NCPA - National Center for Policy Analysis

Identifying The Most Productive Service Sectors

May 20, 2002

You might be surprised at which sectors of the economy turned in the highest productivity numbers -- and which the lowest throughout the 1990s.

Here are some eye-openers in selected service-sector industries from 1990 through 2000, uncovered by the Bureau of Labor Statistics.

  • Productivity in the railroad industry grew by 5.1 percent annually -- the result of mergers that cut employment and boosted efficiency.
  • By contrast, the rate of output by hour in air transportation grew less than 2 percent per year.
  • Nonstore retailers, such as catalog and online sellers, achieved productivity growth averaging 9 percent annually.
  • Eating and drinking places eked out a 0.3 percent annual gain.

Food stores, motion picture theaters and cable and other pay-TV services actually lost productivity -- but only by less than 1 percent annually.

Commercial banks registered a 2.9 percent increase, and department stores chalked up a 5.2 percent gain.

Source: Michael J. Mandel, "Economic Trends: Service Sector Surprises," Business Week, May 27, 2002.


Browse more articles on Economic Issues