A study of US labor productivity in the years following the dot-com collapse finds that the lion's share of productivity growth continues to come from only a few sectors. But research by the McKinsey Global Institute (MGI) concludes that productivity is growing in more sectors now than in the late 1990s. (The full report, US Productivity Growth, 1995-2000, is available free of charge online). In addition, the largest contributors to productivity growth after 2000 have been service industries. Such trends bode well for the US economy.

In our earlier research,¹ we found that just 6 of the economy's 59 sectors accounted for virtually all net productivity growth from 1995 through the end of 1999. Since 2000, however, productivity growth has been somewhat less concentrated among the big hitters: from 1998 to 2000, the top 4 sectors represented 100 percent of total growth (Exhibit 1); from 2000 to 2003 (the latest year when sector-level data are available), the top 7 sectors contributed only 75 percent of the total (Exhibit 2).²