Today, payroll-processing firm ADP released a new economic report that offers insight into U.S. private sector workforce dynamics and trends. Developed by the ADP Research Institute with partner Moody's Analytics, the Workforce Vitality Index is a quarterly measure of U.S. industries that factors key labor-market indicators, such as employment growth, job turnover, wage growth, and hours worked.
The report represents the fourth quarter of 2014, but uses historical data to contextualize its conclusions; it uses the third quarter of 2013 as the basis for the index, where the starting value is set at 100. Overall, the index grew by 4.8 percent over the course of 2014 from a value of 101.8 in the fourth quarter of 2013 to 106.7 for the fourth quarter of 2014. The strongest industry growth over the past year was in construction, which rose by 8.4 percent during 2014, rising from 102.7 in the fourth quarter of 2013 to 111.4 in the fourth quarter of 2014. ADP attributes this gain to a combination of strong employment growth, wage increases, and a rise in the number of hours worked. Manufacturing also advanced by a significant amount—6.3 percent over 2014, due to wage increases and employment growth in large companies. Meanwhile, the weakest index growth was in the professional/business services sector, a category that includes architects and engineers.
"Though certainly not back to pre-financial crisis levels, the growth in vitality for the construction and manufacturing industries is an encouraging sign for a sustained recovery," Ahu Yildirmaz, vice president and head of the ADP Research Institute, said in a press release. "These two industries have historically been bell weathers for how the economy is performing overall."
Chart: Maggie Goldstone; Source: ADP