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Q1 Productivity and costs released

Manufacturing News, Source : The Manufacturer US
Published : 06 Jun 2007 22:09

The Bureau of Labor Statistics of the U.S. Department of Labor today reported revised productivity data--as measured by output per hour of all persons--for the first quarter of 2007.

In manufacturing, the revised productivity changes in the first quarter were:

2.4 percent in manufacturing,

2.2 percent in durable goods manufacturing, and

1.8 percent in nondurable goods manufacturing.

Manufacturing productivity growth was slower in the first quarter of 2007 than reported on May 3, reflecting downward revisions to output per hour

in both durable goods and nondurable goods industries. Output and hours in manufacturing, which includes about 12 percent of U.S. business-sector employment, tend to vary more from quarter to quarter than data for the aggregate business and nonfarm business sectors.

Productivity grew at a 2.4-percent annual rate in the manufacturing sector during the first quarter of 2007, the joint effect of a 1.2-percent increase in output and a 1.1-percent decrease in hours. The 2.2-percent productivity gain in durable goods industries in the first quarter was due entirely to a 2.5-percent drop in hours worked, as output also declined, by 0.4 percent. Output per hour rose 1.8 percent in nondurable goods industries as output and hours both increased, by 3.1 percent and 1.3 percent, respectively.

Hourly compensation in manufacturing grew 6.9 percent during the first quarter of 2007, following a gain of 11.8 percent one quarter earlier, as

revised. Hourly compensation rose 8.5 percent in durable goods industries and 4.3 percent in nondurable goods industries. Real hourly compensation, which takes into account changes in consumer prices, increased 3.0 percent for all manufacturing workers, as a 4.5-percent rise in durable manufacturing real hourly compensation combined with a 0.4-percent rise in the nondurable

goods industries.

Unit labor costs rose 4.5 percent in manufacturing during the first quarter of 2007.

In durable goods industries, where hourly compensation increased much faster than productivity, unit labor costs increased 6.2

percent. In nondurable goods industries, unit labor costs rose 2.4 percent during the first quarter of 2007, but when the first quarter of 2007 is

compared to the first quarter of 2006 nondurable manufacturing unit labor costs declined 0.7 percent.

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