Manufacturing Productivity Outperforms Rest Of Economy

The manufacturing sector of the U.S. economy significantly outperformed both the business and nonfarm business sectors of the economy in 2005's final quarter, according to revised U.S. Labor Department data released on Mar. 7. Productivity among manufacturers grew 4.7% during the last three months of 2006; productivity was unchanged for the overall business sector, and productivity actually declined half a percentage point in the nonfarm business sector.

"Responding to ever-intensifying global competition, [U.S.] manufacturers have developed sophisticated production processes that result in long-term improvements in productivity," says Thomas J. Duesterberg, president and CEO of the Manufacturers Alliance, an Arlington, Va.-based business and public policy research group. "Rising demand in the fourth quarter was met by an increase in hours as well as better productivity. As a result, unit labor costs for manufacturers actually fell by 2.8%, helping domestic suppliers to remain globally competitive."

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