--- canonical_url: "https://csls.ca/research/what-explains-the-post-2004-u-s-productivity-slowdown/" title: "What Explains the Post-2004 U.S. Productivity Slowdown?" author: name: "CSLS" url: "https://csls.ca/author/cslc/" date_published: "2026-07-02T12:41:50+00:00" date_modified: "2026-07-02T12:41:50+00:00" post_type: "research" summary: "" post_tag: - "capital deepening" - "growth accounting" - "ICT" - "labour productivity" - "manufacturing" - "productivity slowdown" - "total factor productivity" - "United States" country_focus: - "Canada" - "United States" province_region: - "National" research_theme: - "Productivity and Economic Measurement" featured_image: "https://csls.ca/wp-content/uploads/2026/07/old-reports_hero_banner_bg.webp" status: "publish" --- # What Explains the Post-2004 U.S. Productivity Slowdown? Canonical URL: https://csls.ca/research/what-explains-the-post-2004-u-s-productivity-slowdown/ # What Explains the Post-2004 U.S. Productivity Slowdown? [Download full PDF report](https://csls.ca/pdf/csls2017-05-1.pdf) Cite this report × Cite this report as: Murray, Alexander. 2017. “What Explains the Post-2004 U.S. Productivity Slowdown?” CSLS Research Report 2017-05. Ottawa: Centre for the Study of Living Standards. https://csls.ca/research/what-explains-the-post-2004-u-s-productivity-slowdown/ ## Author: - Alexander Murray Centre for the Study of Living Standards (CSLS) ## Report 2017-05 August 2017 54 pages ## Related research [Productivity: Key to Economic Success Centre for the Study of Living Standards (CSLS) March 1998 | Report 1998-01 | 99 pages](https://csls.ca/research/productivity-key-to-economic-success/) [Productivity Trends: A Canada-U.S. Comparison Centre for the Study of Living Standards (CSLS) January 1999 | Report 1999-01 | 6 pages](https://csls.ca/research/productivity-trends-a-canada-u-s-comparison/) [New Estimates of Manufacturing Productivity Growth for Canada and the United States Andrew Sharpe March 1999 | Report 1999-02 | 21 pages](https://csls.ca/research/new-estimates-of-manufacturing-productivity-growth-for-canada-and-the-united-states/) [Productivity Trends in the Construction Sector: A Case of Lagging Technical Progress Centre for the Study of Living Standards (CSLS) November 2001 | Report 2001-03 | 177 pages](https://csls.ca/research/productivity-trends-in-the-construction-sector-a-case-of-lagging-technical-progress/) [Productivity Trends in Natural Resources Industries in Canada Centre for the Study of Living Standards (CSLS) February 2003 | Report 2003-01a | 69 pages](https://csls.ca/research/productivity-trends-in-natural-resources-industries-in-canada/) [Productivity in the Forest Products Sector: A Review of the Literature Centre for the Study of Living Standards (CSLS) February 2003 | Report 2003-02 | 28 pages](https://csls.ca/research/productivity-in-the-forest-products-sector-a-review-of-the-literature/) [An Analysis of Productivity Trends in the Forest Products Sector in Canada Centre for the Study of Living Standards (CSLS) February 2003 | Report 2003-01b | 64 pages](https://csls.ca/research/an-analysis-of-productivity-trends-in-the-forest-products-sector-in-canada/) [Why Are Americans More Productive Than Canadians? Andrew Sharpe June 2003 | Report 2003-03 | 83 pages](https://csls.ca/research/why-are-americans-more-productive-than-canadians/) [Productivity Growth and Poverty Reduction in Developing Countries Centre for the Study of Living Standards (CSLS) September 2003 | Report 2003-06 | 70 pages](https://csls.ca/research/productivity-growth-and-poverty-reduction-in-developing-countries/) [The Canada-Atlantic Canada Manufacturing Productivity Gap: A Detailed Analysis Andrew Sharpe December 2003 | Report 2003-08 | 127 pages](https://csls.ca/research/the-canada-atlantic-canada-manufacturing-productivity-gap-a-detailed-analysis/) ## Abstract ## Résumé EN FR Copy link Email LinkedIn Economic theory and history show that labour productivity growth is the main driver of rising living standards, so changes in the trend rate of productivity growth have profound implications for a society’s future prosperity. The average annual rate of business sector labour productivity growth in the United States declined by 1.9 percentage points between the 1995-2004 period and the 2004-2015 period, from 3.2 per cent to 1.3 per cent. Based on original data analysis and a review of existing literature, this report summarizes the state of knowledge on the causes of the post-2004 slowdown in U.S. productivity growth. Official growth accounting estimates indicate that 60-65 per cent of the labour productivity decline is accounted for by a decline in total factor productivity growth, while 30-35 per cent is accounted for by a decline in the rate of capital deepening (i.e. growth of capital per hour worked). Three industries, collectively representing 28 per cent of business-sector hours worked in 2015, account for over 80 per cent of the aggregate labour productivity decline: manufacturing, wholesale trade, and retail trade. The aggregate productivity slowdown is traceable to a decline in the productivity contributions arising from industries that produce or intensively use information and communication technology (ICT) products. The decline in the productivity contribution of ICT was driven by some combination of a) slower technological progress in ICT and b) a reduction in business dynamism in the ICT sector resulting in a decline in the rate of resource reallocation from lessproductive to more-productive firms. La théorie économique et l’histoire montrent que la croissance de la productivité du travail est le principal moteur de la hausse du niveau de vie, de sorte que les variations du taux tendanciel de croissance de la productivité ont des répercussions profondes sur la prospérité future d’une société. Le taux de croissance annuel moyen de la productivité du travail du secteur des entreprises aux États-Unis a reculé de 1,9 point de pourcentage entre les périodes 1995-2004 et 2004-2015, passant de 3,2 % à 1,3 %. À partir d’une analyse de données originale et d’une recension de la littérature existante, ce rapport résume l’état des connaissances sur les causes du ralentissement de la croissance de la productivité américaine après 2004. Les estimations officielles de comptabilité de la croissance indiquent que 60 à 65 % du recul de la productivité du travail est attribuable à un recul de la croissance de la productivité multifactorielle, tandis que 30 à 35 % est attribuable à un recul du taux d’intensification capitalistique (c.-à-d. la croissance du capital par heure travaillée). Trois industries, qui représentaient collectivement 28 % des heures travaillées du secteur des entreprises en 2015, expliquent plus de 80 % du recul global de la productivité du travail : la fabrication, le commerce de gros et le commerce de détail. Le ralentissement global de la productivité est attribuable à un recul des contributions à la productivité provenant des industries qui produisent ou utilisent intensivement des produits des technologies de l’information et des communications (TIC). Le recul de la contribution des TIC à la productivité résulte d’une combinaison a) d’un ralentissement du progrès technologique dans les TIC et b) d’une réduction du dynamisme des entreprises dans le secteur des TIC, entraînant un recul du taux de réaffectation des ressources des entreprises moins productives vers les entreprises plus productives. [Download full PDF report](https://csls.ca/pdf/csls2017-05-1.pdf)