Productivity Shows Slight Gain for 1991 : Indicators: The 0.3% rise ended two years of decline. Employees are working harder but putting in fewer hours.

The productivity of American workers inched up 0.3% last year as the economy struggled to emerge from the recession, the government said Tuesday. The anemic growth reversed two years of decline.

The Labor Department also said productivity in the final three months of 1991 jumped a revised 1.7% annual rate, even more than the 1.1% advance in its initial estimate.

Economists said the fourth quarter rise in non-farm productivity is a good sign for the economy and indicates employees worked harder, but did so in fewer hours.

“It does show productivity is on a positive growth track, that it improved even in the face of a very weak economy,” said Norman Robertson, chief economist at Mellon Bank.

“Although the numbers are not impressive, they really are quite positive,” he said.

Productivity measures the output per hour of all workers. It indicates how well companies can produce goods and at what cost.

The output per worker rose 0.6%, while the number of hours employees worked fell 1.1%.

Economists attributed the slight rise in output to a possible increase in orders, which forced employees to work harder but may not have prompted companies to hire back laid off workers.

“This reflects a labor market working harder, although not necessarily longer hours. (Previous) layoffs have led the survivors to do a better job,” said Irwin Kellner, chief economist for Chemical Banking Corp.

The fewer hours worked may reflect businesses’ use of more efficient machinery and equipment, Kellner said.

“It is the aftereffect of long-range investment plans in businesses putting more moderate machinery into place,” he said.

Marco Babic, an economist at Evans Economics Inc., said he expects productivity to continue to rise as U.S. workers become better able to compete with the Japanese.

“We probably will still see productivity rise but we will not see a lot of hiring of more workers. Corporations will be getting leaner and will focus on buying more machinery, not using more people, to increase productivity,” he said.

The 0.3% annual growth in productivity was a bit stronger than the 0.2% initial estimate. Productivity had declined 0.1% in 1990 and 0.9% in 1989 after rising 0.9% in 1988.

The manufacturing sector showed a 1.4% rise in productivity, revised from the 1.5% previously reported.

Productivity for makers of durable goods--items designed to last three years or longer--rose 1.0% instead of 1.1%. Companies making non-durables saw productivity rise 1.9% instead of 2.1%.

Productivity of factory workers rose at a 1.4% annual rate in the fourth quarter.