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115 Monthly Lab. Rev. 10 (1992)
Productivity in the Nuts and Bolts Industry, 1958-90

handle is hein.journals/month115 and id is 966 raw text is: Productivity in the nuts and bolts industry, 1958-90 Over the 1958-90 period, productivity growth accelerated in the bolts, nuts, screws, washers, and rivets industry, primarily reflecting changes in manufacturing processes, industry structure, and final demand Ziaul Z. Ahmed utput per employee hour in the bolts, and nuts, screws, rivets, and washers industry Mark Sieling 0 increased at an average annual rate of 0.9 percent between 1958 and 1990, according to a new Bureau of Labor Statistics industry labor productivity measure.' Output increased by 1.5 percent a year over this period, while employee hours inched up at the rate of 0.6 percent annually. The relatively low annual average increase in labor productivity for the industry over the period, however, masks a pattern of accelerating produc- tivity growth. As table 1 shows, the annual rate of productivity growth was 0.5 percent between 1958 and 1973, 1.0 percent between 1973 and 1979, and 1.4 percent between 1979 and 1990. During the 1958-79 period, annual changes in industry output were often matched by changes in employee hours. From the late 1970's through the early 1980's, however, both industry employment and employee hours declined faster than industry output declined, resulting in productivity in- creases. Faced with ebbing demand for domesti- cally produced bolts and nuts caused primarily by growing competition from imports, many estab- lishments--especially those employing 500 workers or more-shuttered their gates. During the 1983-90 period, industry output increased at a 3.0-percent annual rate, primarily reflecting large gains in the output of small-sized establishments. Employee hours, however, in- creased by only 1.9 percent per year. Much of this improvement in output per employee hour Ziaul Z. Ahmed and stemmed from the growing use of more versatile Mark Sieling are and higher capacity boltforming machinery, economists in the Division of Industry Productivity and improvements in machine durability, advances Technology Studies, in bolt and nut design, and shifts in production Bureau of Labor Statistics. processes. Because demand for the industry's products is closely tied to activity in durable goods-manufac- turing industries, year-to-year changes in output and employee hours tended to reflect general eco- nomic conditions. During the 1981-82 recession, for example, the industry's output declined by about 25 percent, while employee hours fell by al- most 22 percent.2 The productivity indexes developed for this in- dustry reflect the change over time in the ratio of a weighted output index to an employee hours in- dex. The output index is developed using a de- flated value technique. Data on value of shipments for various classes of products within the industry are converted to a constant-dollar basis using matching BLS Producer Price Indexes. Constant- dollar values of shipments are then combined at the industry level using fixed-period employee hour weights and are adjusted for industry cover- age and net changes in inventories. Annual output indexes are also benchmarked every 5 years to the more comprehensive data available in the Census of Manufactures. (For a more complete descrip- tion of this methodology, see the appendix. Output and demand Over the 1958-90 period, output of domestically produced nuts and bolts was strongly influenced by growing import penetration, increasing use of alternative joining technologies, improved fasten- ers, and the development of products requiring fewer fasteners. Durable goods-manufacturing industries annu- ally consume about four-fifths of total domestic fastener output.3 Transportation equipment man- ufacturers account for about one-quarter of this 10 Monthly Labor Review October.1992

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