Section 4: Comparisons of Multifactor Productivity
Data are available that make it possible to carry out comparisons between MFP in trucking and MFP of other transportation industries as well as of the U.S. private business sector. Such a comparison provides a broader perspective into the truck MFP estimates. Relevant data are shown in Table 6 on levels and growth of MFP. MFP estimates for truck transportation are obtained from Table 4 of this study, and they relate to NAICS data. The other MFP estimates were obtained from BLS calculations. The air transportation MFP relates to NAICS data while rail MFP relates to SIC data. Rail MFP data are available up to 1999 while the other three MFP series go beyond that year.
Estimates of MFP for the three transportation industries and the U.S. business sector end at different years; so, it is not possible to compare trucking with the other three series for the entire 1987-2003 period. However, all series do go up to 1999; so, MFP growth rates can be compared for the 1987-1999 period. Over that period, truck and air MFP increased at similar annual rates, of 1.2% and 1.3% respectively; while rail MFP increased at the highest annual rate of 3.3%. All three transportation industries experienced growth rates of MFP that were higher than that of the U.S. business sector of 0.9% per annum.
In addition, during 1987-1995, truck MFP increased at a faster rate, of 2.0% per annum, than MFP in air transportation, which grew at 1.2% annually. During this time period, also, the three transportation industries experienced annual MFP growth which was at substantially higher rates than that of the U.S. economy (of 0.6%).
When one compares truck MFP with the MFP of the U.S. business sector beyond the 1987-1999 period, the data in Table 6 indicate that over 1987- 2000, truck MFP increased faster per year (1.1%) than the business sector (0.9%). Consequently, during this time period, truck MFP contributed positively to increases in MFP in the U.S. economy. During 1987-2001, the growth rates of truck MFP and U.S. economy MFP were the same (at 8.0%). During the 1987-2003 period, truck MFP grew at 0.8% per annum, compared to the U.S. private economy of 1.0% per year. After 2001, MFP in trucking grew at a lower rate than in the U.S. private economy.
The decrease in truck MFP during 1995-2001 was affected by a decrease in truck output—observed in Table 4 for the year 2001. This decrease in output was affected by two events in that year: 1) an economic recession, and 2) the catastrophic events of 9/11/01. Subsequently, industry output dropped in 2001 while the inputs decreased but by less.
The MFP levels of Table 6 were then converted into a graphical presentation, as shown in Figure 1. There, it can be observed that truck MFP was at a higher level than that of the U.S. business sector for most of the period of analysis. However, in 2001 to 2003, it fell below that of the U.S. business.
One also observes that truck MFP reached higher levels than air MFP, for most years of the period of analysis. In 1999, however, this situation was reversed and maintained until 2001. It is not possible to make comparisons for 2002 and 2003, during which years truck MFP increased, because of unavailability of air MFP data. Finally, while truck MFP briefly exceeded the level of rail MFP in 1988, the latter increased at faster rates during the rest of the period of analysis.