Productivity Increases As Manufacturers Reduce Costs

The Bureau of Labor Services reported the preliminary productivity changes  in manufacturing for the second quarter of 2009:

5.3 percent gain in manufacturing;

3.9 percent gain in durable goods manufacturing;

2.0 percent gain in nondurable goods manufacturing.

According to the BLS, “The increases in productivity in all manufacturing sectors were the result of hours falling faster than output. Manufacturing includes about 11 percent of U.S. business-sector employment.

Bureau of Labor Statistics

Bureau of Labor Statistics

Productivity is defined as output per hour worked.

The 5.3 percent gain in manufacturing productivity is reported to be the largest quarterly gain in this indicator since the first quarter of 2005, when output per hour increased at a 7.3 percent annual rate.  Over the last four quarters, manufacturing productivity declined 1.3 percent, as a 15.0 percent drop in output was largely offset by a 13.9 percent decline in hours worked…  For the entire 2000-2008 period manufacturing productivity increased at a 3.3 percent annual rate.
The BLS declining hours data  for manufacturing is  approximately double that of  the precision machining industry. PMPA’s Length of First Shift declined 7.9%  by the end of the second quarter compared to the BLS’s “hours worked decreased 14.4 percent ” figure for manufacturing in the second quarter.

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