4      81.4     137.8     175.5      78.5
                  1993     136.9     170.0      80.5     136.9     168.0      81.5
                  1994     134.2     167.1      80.3     134.2     164.7      81.5
                  1995     131.9     168.6      78.2     131.9     173.9      75.9
                  1996     129.0     171.2      75.4     129.0     170.7      75.6
                  1997     127.1     168.4      75.5     127.1     156.4      81.3
                  1998     125.7     169.8      74.0     125.7     146.5      85.8
                  1999     124.4     166.2      74.9     124.4     146.4      85.0
                  2000     125.8     161.9      77.7     125.8     138.2      91.0
                  2001     127.4     167.7      76.0     127.4     134.7      94.6
                  2002     123.5     168.1      73.5     123.5     136.4      90.6
                  2003     124.3     167.7      74.1     124.3     152.7      81.4
                  2004     118.4     165.7      71.5     118.4     162.9      72.7
                  2005     120.0     164.5      72.9     120.0     167.0      71.8
                  ----------------------------------------------------------------
                  (1) Australia has been omitted from this table because data are 
                      not available before 1990.

                   
-13-

Technical Notes

The comparisons in this release are based on data available to the 
Bureau of Labor Statistics as of the end of December 2006 from the 
national statistical offices of the 16 economies compared.

Definitions. Labor productivity is defined as real output per hour 
worked. Although the labor productivity measure presented in this 
release relates output to the hours worked of persons employed in 
manufacturing, it does not measure the specific contributions of 
labor as a single factor of production. Rather, it reflects the joint 
effects of many influences, including new technology, capital 
investment, capacity utilization, energy use, and managerial skills, 
as well as the skills and efforts of the workforce.

Unit labor costs are defined as the cost of labor input required to 
produce one unit of output. They are computed as compensation in 
nominal terms divided by real output.  Unit labor costs can also be 
computed by dividing hourly compensation by output per hour, that is, 
by labor productivity.

Methodology. BLS constructs trends of manufacturing labor 
productivity, hourly compensation costs, and unit labor costs from 
three basic aggregate measures: output, total labor hours, and total 
compensation. The hours and compensation measures refer to employees 
(wage and salary earners) in Belgium and Taiwan.  For all other 
economies, the measures refer to all employed persons, including 
employees, self-employed persons, and unpaid family workers.

In general, the measures relate to total manufacturing as defined by 
the International Standard Industrial Classification (ISIC). However, 
the measures for France include parts of mining. Data for the United 
States are in accordance with the North American Industry 
Classification System (NAICS 97), except compensation data before 
1987.  Canadian output, employment, and hours data are in accordance 
with NAICS 97 beginning in 1997 while compensation data are also in 
accordance with NAICS 1997 starting in 1961.

The data for the most recent years are based on the United Nations 
System of National Accounts 1993 (SNA 93) or its sub-system, the 
European System of Integrated National Accounts (ESA 95). For earlier 
years, data were compiled according to previously used systems.

To obtain historical time series, BLS may link together data series 
which were compiled according to different accounting systems by 
national statistical offices.

Output. For most economies, the output measures are real value added 
in manufacturing from national accounts. However, output for Japan 
prior to 1970 and for the Netherlands prior to 1960 are indexes of 
industrial production. The manufacturing value added measures for the 
United Kingdom are essentially identical to their indexes of 
industrial production.

-14-

Most economies now estimate manufacturing real output using moving 
price weights, as recommended by SNA 93.  However, many earlier time 
periods within the historical real output series have been estimated 
using fixed price weights, with the weights updated periodically (for 
example, every 5 or 10 years).  Taiwan and Korea still use fixed 
price weights to estimate real output.

Measures of real output also may differ among economies because of 
different approaches to estimating the prices of high-technology 
products like computers and, in general, of products that undergo 
rapid quality change.

For the United States, the output measure for the manufacturing 
sector is a chain-weighted index of real gross product originating 
(deflated value added) produced by the Bureau of Economic Analysis 
(BEA) of the U.S. Department of Commerce. For more information on the 
U.S. measure, see "Improved Estimates of Gross Product by Industry 
for 1947-98," Survey of Current Business, June 2000, pp. 24-38 and 
"Gross Domestic Product by Industry for 1947-86. New Estimates Based 
on the North American Industry Classification System," Survey of 
Current Business, December 2005, pp. 70-84.

The U.S. output series used for international comparisons differs 
from the manufacturing output series that BLS publishes as part of 
its major sector productivity and costs measures for the United 
States.  The international comparisons program uses a value added 
output concept, while the major sector series is on a sectoral output 
basis. Sectoral output is gross output less intrasector sales and 
transfers. The U.S. major sector productivity and costs measures can 
be found at http://www.bls.gov/lpc/home.htm. For information on 
sectoral output, see "Measurement of productivity growth in U.S. 
manufacturing," Monthly Labor Review, July 1995, pp. 13-28.

Value added measures have been used for the international comparisons 
series because the data are more readily available from the 
economies' national accounts, whereas sectoral output would require a 
complex estimation procedure.  Even though BLS has determined that 
sectoral output is the correct concept for U.S. measures of 
productivity, there are other considerations that may make value 
added a better concept for international comparisons of labor 
productivity, such as differences among economies in the extent of 
vertical integration of industries.

Labor Input. For all of the economies for the most recent years, the 
term "hours" refers to hours worked.  For some earlier years, BLS 
uses other hours measures.

For the United States, the employment and hours data series beginning 
with 1987 are taken from the NAICS-based manufacturing all-employed 
series published by BLS as part of the major sector productivity and 
cost measures.  For the period before 1987, these series are linked 
to NAICS-based, employees-only data from the Current Employment 
Statistics (CES) program.

For most other economies, recent years' aggregate hours series are 
obtained from national statistical offices, usually from national 
accounts.  However, for some economies and for

-15-

earlier years, BLS calculates the aggregate hours series using 
employment figures published with the national accounts, or other 
comprehensive employment series, and data on average hours worked.

Compensation (Labor Cost).  The compensation measures are from 
national accounts data and are in nominal terms. Compensation 
includes employer expenditures for legally required insurance 
programs and contractual and private benefit plans, in addition to 
all payments made in cash or in kind directly to employees. When data 
for the self-employed are not available, total compensation is 
estimated by assuming the same average compensation for the self-
employed as for employees.

Labor cost is defined as compensation plus employment taxes minus 
employment subsidies, i.e. the cost to employers of hiring labor. For 
most economies, labor cost is the same as compensation. However, for 
Australia, Canada, France, and Sweden, compensation is increased to 
account for important taxes on payroll or employment. For the United 
Kingdom, compensation is reduced between 1967 and 1991 to account for 
subsidies.

Data for Germany. German data prior to 1991 pertain to the former 
West Germany. The data series are linked in 1991.

Data for Australia. Australian data are published by fiscal years, 
which run from July 1 through June 30. The Australian Bureau of 
Statistics provides unpublished calendar-year data for real value 
added, employment, and hours worked. For compensation, BLS estimates 
calendar-year series using two-year moving averages of the data for 
fiscal years. Manufacturing compensation data are not available for 
years prior to 1990.

Data for Recent Years. The measures for recent years may be based on 
current indicators of output (such as industrial production indexes), 
employment, average hours, and hourly compensation until national 
accounts and other statistics, normally used for the long-term 
measures, become available.

Trade-Weighted Measures. The trade weights used to calculate the 
relative unit labor cost indexes of the United States and the other 
economies are based on the relative dollar value of U.S. trade in 
manufactured commodities (exports plus imports) with each economy in 
2005.  The trade data are compiled by the U.S. Census Bureau.

The following weights were used for the entire period for which 
trade-weighted unit labor cost measures are produced:

-16-

                Weight                              Weight

Canada          36.80             Germany           10.33
Japan           16.59             Italy              3.65
Korea            6.20             Netherlands        3.37
Taiwan           4.89             Norway             0.42
Belgium          2.70             Spain              1.23
Denmark          0.60             Sweden             1.52
France           4.73             United Kingdom     6.97


Level Comparisons. The BLS measures are limited to trend comparisons. 
BLS does not prepare level comparisons of manufacturing productivity 
and unit labor costs because of data limitations and technical 
problems in comparing the levels of manufacturing output among 
economies. Each economy measures manufacturing output in its own 
currency units. To compare outputs among economies, a common unit of 
measure is needed. Market exchange rates are not suitable as a basis 
for comparing output levels. What is needed are purchasing power 
parities, which are the number of foreign currency units required to 
buy goods and services equivalent to what can be bought with one unit 
of U.S. currency.

Purchasing power parities are available for total gross domestic 
product (GDP) from the Organization for Economic Cooperation and 
Development (OECD). However, these parities are derived for 
expenditures made by consumers, business, and government for goods 
and services - not for value added by industry. Therefore, they do 
not provide purchasing power parities by industry. The parities 
developed for total GDP are not suitable for each component industry, 
such as manufacturing.

European exchange rates. On Jan. 1, 1999, 11 European countries 
joined the European Monetary Union (EMU). In subsequent years they 
were joined by Greece and Slovenia. The euro, the official currency 
of the EMU, was established at fixed conversion rates to the previous 
national currencies of EMU members. Data on manufacturing value added 
and labor compensation for euro-area countries are now reported in 
euros.

In order to maintain historical continuity of data series, data for 
euro-area countries for years before 1999 have been converted to 
euros by applying the fixed euro/national currency conversion rates. 
For countries and years where output, compensation, and exchange 
rates are converted from national currency units into euros, the 
following fixed conversion rates are used:

1 euro equals: 40.3399 Belgian francs  1936.27  Italian lire
               6.55957 French francs   2.20371  Netherlands guilders
               1.95583 German marks    166.386  Spanish pesetas

The currency exchange rates cited in this publication are annual 
averages of daily buying rates in New York City.