Washington has just released detailed new manufacturing labor productivity data, and as with the 2014 numbers (which have been revised), these new 2015 figures show a head-scratching list of out-performers, mediocrities, and laggards. Specifically, the champs include lots of sectors that few would consider “high tech” or “industries of the future” or “knowledge-intensive,” and the mediocrities include many that would be lumped into those glitzy categories.
A reminder – the labor productivity performance measured here is the narrower of the two efficiency gauges tracked by the U.S. Labor Department. It shows the amount of goods and services produced for each hour on the jobs by an American workers. The other measure – multi-factor productivity – as the name implies, measures how much output is created by a group of inputs taken together. The inputs include not only labor but capital, energy, materials, and others.
Earlier this year, Labor reported that labor productivity for the entire manufacturing sector increased by 1.39 percent in 2015. That’s OK by recent standards, but recent standards as poor by historical standards. Here’s a list of the ten sectors that beat this average by the greatest margin:
agricultural chemicals: +11.6 percent
tobacco products: +11.3 percent
industrial machinery: +8.0 percent
miscellaneous furniture-related products: +7.6 percent
paints, coatings, and adhesives: +7.6 percent
miscellaneous non-metallic mineral products: +7.6 percent
sawmill and preserved wood products: +7.4 percent
coating, engraving, and heat-treating materials: +7.4 percent
petroleum and coal products: +7.0 percent
lime and gypsum products: +6.0 percent
I don’t see anything screaming “Silicon Valley” here, do you?
Here’s a list of the ten sectors with the worst productivity growth last year:
household appliances: -10.9 percent
medical equipment and supplies: -6.9 percent
leather and allied products: -8.9 percent
bakeries and tortilla products: -7.3 percent
electrical equipment: -5.9 percent
fabric mill products: -4.6 percent
miscellaneous textile mill products: -4.4 percent
beverages: -4.2 percent
ships and boat-building: -4.1 percent
alumina and aluminum: -3.8 percent
architectural and structural metals: -3.8 percent
Nothing real high tech here, either. But most of the real surprises come from industries practically synonymous with innovation. Many experienced 2015s that were ho hum at best. In particular:
pharmaceuticals and medicines: +3.9 percent
semiconductors and electronic components: +3.4 percent
aerospace products and parts: +1.0 percent
Moreover, their 2015 numbers were worse than their (revised) 2014 performance. Which were as follows:
pharmaceuticals and medicines: +5.7 percent
semiconductors and electronic components: +3.5 percent
aerospace products and parts: +6.6 percent
Lastly, what about that torrid American automotive sector? It hasn’t been remotely torrid in terms of labor productivity growth. In 2014, labor productivity actually sank by 2.2 percent for vehicles but rose by 3.8 percent for parts. The 2015 numbers: a 0.5 percent decrease for vehicles, and a 1.7 percent gain for parts.
As I’ve often reminded, great uncertainty still surrounds the concept of productivity (either version). Here’s what seems a lot more certain. If America’s leaders were the slightest bit familiar with these detailed manufacturing productivity figures, and if they valued the sectors that really generate the greatest productivity growth and all of its unquestioned benefits (like sustainably rising living standards), the nation’s offshoring-happy trade policies of recent decades would look a lot different.