Labor productivity, defined as output per hour, rose in 66 percent of the detailed service-providing and mining industries in 2007, about the same as in 2006. Unit labor costs, which reflect hourly compensation and productivity, rose in 70 percent of the industries, compared to 76 percent in 2006.

Over the longer period, 1987 to 2007, labor productivity increased in 86 percent of the industries studied. Unit labor costs rose in 78 percent of the industries.

2006-2007 change

In 2007, output per hour increased in 31 of the 45 detailed service-providing industries and in two of the five detailed mining industries studied. Output rose in 66 percent of the industries in 2007, while labor hours declined in 48 percent.

Among the largest industries included, those with employment over one million, productivity rose 0.9 percent in commercial banking (NAICS 52211) and 5.4 percent in janitorial services (NAICS 56172), but declined 1.8 percent in traveler accommodation (NAICS 7211); 1.4 percent in full-service restaurants (NAICS 7221); and 0.9 percent in automotive repair and maintenance (NAICS 8111). The limited-service eating places industry (NAICS 7222) had no change in productivity.

Three service-providing industries recorded productivity growth greater than fifteen percent in 2007: video tape and disc rental (NAICS 53223), 26.5 percent; bowling centers (NAICS 71395), 19.7 percent; and passenger car rental (NAICS 532111), 16.8 percent. Each of these industries posted large reductions in hours. Productivity fell most, 11.4 percent, in diagnostic imaging centers (NAICS 621512), due mostly to a rapid rise in hours.

Labor productivity fell 6.4 percent in the overall mining sector (NAICS 21), led by a large productivity decline of 15.4 percent in metal ore mining (NAICS 2122), where hours rose rapidly.

Unit labor costs rose in two-thirds of the service-providing industries and in all of the mining industries in 2007. Declines in unit labor costs were greatest in the two industries with the largest productivity increases: video tape and disc rental (NAICS 53223) and bowling centers (NAICS 71395), where unit labor costs fell by 9.2 and 6.9 percent, respectively.

Long-term trends

Between 1987 and 2007, labor productivity increased in 38 of the 45 detailed service-providing industries and in all of the covered mining industries. Software publishers (NAICS 5112) recorded the greatest productivity growth over the period, 15.6 percent per year on average, followed by wireless telecommunications carriers (NAICS 5172), with average yearly growth of 9.4 percent.

Unit labor costs increased in 78 percent of the detailed service-providing industries and in all but one mining industry from 1987 to 2007. Unit labor costs grew most rapidly in oil and gas extraction (NAICS 2111), 5.9 percent per year on average. The most rapid declines in unit labor costs occurred in the two industries with the fastest productivity growth, with software publishers (NAICS 5112) declining 8.9 percent and wireless telecommunications carriers (NAICS 5172) falling 6.0 percent.