Internet address:	http://www.bls.gov/mfp	USDL 03-158
Historical, technical		Tuesday, April 8, 2003
information:	(202) 691-5606	For Release: 10:00 AM EDT 
Media contact:	(202) 691-5902	
		

MULTIFACTOR PRODUCTIVITY TRENDS, 2001

Private Business and Private Nonfarm Business

From 2000 to 2001, multifactor productivity fell 1.0 percent in both the
private business sector and the private nonfarm business sector for the first
time since 1991, the Bureau of Labor Statistics of the U.S. Department of Labor
reported. 
  
Although short-term fluctuations of multifactor productivity and output per
hour generally move in the same direction, multifactor productivity decreased
and output per hour increased in 2001.   The 2001 annual changes are summarized
in table A, and further detail and historical measures are shown in tables 1 
through 6.  Manufacturing multifactor productivity measures are not yet 
available for 2001.
  
Chart 1 shows the annual indexes of multifactor productivity, output per hour
worked, and output per unit of capital services for the 1948-2001 period for
private business.  Over the last 50 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.  
  
Multifactor productivity is designed to measure the joint influences on economic
growth of technological change, efficiency improvements, returns to scale,
reallocation of resources, and other factors.  Multifactor productivity,
therefore, differs from labor productivity (output per hour) 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.  

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 omit the output
of government enterprises.  

  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 2000-2001

Private business sector

Multifactor productivity declined 1.0 percent in 2001, the first decline since 
the 1991 recession.   The multifactor productivity decline in 2001 reflected a
0.1 percent decline in output while the combined inputs of capital and labor
increased by 0.9 percent.  By comparison, in 2000, multifactor productivity 
increased 1.5 percent as output increased by 4.0 percent and combined inputs
grew by 2.5 percent.
  
In 2001, growth in capital services slowed to 4.0 percent, down from the 5.6
percent increase in 2000.   Labor input declined for the first time since 1991.
The capital-labor ratio (capital services per hour of all persons) typically 
grows rapidly when hours fall.  The 5.5 percent advance was the largest since
1982 (table 3).  
  
Capital services of equipment grew more rapidly than other asset categories. 
Within equipment, capital services of information equipment and of software 
continued to increase sharply in 2001 (table 5).  However, both showed the 
slowest rates of increase since 1995.  The largest increase continued to be 
in computers and related equipment, 23.7 percent.
  
Labor input reflects the change in hours at work, adjusted for the effects
of changing labor composition.  Changes in hours at work reflect the combined
effects of changes in the average workweek and employment.  The labor 
composition component grew by 0.8 percent in 2001, the largest increase since
1992, while the workweek declined sharply for the second year in a row. 
Employment declined 0.5 percent in 2001, the first decline since 1992.  Labor
input fell because of the decline in both the workweek and in employment,
exceeding the sharp increase in labor composition.
  
  Table A.  Productivity and related data, percent changes 2000-01
					     Private     Private
					     Business1   Nonfarm 
							 Business1

Productivity
  Multifactor Productivity2                    -1.0        -1.0
    Output per hour of all persons              1.3         1.2
    Output per unit of capital services        -4.0        -4.0

Output                                         -0.1        -0.1

Inputs
  Labor input3                                 -0.6        -0.4
    Hours                                      -1.4        -1.3
    Labor Composition4                          0.8         0.9
  Capital services                              4.0         4.1
  Combined units of labor and capital inputs5   0.9         1.0

Analytic ratio:
  Capital services per hour of all persons      5.5         5.5

1.  Excludes government enterprises.
2.  Output per unit of combined labor and capital inputs.
3.  Index of hours worked; hours worked 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.

  
  
Labor productivity (output per hour worked) increased 1.3 percent in 2001. 
This was the smallest increase since 1995 and was accompanied by a sharp decline
in hours worked, 1.4 percent.  Capital productivity (output per unit of capital
services) fell 4.0 percent, the largest rate of decline since 1982, another 
recession year.

Private nonfarm business

Multifactor productivity in the private nonfarm business sector declined 1.0 
percent in 2001, the first decline since 1991.  Output declined by 0.1 percent,
and the growth of combined units of capital and labor inputs was 1.0 percent.  
By comparison, in 2000, multifactor productivity rose 1.4 percent as output
increased 3.9 percent and combined inputs rose 2.5 percent. 
  
Labor input declined 0.4 percent in 2001.  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 positive contribution from labor composition.  Capital
services growth was 4.1 percent,  a more modest increase than the rapid growth 
seen in the previous five years. The fastest growing component of capital
services was equipment, 6.9 percent in 2001 (table 6); however the growth in 
equipment was the slowest since 1995.  Capital services of information 
processing equipment and software rose 11.6 percent, the slowest rate of growth
since 1995.  As in previous years, the largest increase was in computers and
related equipment, 23.7 percent in 2001.
  
Labor productivity grew 1.2 percent in 2001, and capital productivity dipped
4.0 percent.   The decline in capital productivity was the largest since 1982.
In 2001, capital services per hour increased at its highest rate since 1982, 
posting a 5.5 percent gain.

Long-term trends in private business and private nonfarm business

Labor productivity (output per hour) 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 capital-hours 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 (table B).
  
 
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
one-third of the total payments.
     
Private Business Sector
  
Over the entire 1948 to 2001 period, output per hour grew at an annual rate of
2.5 percent in private business (table B).  Of the 2.5 percent growth rate in
labor productivity, 1.3 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 other types of capital (0.6 percent).
Information processing equipment and software is composed of computers and 
related equipment, communications equipment, instruments and photocopying
equipment, and software.  Investment in these forms of capital was small prior
to 1979 but has grown to nearly half of all investment in recent years. 

In the 1948-1973 period, labor productivity, or output per hour, in private 
industry grew 3.3 percent per year, faster than the average rate for the entire
1948-2001 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 (table B and chart 2).  From 1973 to
1979, labor productivity rose only 1.3 percent per year.  Gains in multifactor
productivity dropped to only 0.6 percent per year.  At the same time, the
average annual contribution of capital intensity slowed to 0.7 percent, and 
labor composition made no contribution.
   
From 1979 to 1990, labor productivity increased at an annual average rate of
1.6 percent, slightly faster than during the previous period (1.3 percent) 
but still relatively low.  Multifactor productivity growth, at 0.5 percent,
was about the same as in 1973-1979 (0.6 percent).  The contribution of capital
intensity inched up from 0.7 percent in 1973-1979 to 0.8 percent in 1979-1990,
as information processing equipment began to play an increasingly important 
role, accounting for nearly two-thirds of the growth in capital intensity. 
However, the slight improvement in labor productivity growth was primarily due
to the change in the composition of the work force, which contributed 0.3 
percent to growth after contributing nothing in the previous period.
   
From 1990 to 1995, labor productivity advanced at an annual rate of 1.5 percent, 
0.1 percentage point less than during the 1979-1990 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 services, 
from 0.8 percent in 1979-1990 to 0.5 percent in 1990-1995.  The slower rate of
growth in labor productivity was primarily due to the decline in the
contribution of capital services.  However, information processing capital 
continued growing in importance, contributing 80 percent of the increase in all
capital services.

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 2001
(percent per year)
   

			  1948  1948  1973  1979  1990   1995   2000
			   -01   -73   -79   -90   -95    -00    -01
Private business1

Output per hour 
of all persons             2.5   3.3   1.3   1.6   1.5    2.7    1.3

Contribution of 
capital intensity2         0.9   0.9   0.7   0.8   0.5    1.1    1.7

  Contribution of 
  information processing 
  equipment and software3  0.3   0.1   0.3   0.5   0.4    0.8    0.8

  Contribution of all
  other capital services   0.6   0.8   0.5   0.3   0.1    0.2    0.9

Contribution of 
labor composition4         0.2   0.2   0.0   0.3   0.4    0.3    0.6

Multifactor productivity5  1.3   2.1   0.6   0.5   0.6    1.3   -1.0


Private nonfarm business1

Output per hour 
of all persons             2.2   2.9   1.2   1.4   1.6    2.5    1.2

Contribution of 
capital intensity2         0.8   0.8   0.7   0.8   0.5    1.1    1.7

  Contribution of 
  information processing 
  equipment and software3  0.3   0.1   0.3   0.5   0.4    0.8    0.8
   
  Contribution of all
  other capital services   0.5   0.7   0.5   0.3   0.1    0.2    0.9

Contribution of 
labor composition4         0.2   0.2   0.0   0.3   0.4    0.3    0.6

Multifactor productivity5  1.1   1.9   0.4   0.3   0.6    1.1   -1.0

  Contribution of R&D to
  multifactor productivity 0.2   0.2   0.1   0.2   0.2    0.2    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 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: The sum of multifactor productivity and the contributions 
may not equal labor productivity due to independent rounding.

From 1995 to 2000, output per hour rebounded to a 2.7 percent growth rate per 
year, 1.2 percentage points more than during the 1990-1995 period.  Most of 
this acceleration could be attributed to faster multifactor productivity growth,
which more than doubled from 0.6 percent to 1.3 percent per year.  The remainder
of the increase was due to a rise in the contribution of capital services, from 
0.5 percent to 1.1 percent; information processing capital accounted for a large
part of this increase, contributing 82 percent of all capital increases.  This
continued the trend in the substitution of information processing equipment for
other forms of capital seen in recent years.
    
Private nonfarm business sector

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.

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 1948-2001 period, or about 18 percent of total multifactor productivity 
growth (table B).  The contribution of research and development varied little 
over time, contributing 0.2 percent per year during the 1948-73 period, 0.1 
percent during the 1973-79 period and 0.2 percent for all but the last period
of 2000-2001 when the contribution was 0.3 percent. 
 
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 2002.
  
The hours data for 2001 in this release continue to apply the results of the 
2000 Hours at Work survey.  This survey is designed to measure the ratio of 
hours at work to hours paid for production and nonsupervisory employees in
nonagricultural establishments.  BLS converts hours paid from the Current
Employment Statistics program to hours at work using data from this survey.
The results from the 2000 Hours at Work survey can be found at
http://www.bls.gov/mfp/mprhws.pdf or in print.
  
Labor composition measures have been updated through 2001.  A brief description,
"Changes in the Composition of Labor for the BLS Multifactor Productivity
Measures," is available at http://www.bls.gov/mfp/mprlabor.pdf or in print.
  
Comprehensive tables containing additional data beyond the scope of this press
release are available upon request, at http://www.bls.gov/mfp/mprdload.htm or
in print.
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.
  
This release presents data for the private business and private nonfarm business
sectors.  The private business sector, which accounts for about 76 percent of 
gross domestic product, 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, 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 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 2001, 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 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.  This 
news release makes use of revised GPO data, released by BEA in November 2002.
  
Labor input in private business and private nonfarm business is obtained by
Tornqvist-aggregation of the hours worked by all persons, classified by 
education, work experience, and gender with weights determined by their shares
of labor compensation.  Hours paid of employees are obtained from the Current
Employment Statistics program.  The hours at work of proprietors, unpaid family
workers, and farm employees are derived from the Current Population Survey.
The hours of employees are converted to an at-work basis by using the Hours at
Work survey.  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.
   
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 1953-2001 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."
Table 1. Private business sector: Productivity and related measures, 1948-2001

Indexes 1996=100

       Output                                          Combined              
       per     Output  Multi-                          units of              
       hour    per     factor                  Capital capital Capital       
       of all  unit of Product-        Labor   Serv-   and     per hour of   
Year   persons capital ivity2  Output3 Input4  ices5   labor6  all persons   

1948    31.1    108.5   51.6    18.6    51.1    17.2    36.1    28.6
1949    32.2    105.5   52.2    18.6    49.4    17.6    35.6    30.5

1950    35.0    111.7   56.0    20.5    50.3    18.3    36.5    31.3

1955    40.9    115.5   62.0    24.9    53.7    21.6    40.2    35.4

1960    45.6    112.0   65.5    27.5    54.0    24.6    42.1    40.7

1965    55.9    123.3   76.6    35.6    58.0    28.9    46.5    45.3
1966    58.2    124.7   78.9    38.1    59.5    30.5    48.2    46.6
1967    59.5    119.9   79.0    38.8    59.4    32.3    49.1    49.6
1968    61.4    120.8   81.1    40.7    60.3    33.7    50.3    50.8
1969    61.7    118.4   80.6    42.0    62.1    35.5    52.1    52.1

1970    63.0    113.1   80.5    42.0    61.0    37.1    52.2    55.7
1971    65.8    112.8   83.0    43.6    60.5    38.7    52.5    58.4
1972    68.0    115.4   85.5    46.5    62.6    40.3    54.5    58.9
1973    70.1    116.9   87.8    49.8    64.8    42.6    56.8    60.0
1974    69.0    109.2   84.6    49.0    65.2    44.9    57.9    63.2

1975    71.4    104.1   85.4    48.5    62.4    46.6    56.8    68.6
1976    74.1    107.8   88.6    51.9    64.2    48.1    58.5    68.7
1977    75.2    109.7   90.0    54.8    66.8    50.0    60.9    68.6
1978    76.1    111.6   91.2    58.2    70.2    52.2    63.9    68.1
1979    76.0    109.8   90.8    60.2    72.4    54.8    66.2    69.2

1980    75.8    103.3   88.8    59.4    71.9    57.6    67.0    73.4
1981    77.3    101.0   88.9    61.0    73.0    60.5    68.7    76.5
1982    77.2     94.2   86.2    59.3    71.7    63.0    68.8    81.9
1983    79.9     96.2   88.6    62.5    73.4    65.0    70.5    83.0
1984    82.2    100.0   91.5    68.1    77.7    68.1    74.4    82.2

1985    83.9     99.5   92.4    71.0    79.6    71.3    76.8    84.3
1986    86.5     99.0   93.9    73.6    80.4    74.4    78.4    87.4
1987    87.0     99.2   94.2    76.3    83.1    76.9    81.0    87.7
1988    88.1    100.4   94.8    79.6    86.3    79.2    83.9    87.7
1989    89.0    101.0   95.3    82.4    88.8    81.6    86.4    88.1

1990    90.2     99.7   95.5    83.6    89.4    83.8    87.5    90.4
1991    91.3     96.5   94.5    82.6    88.3    85.7    87.4    94.6
1992    94.8     98.0   96.7    85.7    89.3    87.5    88.7    96.8
1993    95.4     98.7   97.1    88.5    91.8    89.7    91.1    96.6
1994    96.6    100.4   98.2    92.8    95.6    92.5    94.6    96.2

1995    97.3     99.8   98.4    95.8    98.0    96.0    97.3    97.5
1996   100.0    100.0  100.0   100.0   100.0   100.0   100.0   100.0
1997   102.2    100.3  101.2   105.2   103.5   104.9   104.0   101.9
1998   105.0     99.3  102.5   110.5   106.1   111.3   107.9   105.8
1999   107.7     98.2  103.4   115.7   109.0   117.9   111.9   109.7

2000   111.0     96.6  105.0   120.4   110.1   124.5   114.7   114.8
2001   112.4     92.8  103.9   120.2   109.5   129.6   115.7   121.1

See footnotes following table 4.
Source: Bureau of Labor Statistics
Table 2. Private nonfarm business sector: Productivity and related measures, 1948-2001

Indexes 1996=100

       Output                                          Combined              
       per     Output  Multi-                          units of              
       hour    per     factor                  Capital capital Capital       
       of all  unit of Product-        Labor   Serv-   and     per hour of   
Year   persons capital ivity2  Output3 Input4  ices5   labor6  all persons   

1948    35.1    118.4   56.4    18.0    44.1    15.2    31.8    29.7
1949    36.7    115.2   57.6    17.9    42.2    15.6    31.2    31.8

1950    39.1    121.7   61.1    19.7    43.7    16.2    32.3    32.2

1955    44.6    126.4   66.5    24.4    48.6    19.3    36.7    35.3

1960    48.7    121.9   69.4    27.2    50.1    22.3    39.2    39.9

1965    58.6    133.1   80.0    35.5    55.4    26.6    44.3    44.0
1966    60.7    134.5   82.3    38.0    57.2    28.3    46.2    45.1
1967    61.8    128.8   82.2    38.7    57.1    30.0    47.0    47.9
1968    63.7    129.7   84.4    40.8    58.2    31.4    48.3    49.1
1969    63.8    126.7   83.6    42.0    60.1    33.1    50.2    50.4

1970    64.9    120.5   83.1    41.9    59.3    34.8    50.5    53.8
1971    67.6    119.8   85.6    43.6    58.9    36.3    50.9    56.4
1972    69.9    122.4   88.2    46.6    60.9    38.1    52.8    57.1
1973    72.1    124.1   90.7    50.0    63.3    40.3    55.2    58.1
1974    71.0    115.6   87.4    49.2    63.7    42.6    56.3    61.5

1975    73.0    109.1   87.6    48.4    60.9    44.3    55.2    66.9
1976    75.8    113.2   91.1    51.9    62.8    45.9    57.0    66.9
1977    76.9    114.9   92.4    54.9    65.4    47.7    59.3    66.9
1978    77.8    117.0   93.7    58.4    68.8    49.9    62.3    66.5
1979    77.5    114.6   93.1    60.3    71.1    52.6    64.8    67.6

1980    77.3    107.6   91.0    59.6    70.7    55.4    65.5    71.8
1981    78.3    104.2   90.5    60.8    71.7    58.4    67.2    75.1
1982    78.0     96.7   87.5    59.0    70.6    61.0    67.4    80.7
1983    81.4     99.2   90.6    62.8    72.3    63.3    69.3    82.0
1984    83.2    102.6   93.0    68.1    76.7    66.4    73.3    81.1

1985    84.4    101.4   93.4    70.8    78.8    69.8    75.8    83.3
1986    87.1    100.7   94.8    73.5    79.8    73.0    77.6    86.5
1987    87.5    100.5   94.9    76.2    82.5    75.8    80.3    87.0
1988    88.6    101.7   95.6    79.7    85.9    78.3    83.4    87.1
1989    89.3    102.0   95.8    82.4    88.5    80.8    86.0    87.6

1990    90.3    100.4   95.8    83.5    89.2    83.2    87.2    89.9
1991    91.4     97.0   94.8    82.5    87.9    85.1    87.0    94.3
1992    94.8     98.2   96.7    85.5    89.0    87.0    88.4    96.5
1993    95.3     99.0   97.2    88.4    91.8    89.4    91.0    96.3
1994    96.5    100.4   98.2    92.6    95.4    92.2    94.3    96.1

1995    97.5    100.0   98.6    95.8    97.8    95.8    97.2    97.6
1996   100.0    100.0  100.0   100.0   100.0   100.0   100.0   100.0
1997   102.0    100.0  101.0   105.1   103.6   105.1   104.1   101.9
1998   104.7     99.0  102.2   110.5   106.4   111.7   108.1   105.8
1999   107.1     97.6  102.9   115.7   109.5   118.5   112.4   109.7

2000   110.3     95.9  104.4   120.2   110.6   125.4   115.2   115.0
2001   111.6     92.0  103.3   120.1   110.1   130.5   116.3   121.3

See footnotes following table 4.
Source: Bureau of Labor Statistics
Table 3. Private business sector: Productivity and related measures, 1949-2001

Percent change

       Output                                          Combined              
       per     Output  Multi-                          units of              
       hour    per     factor                  Capital capital Capital       
       of all  unit of Product-        Labor   Serv-   and     per hour of   
Year   persons capital ivity2  Output3 Input4  ices5   labor6  all persons   

1949    3.5    -2.8     1.2    -0.2    -3.3     2.7    -1.4     6.5

1950    8.8     5.9     7.3    10.1     2.0     3.9     2.6     2.7

1955    4.6     5.1     4.7     8.5     3.9     3.2     3.7    -0.4

1960    1.9    -0.9     0.6     1.8     0.5     2.8     1.2     2.8

1965    3.6     2.3     3.2     7.0     3.2     4.7     3.7     1.3
1966    4.1     1.1     3.1     6.8     2.6     5.7     3.6     3.0
1967    2.2    -3.8     0.1     1.9    -0.2     5.9     1.7     6.3
1968    3.2     0.7     2.6     5.1     1.6     4.4     2.5     2.5
1969    0.5    -1.9    -0.5     3.0     2.9     5.1     3.6     2.5

1970    2.2    -4.5    -0.2     0.0    -1.7     4.7     0.2     7.0
1971    4.4    -0.3     3.2     3.9    -0.8     4.2     0.7     4.7
1972    3.3     2.3     2.9     6.7     3.4     4.3     3.7     0.9
1973    3.2     1.3     2.7     7.0     3.5     5.7     4.2     1.9
1974   -1.6    -6.6    -3.6    -1.6     0.7     5.3     2.1     5.3

1975    3.5    -4.6     0.9    -1.0    -4.4     3.8    -1.9     8.6
1976    3.7     3.6     3.8     6.9     2.9     3.2     3.0     0.1
1977    1.6     1.7     1.6     5.7     4.0     3.9     4.0    -0.1
1978    1.1     1.8     1.2     6.2     5.2     4.3     4.9    -0.7
1979   -0.1    -1.7    -0.4     3.3     3.1     5.1     3.7     1.6

1980   -0.3    -5.9    -2.3    -1.2    -0.6     5.0     1.1     6.0
1981    2.0    -2.2     0.2     2.7     1.5     5.0     2.6     4.3
1982   -0.2    -6.7    -3.0    -2.9    -1.7     4.2     0.1     7.1
1983    3.5     2.1     2.8     5.4     2.3     3.2     2.6     1.3
1984    2.9     4.0     3.2     8.9     6.0     4.8     5.6    -1.0

1985    2.1    -0.5     1.1     4.3     2.4     4.8     3.2     2.6
1986    3.1    -0.5     1.6     3.7     1.1     4.3     2.1     3.6
1987    0.6     0.2     0.3     3.6     3.3     3.4     3.3     0.4
1988    1.2     1.2     0.7     4.3     3.9     3.0     3.6     0.0
1989    1.0     0.6     0.6     3.5     2.9     3.0     3.0     0.5

1990    1.3    -1.2     0.1     1.5     0.7     2.7     1.3     2.6
1991    1.2    -3.3    -1.0    -1.1    -1.2     2.2    -0.1     4.7
1992    3.8     1.5     2.3     3.7     1.1     2.1     1.4     2.3
1993    0.6     0.7     0.5     3.2     2.9     2.5     2.7    -0.1
1994    1.3     1.7     1.1     4.9     4.1     3.1     3.8    -0.4

1995    0.8    -0.6     0.3     3.2     2.5     3.8     2.9     1.4
1996    2.8     0.2     1.6     4.4     2.1     4.2     2.8     2.5
1997    2.2     0.3     1.2     5.2     3.5     4.9     4.0     1.9
1998    2.7    -1.0     1.3     5.0     2.5     6.1     3.7     3.8
1999    2.6    -1.1     0.9     4.7     2.7     5.9     3.7     3.7

2000    3.0    -1.5     1.5     4.0     1.0     5.6     2.5     4.6
2001    1.3    -4.0    -1.0    -0.1    -0.6     4.0     0.9     5.5

See footnotes following table 4.
Source: Bureau of Labor Statistics
Table 4. Private nonfarm business sector: Productivity and related measures, 1949-2001

Percent change

       Output                                          Combined              
       per     Output  Multi-                          units of              
       hour    per     factor                  Capital capital Capital       
       of all  unit of Product-        Labor   Serv-   and     per hour of   
Year   persons capital ivity2  Output3 Input4  ices5   labor6  all persons   

1949    4.5    -2.6     2.0     0.0    -4.2     2.7    -2.0     7.3

1950    6.7     5.6     6.0    10.0     3.6     4.2     3.8     1.0

1955    4.7     5.1     4.7     8.9     4.2     3.6     4.0    -0.4

1960    1.3    -1.3     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     1.1     2.9     7.2     3.3     6.1     4.2     2.5
1967    1.8    -4.2    -0.1     1.7    -0.2     6.2     1.8     6.3
1968    3.2     0.7     2.6     5.4     1.8     4.7     2.7     2.5
1969    0.1    -2.3    -0.9     3.0     3.3     5.5     4.0     2.5

1970    1.6    -4.9    -0.6    -0.1    -1.3     5.0     0.5     6.8
1971    4.2    -0.6     3.0     3.9    -0.7     4.4     0.8     4.8
1972    3.4     2.1     3.0     7.0     3.4     4.7     3.8     1.2
1973    3.2     1.4     2.8     7.4     3.9     5.9     4.5     1.8
1974   -1.5    -6.9    -3.6    -1.6     0.6     5.7     2.1     5.7

1975    2.8    -5.6     0.2    -1.8    -4.4     4.1    -2.0     8.9
1976    3.8     3.8     4.0     7.4     3.1     3.4     3.2     0.0
1977    1.5     1.5     1.4     5.7     4.2     4.1     4.2     0.0
1978    1.3     1.8     1.4     6.5     5.2     4.6     5.0    -0.5
1979   -0.4    -2.0    -0.7     3.2     3.3     5.3     3.9     1.6

1980   -0.3    -6.1    -2.3    -1.2    -0.5     5.3     1.2     6.2
1981    1.3    -3.2    -0.6     2.1     1.5     5.4     2.6     4.6
1982   -0.4    -7.2    -3.3    -3.1    -1.6     4.5     0.2     7.4
1983    4.4     2.6     3.6     6.5     2.4     3.7     2.8     1.7
1984    2.3     3.4     2.6     8.5     6.2     4.9     5.8    -1.1

1985    1.4    -1.2     0.4     3.9     2.7     5.2     3.5     2.6
1986    3.1    -0.7     1.5     3.9     1.3     4.6     2.3     3.9
1987    0.4    -0.2     0.1     3.6     3.4     3.8     3.5     0.6
1988    1.3     1.3     0.7     4.6     4.1     3.3     3.8     0.0
1989    0.8     0.2     0.3     3.4     3.0     3.1     3.1     0.5

1990    1.1    -1.5    -0.1     1.4     0.8     2.9     1.5     2.7
1991    1.3    -3.5    -1.0    -1.2    -1.4     2.4    -0.2     4.9
1992    3.6     1.3     2.0     3.6     1.2     2.3     1.5     2.3
1993    0.6     0.8     0.5     3.5     3.1     2.7     3.0    -0.2
1994    1.3     1.5     1.0     4.7     3.9     3.2     3.7    -0.2

1995    1.0    -0.5     0.5     3.4     2.5     3.9     3.0     1.5
1996    2.5     0.0     1.4     4.4     2.2     4.3     2.9     2.5
1997    2.0     0.0     1.0     5.1     3.6     5.1     4.1     1.9
1998    2.6    -1.1     1.2     5.1     2.7     6.3     3.8     3.8
1999    2.4    -1.3     0.7     4.7     2.9     6.1     3.9     3.7

2000    2.9    -1.8     1.4     3.9     1.0     5.8     2.5     4.8
2001    1.2    -4.0    -1.0    -0.1    -0.4     4.1     1.0     5.5

See footnotes following table 4.
Source: Bureau of Labor Statistics
                        Footnotes, Tables 1-4

Source:  Output data are from the Bureau of Economic Analysis (BEA), 
U.S. Department of Commerce, and 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.  See also 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 the 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. 
Table 5. Real capital input by asset type, private business, 1948-2001

Average annual growth rates (percent)


                        1948-   1948-   1973-   1979-   1990-   1995-   2000-
                        2001    1973    1979    1990    1995    2000    2001

All Assets               3.9     3.7     4.3     3.9     2.7     5.4     4.0

  Equipment              5.9     5.5     6.9     5.6     4.4     9.1     6.8

    All Information     11.7     9.8    13.3    14.5     8.5    16.6    11.6
    equipment & software

      Computers &       28.3    25.3    35.8    33.2    14.6    40.2    23.7
      related equipment

      Software          20.7    27.7    13.2    16.0    13.4    16.4    10.5

      Communications     8.7    10.0     7.9     8.2     4.0     8.5    10.0
      equipment

      Other IPES         6.2     6.8    11.0     5.9     3.2     2.8     1.3

    All other equipment  3.8     4.8     5.1     1.8     1.7     4.0     3.1

  Structures             3.0     3.2     3.0     3.6     1.9     2.2     2.1

  Residential rental     2.2     2.8     2.6     1.9     0.6     1.3     1.4
  capital

  Inventories            3.5     4.2     3.5     2.2     2.6     4.5     0.4

  Land                   2.0     2.0     2.3     2.6     1.0     1.8     1.5

Source: Bureau of Labor Statistics

Note: For a brief discussion of methods used in preparing these data,
see Summary of Methods in this release.
Table 6. Real capital input by asset type, private nonfarm business, 1948-2001

Average annual growth rates (percent)


                        1948-   1948-   1973-   1979-   1990-   1995-   2000-
                        2001    1973    1979    1990    1995    2000    2001

All Assets               4.1     4.0     4.5     4.3     2.9     5.5     4.1

  Equipment              6.1     5.6     7.0     6.0     4.6     9.2     6.9

    All Information     11.7     9.8    13.3    14.5     8.5    16.6    11.6
    equipment & software

      Computers &       28.3    25.3    35.8    33.2    14.6    40.2    23.7
      related equipment

      Software          20.7    27.7    13.2    16.0    13.3    16.4    10.5

      Communications     8.7    10.0     7.9     8.2     4.0     8.5    10.0
      equipment

      Other IPES         6.2     6.8    11.0     5.9     3.2     2.8     1.2

    All other equipment  3.9     4.9     5.1     2.0     1.9     4.1     3.2

  Structures             3.1     3.3     3.0     3.7     1.9     2.3     2.2

  Residential rental     2.2     2.8     2.6     1.9     0.6     1.3     1.4
  capital

  Inventories            3.7     4.4     3.7     2.4     2.6     4.6     0.4

  Land                   2.7     2.8     3.3     3.5     1.1     2.0     1.6

Source: Bureau of Labor Statistics

Note: For a brief discussion of methods used in preparing these data,
see Summary of Methods in this release.