Private nonfarm business sector multifactor productivity decreased 1.7% in 2020, the largest decline since the Great Recession period of 2007–2009. This 2020 decrease reflects a 4.2% decrease in output and a 2.5% decrease in the combined inputs of capital and labor.
Capital services increased by 2.4% and labor input —which is the combined effect of hours worked and labor composition — decreased by 5.2% in 2020.
Multifactor productivity in the private nonfarm business sector grew at an average annual rate of 0.7% from 1987 to 2020, as output increased by 2.7% and combined inputs for capital and labor increased by 1.9%.
These data are from the Multifactor Productivity program. To learn more, see “Multifactor Productivity Trends — 2020.” Multifactor productivity is calculated by dividing an index of real output by an index of combined units of labor input and capital services. Unlike BLS quarterly labor productivity (output per hour worked) measures, multifactor productivity measures include the influences of capital services and shifts in the composition of the workforce.