Why Is Manufacturing Productivity Growth So Low?

Enghin Atalay, Ali Hortaçsu, Nicole Kimmel and Chad Syverson

No 34264, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We examine the recent slow growth in manufacturing productivity. We show that nearly all measured TFP growth since 1987—and its post-2000s decline—comes from a few computer-related industries. We argue conventional measures understate manufacturing productivity growth by failing to fully capture quality improvements. We compare consumer to producer and import price indices. In rapidly changing industries, consumer price indices indicate less inflation, suggesting mismeasurement in standard industry deflators. Using an input-output framework, we estimate that TFP growth is understated by 1.7 percentage points in durable manufacturing and 0.4 percentage points in nondurable manufacturing, with no mismeasurement in nonmanufacturing industries.

JEL-codes: D2 E01 L6 (search for similar items in EconPapers)
Date: 2025-09
Note: EFG PR
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