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International Comparisons of Manufacturing Productivity and Unit Labor Costs - Key Findings

Comprehensive database with annual data covering value added, employment, hours, labor cost, labor productivity, and unit labor costs for 41 countries for the manufacturing sector and a range of detailed industries. Part of the International Labor Comparisons Program.

December 2019

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Weak dollar drove up manufacturing labor costs globally in 2018, only partially offset by productivity in some countries

View Summary Tables & Charts here.


  • Appreciation of national currencies compounded labor cost growth in US dollar terms in most mature economies reversing the trend from previous years (2011-2016)
  • Productivity growth not enough to offset rising labor costs in USD terms even though productivity growth has become more important in recent years in offsetting rising labor costs
  • Manufacturing productivity growth remains well above aggregate economy productivity growth, but has slowed down severely in mature economies


  • US Manufacturing gained in cost-competitiveness in 2018 due to a weak dollar and stronger productivity growth mostly vis-à-vis its European competitors
  • Slower labor cost growth growth also helped, while productivity growth has finally spread beyond the ICT and electronic products industries, although remains muted, especially when compared with other mature economies


  • Strong euro appreciation against the dollar (which has reversed since then) compounded otherwise muted labor cost growth in 2018. A substantial weakening in productivity growth in 2018 further added to a deterioration in Europe’s manufacturing cost competitiveness
  • As Eastern European economies are growing at a much faster pace than in the rest of Europe, manufacturing labor costs are also rising rapidly. Productivity growth in Eastern Europe remains robust, but not enough to compensate enough for rising labor costs
  • Productivity growth weakened severely in almost all German industries, especially transport equipment and machinery, leading to a sharp rise in German manufacturing ULC in 2018
  • Even if lower than 2017, most Italian industries still experienced productivity gains in 2018, though not enough to offset increases in labor costs


  • Most major emerging market currencies continued to depreciate against the dollar in 2018 (except for China and South Africa) and 2019. This helps in keeping labor costs competitive in US dollar terms, as productivity growth is generally too weak to offset rising labor costs (in national currency terms)
  • China managed to retain its cost-competitiveness (i.e. zero ULC growth) roughly until 2016, but since then labor cost growth has increased more rapidly than productivity
  • Indian labor costs and productivity growth remain roughly balanced, while a depreciating rupee provides additional support
  • Manufacturing productivity in Brazil in Mexico is strengthening in recent years, ending a period of two periods of stagnant productivity growth, helping to put downward pressure on unit labor costs

View infographic from 2018 release: Productivity growth is key to restoring US manufacturing competitiveness.

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