Academic journal article Monthly Labor Review

Apparel Stores Display Above-Average Productivity

Academic journal article Monthly Labor Review

Apparel Stores Display Above-Average Productivity

Article excerpt

Output per hour of all persons in the retail apparel store industry increased at an average annual rate of 2.9 percent between 1967 and 1983, compared with an average annual rate of 1.2 percent for the total nonfarm business sector of the economy during the same period. This gain in productivity over the 16-year period reflects average annual increases of 4.5 percent in output and 1.5 percent in hours of all persons in the apparel store industry. (See table 1.)

Productivity trends can be divided into two periods, 1967-77 and 1977-83. During the first period, productivity rose at an average annual rate of 2.8 percent, and in the latter period, it accelerated to 3.6 percent, reflecting average growth in output and little increase in hours.

During the 1967-77 period, productivity advances were not steady; in 1972 and 1973, there were relatively large increases. In 1972, productivity rose 8.2 percent as output increased 6.3 percent and hours declined 1.8 percent. In 1973, output advanced 11.3 percent, while hours increased only 1.7 percent, resulting in a productivity increase of 9.5 percent. However, there were moderate productivity declines in 1967, 1970, 1974, 1976, and 1977. Output experienced only two declines during the period, falling in the recession years of 1970 and 1974. In 1969, 1976, and 1977, increases in hours exceeded increases in output, resulting in the productivity falloffs.

During the 1977-83 period, there were no productivity declines, and only one small output decline in 1982. In 1978, output per hour rose 10.0 percent based on very strong growth in output of 13.4 percent and moderate gains in hours of 3.1 percent. Output recorded moderate growth in 1980 and above-average growth in 1981 (6.1 percent), while industry hours declined in 1980 and 1982. Productivity had above-average gains in 1980 and 1981. Trends in four subindustries

The retail apparel store industry consists of several subindustries. In addition to productivity measures for the total industry, separate measures are presented for men's and boys' clothing and furnishing stores, women's ready-to-wear stores, family clothing stores, and shoe stores. (See table 2.)

Men's and boys' apparel stores. Productivity grew moderately in the men's and boys' apparel store industry, accounting for 15 percent of total sales and 11 percent of total employment in 1983. Output per hour grew at an annual average rate of 2.5 percent between 1967 and 1983, reflecting average annual growth in output of 1.8 percent and an average annual decline of 0.6 percent in hours.

Productivity grew at an annual rate of 3.8 percent between 1977 and 1983 compared with a 2.2-percent increase in 1967-77. This gain reflected a slowing of the increase in output from a rate of 2.9 percent between 1967 and 1977 to an average decline of 0.4 percent between 1977 and 1983. Hours declined at a rate of 4.1 percent from 1977 to 1983 compared with a small average gain of 0.7 percent in the preceding period. Among apparel stores, this subindustry alone showed a definite trend toward fewer number of stores.

Among the retail apparel subindustries, men's and boys' apparel stores had the slowest output growth between 1967 and 1983. This subindustry was also the most cyclical, experiencing output declines in 1970, 1974, and 1980-83.

Women's ready-to-wear-stores. This subindustry, the largest, accounting for 36 percent of sales and 33 percent of employment in 1983, experienced the highest gain in productivity among those measured. Output per hour rose at an average annual rate of 4.4 percent from 1967 to 1983 as output increased 5.5 percent and all person hours grew 1.1 percent annually.

Between 1967 and 1977, productivity increased at an average annual rate of 4.3 percent, while output grew 5.6 percent and hours 1.3 percent. In the 1977-83 period, productivity growth increased to 6.3 percent annually reflecting average annual output gains of 5. …

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