US Productivity On The Rise

Just read some good economic news out of the Institute for Corporate Productivity. The majority of US-based managers surveyed recently forecasted that their firm's productivity would increase over the next six months, with only 15% foreseeing a productivity dip and 32% believing it will stay the same in the near future.

This strong productivity focus may already be paying off, suggests data recently released by the US Bureau of Labor Statistics (BLS). In the fourth quarter of 2008, the BLS preliminary report showed that productivity in the non-farm business sector rose 3.2%. For the full year of 2008, productivity rose 2.8%, the highest growth rate since 2004.

Of course, a rise in productivity won't boost employment numbers -- quite the opposite, in fact.

Among those who think productivity will rise, two-thirds of respondents cited improvements in work processes. Nearly one-half (49%) also cited greater effort and engagement on the part of employees, and about the same percentage pointed to more effective workforce management. A little over one-quarter (29%) of participants think that "fewer workers but no reductions in overall production" will improve productivity numbers.

Hopefully we're getting close to wringing the slack out of the system, especially now that everyone realizes how much distortion the financial sector introduced into our economic calculations. Some tough medicine, to be sure, but we could come out of this tough time with a few real benefits, including less dependence on a more strictly regulated financial sector and a stronger focus on actually producing again -- which, paired with our innovative system, could be the model for a leaner, meaner American economy.