Productivity Continued to Increase in Many Industries during 1984

By Herman, Arthur S. | Monthly Labor Review, March 1986 | Go to article overview
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Productivity Continued to Increase in Many Industries during 1984


Herman, Arthur S., Monthly Labor Review


Productivity continued to increase in many industries during 1984

Productivity, as measured by output per employee hour, grew in 1984 in about three quarters of the industries for which the Bureau of Labor Statistics regularly publishes data. Productivity increases were large in many industries. In a significant number, these gains followed major productivity growth in 1983. The expansion in industry productivity is consistent with the situation in the nonfarm business sector of the economy in which output per hour increased 1.6 percent between 1983 and 1984, after gaining 3.4 percent in 1982-83. Table 1 shows productivity trends in industries measured by the Bureau and includes new measures introduced for additional industries: barber and beauty shops; metal doors, sash and trim; metal stampings; and oilfield machinery.1

Changes in manufacturing

Among important manufacturing industries, productivity in the steel industry grew 13.0 percent in 1984. This large gain was in addition to the record productivity advance of 28.5 percent in 1983. Steel output increased more than 13 percent in 1984, due in part to continued demand from such key markets as motor vehicles, appliances, and construction. Employee hours rose only slightly and employment continued to decline, as the industry continued restructuring and the closing of inefficient facilities. The motor vehicles industry had an above average productivity gain of 4.6 percent, in addition to an unusually large gain in the previous year (13.1 percent). Output in this industry was up more than 21 percent in 1984, as demand for all types of motor vehicles expanded, while hours increased almost 16 percent.

Other important manufacturing industries with large gains included steel foundries with a productivity increase of more than 11 percent, while gray iron foundries attained an increase of more than 9 percent in 1984. Output in these industries rose in 1984 as demand from the automobile, construction, and railroad industries expanded. The tire industry posted an 11.3-percent productivity gain in 1984, following a 6.2-percent gain in 1983. Output grew by 14.3 percent in 1984 as demand was up for both original equipment and replacement tires, while hours rose only slightly. In petroleum refining, productivity moved up 10.9 percent in 1984, after gaining 3.0 percent in 1983. Refinery output increased for the first time since 1978, while hours declined, as small refineries contined to close. Other significant manufacturing industries with large productivity gains included malt beverages (10.5 percent), metal cans and primary aluminum (both 10.1 percent), and household cooking equipment (9.7 percent).

A few manufacturing industries registered productivity declines in 1984. These included pharmaceutical preparations (-5.2 percent), hardwood veneer and plywood (-4.8 percent), structural clay products (-3.9 percent), and folding paperboard boxes (-2.6 percent). Although output was up in all of these industries, except for pharmaceuticals where it fell slightly, employee hours rose even more, resulting in the productivity falloff.

Mining

All of the mining industries experienced productivity gains in 1984. Coal mining, the largest mining industry, posted a gain of 10.1 percent in 1984, on top of a 14.2-percent rise in 1983. Coal output was up 14.4 percent in 1984 in anticipation of a strike which did not occur, while hours rose 3.9 percent. Productivity in iron mining (usable ore) increased 25.3 percent, compared with a 41.1-percent gain the previous year. Output was up 36.9 percent in 1984 as demand increased from the steel industry, while hours rose 9.3 percent. Copper mining (recoverable metal) had a productivity gain of 17.6 percent, after a 12.7-percent increase in 1983. Output was up only 5.1 percent in 1984, because of low copper prices, while hours dropped 10.6 percent, as only the most efficient mines were operating.

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