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March 1996, Vol. 119, No. 3
Following periods of decline, productivity in the housefurnishings industry advanced steadily after 1980, reflecting consumer demand, marketing strategies, and other related factors. The industry comprises some 1,000 establishments dominated by a fairly small number of large firms.1 While the large firms account for the majority of industry production and employment, many of the small firms produce specialty items. The industry's most important products are bedroom and bathroom fabrics - bedsheets, pillowcases, comforters, bath towels, and other similar textile products.
Since the early 1980's, firms have been consolidating and restructuring their manufacturing processes, resulting in an industry with fewer, but larger firms. New, more productive manufacturing equipment allowed firms to increase output more rapidly than employment, resulting in increased productivity.
Trends in productivity
Productivity in housefurnishings grew at an average annual rate of 1.2 percent between 1972 and 1991 (table 1), compared with 2.5 percent for all manufacturing. The industry's productivity growth (as measured by the change in output per hour) reflects a more rapid increase in output (1.7 percent a year) than in employee hours (0.5 percent a year).
Between 1973 and 1979, however, productivity declined by an average of 2.3 percent a year. This period includes the recession from late 1973 through early 1975,2 during which.output dropped much more rapidly than employee hours. Even when output began to grow again after 1975, it grew faster than employee hours only in 1977, and declined again in 1979, while employee hours continued to grow.
Steady productivity growth really began after 1980. Between 1979 and 1990, output increased at an average rate of 2.5 percent a year and hours increased 0.3 percent per year. Productivity for this period grew at an average rate of 2.2 percent a year.
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1 The housefurnishings industry is designed by the Office of Management and Budget as SIC 2392 in the Standard Industry Classification Manual. (Washington, Office of Management and Budget, 1987). The industry consists of the following 5-digit product classes:
23921 - Bedspreads and bedsets
23922 - Sheets and pillowcases
23923 - Towels and washcloths
23924 - other housefurnishings
23920 - Housefurnishings, not elsewhere classified
All average annual rates of change pertaining to the industry and mentioned in the text or in tables are based in the compound interest method of computation. The indexes for productivity and related variables are updated and published annually in the BLS publications, Productivity measures for Selected Industries and Government Services.
2 As designated by the National Bureau of Economic Research, Cambridge, MA.
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