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August 1989, Vol. 112, No. 8
Productivity in the retail auto and home supply store industry
Patricia S. Wilder
Productivity, or output per hour of all persons, in the retail auto and home supply store industry1 rose at an average annual rate of 3.0 percent from 1972 to 1987. This increase was well above the 0.9-percent annual gain in productivity registered by the nonfarm business sector of the economy. The growth in productivity reflects an increase in output of 5.5 percent per year, and a rise in hours of 2.4 percent annually. Contributing to the growth in productivity for the auto and home supply store industry were strong demand and increased use of computers in store operations.
The productivity trend for the 15-year period was one of overall growth for the industry. Since 1972, increases in productivity have occurred in every year but four, ranging from 0.6 percent to 11.4 percent. Declines in productivity occurred in 1974, 1979, and 1982, with no change occurring in 1984. The largest decline occurred in 1974, when productivity posted a 6.2-percent drop. (See table 1.)
Two pronounced subperiod trends in productivity were observed for the years 1972-82 and 1982-87. During the earlier period, productivity in the auto and home supply store industry increased at an average annual rate of 2.7 percent, as output rose 5.2 percent and hours of all persons grew 2.4 percent. Even though the economy experienced two economic recessions during this period, auto and home supply stores recorded substantial growth, demonstrating the countercyclical nature of the industry. During this same period, output of the franchised new car dealers industry reflected the general downturn in the economy, declining 0.7 percent while productivity was growing at a very low rate of 0.6 percent. Auto and home supply stores benefited from the recovery that began in 1983. During the latter period, 1982-87, productivity grew 3.8 percent annually, while output grew at a high rate of 6.9 percent, and hours increased 3.1 percent.
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1 The auto and home supply store industry is classified as SIC 5531 in the 1987 Standard Industrial Classification Manual, published by the U. S. Office of Management and Budget.
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