Friday, March 04, 2011

Productivity Gains in US Manufacturing

The US Bureau of Labor Statistics published its findings regarding productivity trends in the US for the fourth quarter of 2010. The most encouraging part is the 4.2% increase in productivity for the manufacturing sector. According to many experts, productivity improvements are key to the long term success of the US Economy, which makes sense. This bodes well for the health of manufacturing. Check out the full article at

It is true that increases in productivity can be achieved by reducing the labor force while maintaining the same output, and this did happen often in the 10 years since 2000. So productivity alone is not the best measure of health in a sector. You also have to look at the value and volume of outputs and the number of people employed. McKinsey, the global consulting behemoth, has issued a report that records that in the US there have been steady gains in productivity AND employment for every 10 year rolling period since 1929 (except one).

McKinsey concluded that there is a significant amount of room for an acceleration of productivity in US industry right now from two basic sources: adopting best practices within an industry (lean principles, etc...) and business and technology innovations.

That is encouraging, particularly when a company like MISys plays in the space of helping manufacturers become more efficient.


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