Statistics. The Republic of Korea and Taiwan had the largest productivity increases of 8.7 percent each, while Germany followed with an increase of 5.0 percent. The United States productivity increase of 4.1 percent was the fourth largest among the 16 economies compared. Italy and Norway both had declines in productivity (-0.5 and -0.2 percent, respectively).
However, expressed in U.S. dollars, manufacturing unit labor costs increased in 13 of the economies and declined in three. Declines in the dollar's exchange rate reversed the direction of movement in three countries. The largest contrast was for Australia, from +2.8 percent in unit labor costs in national currency to +14.5 percent in unit labor costs expressed in U.S. dollars. This difference can be explained by the strong appreciation of the Australian dollar relative to the U.S. dollar.
Manufacturing productivity, output, and labor input
Manufacturing productivity increased in 14 of the 16 economies compared in 2007. The United States increase of 4.1 was the fourth largest among the 16 economies. This was slightly above the 3.9 percent U.S. average annual increase since 1979. Korea and Taiwan led in manufacturing productivity growth (+8.7 percent each), followed by Germany (+5.0 percent). Manufacturing productivity decreased in Italy and in Norway (-0.5 percent and -0.2 percent respectively).
Manufacturing output increased in 15 of the 16 economies in 2007. Taiwan and Korea were the leaders in the growth of output. In 2007, growth in manufacturing output in Germany, Taiwan and Norway was noticeably higher than their average annual rates of increase over the 1979-2007 period. The U.S. increase of 2.3 percent was somewhat lower than its average annual increase since 1979.
While 15 of the manufacturing sectors had increases in 2007 in output, 9 had increases in total hours worked. Norway and Denmark had the largest increases in total hours worked of 4.6 and 3.4 percent, respectively. Canada had the steepest decline (-3.1 percent) in hours in 2007, followed by Korea (-2.1 percent), the United Kingdom (-1.9 percent). The United States had the fourth steepest decline in hours worked (-1.7 percent).
For the period 2000-2007, total hours worked in manufacturing declined for all 16 economies. The United Kingdom had the steepest average annual decline (-3.9 percent), followed by the United States (-3.1 percent).
Manufacturing employment increased in 10 of the 16 economies in 2007. Norway had the largest increase in employment (+3.8 percent), and Australia was second (+1.8 percent). Canada had the largest decline in employment (-2.9 percent), followed by the United Kingdom (-2.2 percent) and the United States (-1.7 percent).
Over the 2000-2007 period, the United Kingdom and the United States experienced the steepest average annual declines in manufacturing employment (-4.0 and -3.0 percent respectively).
In 2007 average hours worked in manufacturing declined in 7 of the 16 economies and increased in 7. The United States and France showed no change in average hours worked. This compares to 11 economies with declining average annual manufacturing hours over the 2000-2007 period. Australia and Korea had the steepest declines in average hours worked in 2007. Denmark had the largest increase in average hours worked (+2.9 percent) and Sweden followed with a growth of 1.1 percent.
Manufacturing hourly compensation and unit labor costs
Total labor compensation in manufacturing increased in 15 of the 16 economies in 2007. The largest increases were in Norway (+9.5 percent) and Australia (+6.3 percent). U. S. compensation rose by 1.7 percent. Japan was the only economy with a decline in total labor compensation.
Hourly compensation in manufacturing also increased in 15 of the 16 economies in 2007, with Japan again the exception. The largest increases were in the Korea (+7.8 percent) and Australia (+6.0 percent). The U.S. increase of 3.5 percent in hourly compensation was below its average annual increase since 1979.
Expressed in national currencies, unit labor costs increased in 10 economies in 2007 and decreased in 6. The largest increase occurred in Norway (+4.9 percent) and the largest decline was in Taiwan (-6.5 percent). Unit labor costs in U.S. manufacturing decreased by 0.5 percent.
Expressed in U.S. dollars, manufacturing unit labor costs increased in 13 economies in 2007 and declined in 3. The unit labor costs of three economies, Germany, the United Kingdom, and Korea, went from decreases to increases when computed on a U.S. dollar basis. Australia, with the largest currency appreciation, showed the largest difference, from +2.8 percent in unit labor costs in national currency to +14.5 percent in unit labor costs expressed in U.S. dollars.
Movements in exchange rates often are the dominant force behind changes in comparative unit labor costs and international competitiveness. In 2007, the U.S. dollar weakened against most of the currencies being compared. The only exceptions were Japan and Taiwan, where the currencies depreciated against the dollar. This depreciation of the U.S. dollar against most currencies continues a trend that began in 2001. In 2007, the dollar fell 9.1 percent against the euro, following a decline of 0.9 percent in 2006.
