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Private nonfarm business total factor productivity increased 0.7 percent in 2023
April 05, 2024
Private nonfarm business total factor productivity increased 0.7 percent in 2023, reflecting a 2.6-percent increase in output and a 1.9-percent increase in the combined inputs of capital and labor. The 2023 growth in total factor productivity was in close range with the average annual growth experienced in the pre-pandemic 2011–19 period.
Over-the-year percent changes in total factor productivity and related measures, private nonfarm business sector, 2003–2023
Year
Total factor productivity
Real value-added output
Combined inputs
Capital input
Labor input
Hours worked
Labor composition
2003
2.2
3.1
0.9
2.9
-0.1
-0.6
0.5
2004
2.3
4.3
2.0
2.8
1.6
1.3
0.3
2005
1.5
4.0
2.4
3.5
1.9
1.7
0.2
2006
0.3
3.4
3.1
3.7
2.7
2.3
0.4
2007
0.3
2.4
2.0
3.4
1.3
0.6
0.7
2008
-1.0
-0.9
0.1
2.9
-1.5
-2.3
0.8
2009
0.3
-3.6
-3.8
1.1
-6.6
-7.6
1.1
2010
2.6
3.3
0.7
1.1
0.4
0.0
0.3
2011
-0.4
2.1
2.5
1.7
2.9
2.3
0.6
2012
0.7
3.4
2.6
2.0
3.0
2.6
0.4
2013
0.4
2.7
2.3
2.3
2.3
1.9
0.4
2014
0.7
3.5
2.8
2.9
2.7
2.5
0.1
2015
0.8
3.8
3.0
3.0
2.9
2.4
0.5
2016
-0.1
2.0
2.2
3.1
1.6
1.3
0.3
2017
0.6
3.0
2.3
3.0
1.9
1.7
0.3
2018
0.6
3.4
2.8
3.0
2.6
2.0
0.6
2019
1.3
3.1
1.7
3.1
0.8
0.5
0.3
2020
-0.2
-2.8
-2.5
2.6
-5.6
-8.2
2.8
2021
3.2
7.3
3.9
2.3
5.0
5.9
-0.9
2022
-1.6
2.0
3.7
2.8
4.3
4.1
0.1
2023
0.7
2.6
1.9
2.8
1.2
1.3
-0.1
Capital input growth continued to accelerate since the 2.3-percent growth experienced in 2021, growing 2.8 percent in both 2022 and 2023.
In 2023, labor input increased 1.2 percent, as hours worked rose 1.3 percent and labor composition, which estimates the effect of shifts in the age, education, and gender composition of the workforce, fell 0.1 percent. The 1.3-percent increase in hours worked comes after higher hours worked growth rates of 5.9 percent in 2021 and 4.1 percent in 2022. Despite the 0.1-percent decrease in 2023, labor composition remained above pre-pandemic levels representing a shift towards older and more educated employees.
These data are from the Productivity program and are subject to revision. See "Total Factor Productivity — 2023" to learn more. Also see more data on productivity and costs. Total factor productivity is calculated by dividing an index of real output by an index of combined units of labor input and capital input. Total factor productivity annual measures differ from BLS quarterly labor productivity (output per hour worked) measures because total factor productivity includes the influences of capital input and shifts in the composition of workers. Measures for the most recent year of this release are preliminary estimates.
United States Department of Labor
