INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION
Industrial production rose 0.5 percent in December, with widespread increases among most major market and industry groups. The overall gain in output was held back a bit by a decline in motor vehicle production, which had been quite high in November. At 128.1 percent of its 1992 average, total industrial production in December was 5.9 percent higher than it was in December 1996. For the fourth quarter as a whole, industrial production grew 7.4 percent at an annual rate after an increase of 6.0 percent in the third quarter. The rate of industrial capacity utilization edged up to 83.4 percent-its highest rate since September 1995.
Market Groups
The output of consumer goods rose 0.3 percent, although it was held down by a 2.5 percent reduction in the output of automotive products. The output of other durable consumer goods, especially appliances, grew sharply for a second consecutive month. The production of nondurable consumer goods increased 0.4 percent, largely as a result of an increase in energy products, mainly automotive gasoline. The output of nonenergy nondurable consumer goods, which had been flat for most of the year, has picked up somewhat in recent months.
The output of business equipment increased 0.4 percent, with the most significant gain occurring in information processing equipment. Although growth in the output of computers has decelerated recently, sharp gains for instruments and communications equipment resulted in another sizable gain in the production of information processing equipment in December. Among other major components of business equipment, the output of industrial equipment posted a substantial rise. The production of transit equipment retreated somewhat from the high level in November, as reduced production of motor vehicles outweighed a continued increase in aircraft production.
The production of construction supplies increased further and has risen nearly 4 percent over the past year. Mainly reflecting another sizable gain in durable materials, the output of materials rose noticeably again in December. Within this group, the output of parts for high-technology equipment and aircraft continued to increase rapidly. The production of nondurable goods materials has improved in recent months. The output of energy materials, retracing most of its decline in November, rose 0.5 percent.
Industry Groups
Factory output increased 0.5 percent in December, a slower pace than that of the two previous months. Excluding motor vehicles and parts, however, growth in manufacturing output was about 0.8 percent in each of the past three months. Within the durable and nondurable groups, most major industries posted gains in December. The main exception was motor vehicles and parts. The output of durables rose 0.6 percent, with the strongest increases occurring in aircraft, fabricated metal products, and electronic components. During the past twelve months, the output of durables has increased 10 percent. Nondurables, which grew only about a quarter as much as durables over the past year, expanded 0.4 percent in December.
Capacity utilization for manufacturing edged up to 82.5 percent, its highest level since September 1995. Utilization in advanced-processing industries remained at 80.6 percent, while utilization in primary-processing industries climbed 0.4 percentage point, to 86.7 percent. Utilization in advanced-processing industries remained at about its long-run average, while the rate in primary processing industries was 4 percentage points above its long-run average. Higher operating rates for petroleum refining, primary metals, and fabricated metal products boosted the overall rate among primary processors in December. The operating rates for mining and utilities increased slightly.
G.17 Release Tables: