Manufacturing Productivity Still Rising Steadily
7. March 2013
According to the latest data revisions released by the Bureau of Labor Statistics, manufacturing productivity increased by an annualized 2.1% in the fourth quarter of 2012. This is a much stronger increase in manufacturing productivity than the 0.5% rise that was initially reported last month. Durables manufacturing productivity rose 2.7%, while nondurables productivity growth registered a 1.7% increase. For 2012 as a whole, manufacturing productivity increased by a healthy 1.9%. This followed a gain of 2.0% in 2011. If our economy can sustain annual productivity increases of 2% or better over the long run, then living standards for our citizens will also improve at a satisfactory rate.
Rising productivity means that U.S. manufacturers are becoming more competitive in the global marketplace. It means that more of the world's goods will be manufactured in this country. This will result in a rise in our nation’s wealth. We will generate more jobs and raise household incomes. We will have more money available to nurture our children, tend to our elderly and protect our environment. It is not an exaggeration to say that the only way that we can ensure a brighter future for everyone in this country is by consistently raising our level of manufacturing productivity.
It is for this reason that I will emphatically state that the only thing our elected officials in Washington should attempt to do is to improve the competitiveness of our nation. There are many ways to do this, so there would be plenty of projects to keep both Democrats and Republicans busy. And the one over-arching objective upon which there should be no disagreement is increasing our national wealth by making the economy more productive.
Despite all of the problems generated in Washington, we have actually made progress for the past two years. Here's hoping the policymakers can get their act together soon so we can maintain and even build build the momentum in the future.