Labor productivity – defined as output per hour – rose in 53 percent of detailed manufacturing industries in 2007, the U.S. Bureau of Labor Statistics reported. This was about unchanged from the proportion that recorded productivity increases the previous year. Unit labor costs declined in 19 percent of the industries.

Output fell and hours declined in more industries in 2007 than in 2006. Output fell in 58 percent of the 86 4-digit NAICS industries in 2007 and hours fell in 63 percent. More industries experienced sharp increases or large declines in productivity in 2007 than in the previous year. Productivity rose by 10 percent or more in ten industries and declined by 10 percent or more in nine industries. Two of the ten largest detailed industries by employment size – aerospace products and parts manufacturing and semiconductors and electronic components manufacturing – posted double-digit output and productivity growth in 2007.

Unit labor costs fell in 16 of the 86 manufacturing industries in 2007. Unit labor costs reflect the total labor costs required to produce a unit of output. Increases in labor productivity help to offset increases in hourly compensation and thus limit increases in unit labor costs.

Over the longer 1987-2007 period, labor productivity increased in over 95 percent of the detailed manufacturing industries.

Productivity rose in a higher proportion of the more aggregate industries. In 2007 labor productivity increased in 13 of the 21 3-digit NAICS manufacturing industries. Productivity rose the fastest in primary metals manufacturing and in computer and electronic products manufacturing, two industries where output increased rapidly but hours fell. In contrast, a very large drop in output combined with a much smaller drop in labor hours resulted in a large productivity decline in apparel manufacturing. Unit labor costs fell in 2 of the aggregate industries in 2007: primary metals manufacturing and transportation equipment manufacturing.

Between 1987 and 2007, productivity rose in all but one of the 21 aggregate industries. The only industry to decline was apparel manufacturing, as output fell more rapidly than hours.

Year-to-year movements in industry productivity measures may be erratic, particularly in smaller industries. The annual measures based on sample data may differ from measures generated by a census of establishments in the industry. Annual changes in an industry’s output and use of labor may reflect cyclical changes in the economy as well as long-term trends. As a result, long-term productivity changes tend to be more reliable indicators of industry performance than are year-to year changes.