Manufacturing sector productivity rose 0.2% in the second quarter of 2012, as output grew 1.7% and hours worked increased 1.4%, the U.S. Bureau of Labor Statistics reported today.
Over the last four quarters, BLS noted, manufacturing productivity increased 2.9%, as output increased 5.6% and hours rose 2.6%. Unit labor costs in manufacturing rose 0.3% in the second quarter of 2012 and decreased 2.9% from the same quarter a year ago.
Overall, nonfarm business sector labor productivity increased at a 1.6% annual rate during the second quarter of 2012, BLS reported. The increase in productivity reflects increases of 2.0% in output and 0.4% in hours worked. From the second quarter of 2011 to the second quarter of 2012, productivity increased 1.1% as output and hours worked rose 2.9% and 1.8%, respectively.
"The reading was in line with the forecast and vastly outperformed consensus expectations of only a modest gain in productivity," noted Arijit Dutta of Moody's Analytics. "Revisions to the data show productivity growth was substantially stronger in 2011 than previously reported, partly explaining why businesses have not hired in large numbers during the recovery."
Measures of manufacturing output were revised back to 1987 to reflect revised data from the U.S. Department of Commerce, BLS announced. In manufacturing, productivity growth in the first quarter 0f 2012 was 5.5%, as output growth was revised up and hours were revised down. Unit labor costs declined 0.4%, rather than decreasing 4.9% as previously reported.
For 2011, nonfarm business productivity growth was 0.7%, an upward revision from the previous estimate of 0.4%. Unit labor costs increased 2.0%, a larger increase than reported June 6. Manufacturing productivity remained at the previously reported 2.5% increase. The 0.1% increase in unit labor costs was more than the 1.0% decline published June 6, due to an upward revision to hourly compensation.
Over the most recent 10-year period (2001-2011), BLS noted, manufacturing productivity grew at an annual average rate of 3.3% while nonfarm business productivity increased at an average annual rate of 2.2%.