BLS Report: U.S. manufacturing productivity leads the pack

Last year manufacturers in the United States achieved greater productivity increases than manufacturers in most other industrial economies, according to data released by the Labor Department Thursday.

All countries surveyed by the Bureau of Labor Statistics experienced a productivity slowdown in 2008, as the recession took hold. But among the 17 industrialized countries measured, the United States and South Korea enjoyed productivity growth of 1.2 percent in 2008, while most others dropped productivity levels.

At the same time, the U.S. shed the greatest percentage of manufacturing jobs in 2008, with a 3.4 percent decline in employment and a 3.9 percent decline in the number of hours worked. At the same time, the cost of those hours worked (that is, the labor cost), increased only by 1.7 percent, as measured in U.S. dollars, less than most others in the BLS survey. Both the United Kingdom and South Korea experienced decreases in labor costs last year.

According to reports, the findings reveal the paradoxical nature of productivity growth. In the long run, better productivity raises a country's standard of living. In the short run, though, it hampers employment growth as companies hesitate to hire back to pre-recession levels.

Note that the BLS study does not include a few manufacturing powerhouses, including China and India.