The Piton Investment Team monitors a broad array of economic data, but one metric where they especially like to see positive numbers is growth in productivity. Piton’s Senior Vice-President of Research, Chuck D. Etzweiler, MBA, CIMA®, CFP®, CMT, has characterized rising productivity as an “elixir” for many economic ills, from business challenges to government deficits. A blog entry last month (https://pitonwealth.com/investment-resources/productivity-growth-and-the-diffusion-of-new-technologies/) focused on the Team’s analysis of productivity as it relates to AI and other technological innovations.
This week, when they saw that the Preliminary Productivity and Costs for Q2 of 2026 rose 1.4% (https://www.bls.gov/news.release/archives/prod2_08062026.htm), the Team took interest in how the recent rise in productivity looks historically. The graph below from Bespoke charts real output per hour, labor productivity, measured as 3-year annual change (this time frame helps depict the overall trend better than more volatile quarterly numbers).
Further filtering for the volatility of this metric during the pandemic, the graph suggests that we are in the middle of, even early in, a long surge of productivity, since at other times this general trend has lasted more than a decade. Like previous surges, the current rise is arguably driven by fresh technological innovations, such AI, robotics, etc. For the Piton Investment Team, this means that they will look at investment opportunities both in companies developing these innovations and in companies whose productivity can be boosted by effective use of these new tools. If this does prove to be a long trend, the Team will have many opportunities to research and evaluate for the benefit of the portfolios of Piton clients.