INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION
Industrial production rebounded 1.7 percent in August; the gain slightly exceeded the cumulative decline in production in June and July, which was associated with strikes at key General Motors parts plants. Motor vehicle assemblies, which had dropped from a seasonally adjusted annual rate of 12.4 million units in May to 8.2 million units in July, jumped to 13.2 million units in August as General Motors strove to replenish inventories depleted during the strikes. Excluding motor vehicles and parts, the index of industrial production was at approximately the same level in August as it had been in May. At 129.1 percent of its 1992 average, total industrial production in August was 3.1 percent higher than it had been in August 1997. Capacity utilization in manufacturing, mining, and electric and gas utilities rebounded 1.1 percentage points, to 81.7 percent, a level 0.4 percentage point below its 1967-97 average.
INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION: SUMMARY
Seasonally adjusted
| Index, 1992=100 | Percent change
| 1998 | 1998 | Aug. 97 to
Industrial Production | May June July Aug. | May June July Aug. | Aug. 98
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| | |
Total index | 128.8 127.5 127.0 129.1 | .3 -1.1 -.4 1.7 | 3.1
Previous estimates | 128.9 127.5 126.8 | .4 -1.1 -.6 |
| | |
Major market groups: | | |
Products, total | 122.2 121.2 120.4 122.5 | .3 -.8 -.6 1.7 | 2.7
Consumer goods | 116.7 115.2 114.1 116.6 | .1 -1.2 -1.0 2.2 | 1.7
Business equipment | 150.4 150.9 149.8 154.3 | .1 .3 -.7 3.0 | 6.7
Construction supplies | 126.7 126.4 127.0 126.1 | 1.6 -.3 .4 -.7 | 2.8
Materials | 139.6 137.5 137.5 139.7 | .4 -1.5 .0 1.6 | 3.6
| | |
Major industry groups: | | |
Manufacturing | 131.7 129.9 129.5 132.0 | .1 -1.3 -.4 2.0 | 3.2
Durable | 150.2 147.6 146.4 151.9 | .3 -1.7 -.9 3.8 | 5.3
Nondurable | 112.9 111.9 112.1 112.0 | -.3 -.9 .2 -.1 | .9
Mining | 108.4 106.0 106.3 105.7 | .9 -2.2 .3 -.6 | -.6
Utilities | 115.5 118.6 117.6 118.1 | 3.3 2.7 -.9 .4 | 4.5
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| | Capacity
| Percent of Capacity | Growth
| Average 1982 1988-89 1997 | 1998 | Aug. 97 to
Capacity Utilization | 1967-97 Low High Aug. | May June July Aug. | Aug. 98
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| | |
Total industry | 82.1 71.1 85.4 82.8 | 82.4 81.2 80.6 81.7 | 4.5
Previous estimates | | 82.4 81.2 80.5 |
| | |
Manufacturing | 81.1 69.0 85.7 81.8 | 81.1 79.7 79.1 80.4 | 5.1
Advanced processing | 80.5 70.4 84.2 80.0 | 79.4 77.8 77.0 78.8 | 5.9
Primary processing | 82.4 66.2 88.9 85.8 | 84.9 84.0 83.9 83.9 | 3.2
Mining | 87.5 80.3 88.0 90.0 | 91.4 89.3 89.5 88.8 | .8
Utilities | 87.3 75.9 92.6 89.2 | 90.4 92.8 91.9 92.2 | 1.1
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Note: Estimates for August are preliminary. Estimates from May to July are revised.
Market Groups
The output of consumer goods rose 2.2 percent in August, principally because of the 32.3 percent jump in the production of automotive products. The index for other durable consumer goods declined 1.0 percent as the output of appliances and air conditioners, which had moved erratically in recent months, fell back. Even with this decline, the output of household appliances has increased noticeably so far this year. The production of consumer nondurables has changed little in the past two months, during which the output of clothing weakened further while the output of consumer paper products improved. The output of food products, which had fallen sharply in June, changed little thereafter.
The production of business equipment rose 3.0 percent in August, largely because of the 19.6 percent jump in transit equipment. Although the transit-equipment jump primarily reflects the post-strike rebound in the assembly of light vehicles, the production indexes for heavy trucks, truck trailers, and commercial aircraft-for which demand remained strong-reached record highs. The production of information processing equipment advanced after having edged down in July; the output of office and computing equipment continued to grow rapidly although somewhat more slowly than in the first half of the year. The output of industrial equipment declined nearly 1 percent after gains in June and July, while the output of other equipment dropped 7 percent because the production of farm machinery and equipment fell sharply from an elevated level. Lower prices of farm commodities have led farmers to reduce their prospective purchases of farm equipment.
The output of construction supplies declined 0.7 percent but remained at a high level. The production of materials, which had declined in June and a bit further in July, rebounded 1.6 percent, to slightly above its May level. The recovery was in durable goods materials used to make motor vehicles; the output of consumer durable parts bounced back more than 12 percent, while that of equipment parts and other durable materials increased about 1 percentage point. The output index for nondurable materials eased, and that for energy materials edged up; these indexes are a bit below their levels in May.
Industry Groups
Manufacturing output, propelled by the 40 percent jump in motor vehicles and parts, rose 2 percent in August and fractionally surpassed the pre-strike level. Within durable manufacturing, gains were also recorded in the production of stone, clay, and glass products; primary metals; computer and office equipment; semiconductors; and instruments. The production of nondurables edged down after a gain of 0.2 percent in July. The production indexes for apparel, textile mill, paper, and leather products each declined 0.5 percent or more in August; each remains below its level of twelve months earlier. Apart from manufacturing, the generation of electricity increased, while mining output fell back 0.6 percent; the production of coal and of oil and gas field services declined.
The factory operating rate rose 1.3 percentage points, to 80.4 percent, but remained 0.7 percentage point below the 1967-97 average.
1998 Annual Revision of Industrial Production and Capacity Utilization
The Federal Reserve will publish revisions of its measures of
industrial production (IP), capacity, capacity utilization, and
industrial use of electric power toward the end of the year. The
revisions will begin with 1992 and will incorporate updated source
data for more recent years.
This regular updating of source data for IP will include
annual data from the Bureau of the Census's 1996 Annual Survey of
Manufactures and from selected editions of its 1997 Current Industrial
Reports. Annual data from the Department of the Interior on metallic
and nonmetallic minerals (except fuels) for 1996 and 1997 will also be
introduced. The updating will also include revisions to the monthly
indicators for each industry (physical product data, production-worker
hours, or electric power usage) and revised seasonal factors.
Capacity and capacity utilization will be revised to
incorporate preliminary data from the 1997 Survey of Plant Capacity of
the Bureau of the Census. The statistics on the industrial use of
electric power will incorporate more complete reports received from
utilities for the past few years as well as data from the 1996 Annual
Survey of Manufactures.
Once the revision is published, the revised data will be
available on the the Board's Web site,
http://www.federalreserve.gov/releases/g17 and on diskettes from
Publications Services (telephone 202-452-3245). The revised data will
also be available through the Economic Bulletin Board of the
Department of Commerce; for information about the Bulletin Board, call
202-482-1986. Further information on these revisions is available
from the Board's Industrial Output Section (telephone 202-452-3197).
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