Increased Productivity Boosts Profits Margins

When a company increases productivity, it makes more products without increasing costs. Higher productivity can improve the company’s profit margin and total profits.

During this business cycle, productivity has increased at an average rate of 1.3% year-over-year. But productivity has been cut in half since the previous business cycle.

See also “Does US Productivity Increase Under Trump?

Picture source: LPL Financial LLC

Increased Productivity Boosts Profits Margins