1. TOTAL FACTOR PRODUCTIVITY: THE PRODUCTIVITY MEASURE
The Postal Service measure of productivity, Total Factor Productivity (TFP), includes all factors of production. TFP measures the growth in the ratio of the outputs and the inputs, or resources, expended in production. By tracking outputs and resource usage, TFP provides a historical measure of efficiency.

The Postal Service’s main outputs are mail volumes and servicing an expanding delivery network. To account for variations in resources used to process different types of mail, TFP weights each mail type according to its workload content. Weighting is determined by factors such as size, weight of the mail type, mailer preparation including barcoding and presorting and, mode of transportation used, such as air or highway. In addition to labor, TFP also measures capital and materials inputs such as mechanized and automated equipment, facilities, transportation, and other non-personnel costs. The Output per workhour (labor) component of TFP uses only labor input as a measure of resource use.

Multiple factors may cause TFP growth to vary in the short term. Expenditures to enhance service and improve customer satisfaction may cause short-term declines in TFP growth. TFP can fluctuate from one year to another because of time lags between making major investments and realizing the associated savings. Consequently, when assessing short-term productivity performance, the factors affecting TFP growth should be taken into consideration. Because TFP can be volatile over the short term, analyses and assessments are best made over fairly long periods of time.

Total Factor Productivity

Output per Workhour1

Multi Factor Productivity2

		Annual3	Cumulative From 1972		Annual	Cumulative From 1972		Annual3	Cumulative From 1972
	1990	2.9	8.6		3.4	13.9		(0.0)	11.3
	1991	(1.8)	6.8		(0.1)	13.7		(1.0)	10.2
	1992	0.4	7.2		1.0	14.8		2.0	12.2
	1993	3.8	11.0		4.6	19.3		0.5	12.7
	1994	(0.2)	10.9		0.8	20.2		1.0	13.7
	1995	(1.9)	8.9		(1.3)	18.9		0.4	14.1
	1996	(1.3)	7.6		(0.1)	18.8		1.4	15.5
	1997	1.3	8.9		1.7	20.5		1.0	16.5
	1998	(1.0)	7.9		1.2	21.7		1.2	17.7
	1999	(0.1)	7.7		0.9	22.6		0.7	18.4
	2000	2.2	9.9		2.0	24.6		1.7	20.1
	2001	1.7	11.6		1.7	26.3		(0.1)	20.0
	2002	1.1	12.7		2.2	28.5		2.7	22.8

	1		Output per work hour measures the change in the relationship between workload (mail volume and deliveries) and the labor resources used to do the work. Our main output is delivering mail and services to an expanding delivery network.
	2		2001 and 2002 MFP Data are estimates of DRI-WEFA. BLS Data for these years has not been released.
	3		Historical data is subject to revision as certain data used in calculating productivity are periodically revised. Prices indexes released by the Bureau of Labor Statistics and the Bureau of Economic Analysis that are used to calculate resource usage are subject to regular historical revisions by these agencies. When historical revisions are released, they are incorporated into the TFP calculation, can result in historical TFP revisions. TFP for the reporting year is also subject to revision when final Postal Service cost data for the reporting year is available. Generally, this revision occurs in April of the following year.