ENPRODUCTIVITY, MARGINS & BORROWER PLANNING · OCTOBER 26, 2026
New York Fed Research Finds Faster Revenue per Worker and Wider Margins
New York Fed research found U.S. nonfarm-business productivity and public-company real revenue per worker accelerated after 2019, while average gross and operating margins also increased through 2025.
What the research reports
Source publication date: October 15, 2026. A Federal Reserve Bank of New York Liberty Street Economics post used Bureau of Labor Statistics data and public-company Compustat filings to examine productivity and firm outcomes. Nonfarm-business output per hour grew about 1.0% per year from 2010 through 2019 and 2.2% per year from 2019 through 2025. Real revenue per worker in the public-firm sample similarly accelerated from 0.7% to 2.2% per year.
- 01Productivity growth accelerated
- 02Average margins widened
- 03R&D intensity predicted larger gains
Average profit margins also increased
The analysis reports that sales-weighted average gross margins rose from about 34% in 2019 to 37% in 2025, while operating margins rose from 16% to 18%. Firms with greater research-and-development spending relative to sales in 2019 tended to record stronger subsequent operating-markup growth, whereas higher physical capital intensity did not show the same significant pattern. The research describes associations and does not prove that R&D alone caused the outcomes.
The sample does not represent every borrower
The author excluded agriculture, utilities, finance, real estate, and public administration because of productivity-measurement challenges, and Compustat primarily captures public companies. Real revenue per worker is a useful analytical measure but not the same as cash flow, EBITDA, labor productivity for a specific process, or money available for debt service. A smaller private company can differ materially in customer mix, owner compensation, staffing, accounting, capital needs, and bargaining power.
Practical borrower takeaway
Calculate monthly or quarterly revenue per full-time-equivalent worker, units or billable output, gross margin, operating margin, labor cost, overtime, rework, capacity, and cash conversion using consistent definitions. Tie claimed productivity gains to invoices, payroll, production, service, software, equipment, and bank records. Separate sustainable savings from deferred hiring, maintenance, or one-time price increases, then stress-test slower demand, wage growth, implementation cost, and required capital spending before adding debt service.
Borrowers should quantify their own revenue per worker, output, margins, labor cost, technology spending, and cash conversion, then explain whether recent gains are recurring before using productivity to support debt capacity.
Discuss a financing need →This independent summary is based on the cited source and is provided for general educational purposes only. Terms and program requirements may change.