Manufacturing Productivity Growth Outpaces Rest Of Business Economy

ByJohn S. McClenahen On a seasonally adjusted annual basis, productivity growth in manufacturing during the third quarter of this year was higher than productivity growth in both the business and nonfarm business sectors of the U.S. economy. Overall, productivity in manufacturing increased 4.3%, with productivity rising 5% among durable-goods manufacturers and 4.3% among nondurable-goods producers, the U.S. Labor Department reported on Nov. 4. In contrast, productivity rose 2.3% in the business sector and 1.9% in the nonfarm business sector. However, manufacturing's overall gain from July through September was only about half the 8.3% rate of productivity growth recorded during this year's second quarter. "Nonfarm productivity did slow in [the third quarter] as expected, to an annualized rate of 1.9%, from a sharply upwardly revised 3.9% in [the second quarter]," notes Merrill Lynch & Co. senior economist Kathy Bostjancic. "However, given we are in the third year of an economic recovery, productivity remains very sturdy, with the year-on-year pace at 3.1%."