Chemical Productivity Growth Slows in Second Quarter

Growth of the U.S. chemical industry's productivity slowed down in the second quarter from the three previous quarters. However, it's too early to panic. It's nevertheless worrisome, as the second quarter normally exhibits stronger productivity growth than does the first quarter, with a seasonal slowdown coming in the third quarter of the year. Also troublesome is that productivity (output per hour) for chemicals and allied products grew more slowly in the second quarter than did productivity for all manufacturing industries (including the chemical industry) on a quarter-to-quarter basis and almost equaled growth in the manufacturing sector on an annual basis. Unit labor costs (production wages per unit of output) for chemicals actually rose in the second quarter from the first as they continued to fall for all manufacturing. On an annual basis, the chemical industry's unit labor costs fell more slowly than they did for all manufacturing. In the first quarter, the annual decline for ...