In 2021, there was a notable increase in total factor productivity across various manufacturing sectors, with 78 out of 86 industries experiencing growth in this key economic metric. Several industries stood out with remarkable productivity gains, surpassing 15.0 percent. These included:
- Coating, engraving, and heat treating metals (19.9 percent)
- Clay products and refractories (19.1 percent)
- Cutlery and hand tools (16.2 percent)
- Sugar and confectionery products (15.9 percent)
- Rubber products (15.5 percent)
- Petroleum and coal products (15.3 percent)
However, not all industries shared the same positive trend. Some experienced declines in total factor productivity, with three industries witnessing decreases larger than 5.0 percent. The most significant declines were in:
- Alumina and aluminum production (−5.3 percent)
- Glass and glass products (−5.9 percent)
- Iron and steel mills and ferroalloys (−20.8 percent)
Zooming out to examine the long-term trajectory from 1987 to 2021, total factor productivity demonstrated growth in 64 manufacturing industries. While 2021 was a strong year for productivity, with increases seen in 70 industries, the average annual rates of change in total factor productivity over the long term ranged between −2.0 percent and +2.0 percent per year for most manufacturing sectors.
Notably, only four industries maintained a consistent average annual increase of 2.1 percent or more from 1987 to 2021. These industries were communications equipment, audio and video equipment, semiconductors and electronic components, and computer and peripheral equipment.
It’s important to note that both short-term variations and long-term trends in total factor productivity can be influenced by cyclical shifts in the economy. The ongoing impact of the COVID-19 pandemic significantly affected economic conditions in 2021. Despite this, long-term annual changes in total factor productivity remain reliable indicators of industry performance.
These insights are derived from the Productivity program and can be explored further in the report titled “Total Factor Productivity for Detailed Industries — 2021.” Total factor productivity is a critical measure that assesses the efficiency of an industry by evaluating its output relative to the combined inputs of labor, capital, and intermediate inputs, including energy, materials, and purchased services.
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