INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION
Industrial production, which had risen only 0.2 percent in May and 0.1 percent in June, increased 0.7 percent in July. Because of high temperatures and the heavy use of air conditioning, electric utility output rose more than 3 percent; manufacturing output increased 0.6 percent, and mining output, 0.8 percent. At 135.1 percent of its 1992 average, industrial production in July was 3.6 percent higher than in July 1998. The rate of capacity utilization for total industry rose 0.4 percentage point, to 80.7 percent, 1.4 percentage points below its 1967-98 average.
INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION: SUMMARY
Seasonally adjusted
| Index, 1992=100 | Percent change
| 1999 | 1999 | July 98 to
Industrial Production | Apr. May June July | Apr. May June July | July 99
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| | |
Total index | 133.7 134.0 134.2 135.1 | .3 .2 .1 .7 | 3.6
Previous estimates | 133.7 134.0 134.2 | .3 .2 .2 |
| | |
Major market groups: | | |
Products, total | 125.6 125.8 125.7 126.2 | .3 .2 -.1 .4 | 2.3
Consumer goods | 115.5 115.7 115.9 115.9 | .2 .1 .1 .1 | 1.7
Business equipment | 170.6 171.3 170.5 171.9 | .8 .4 -.5 .8 | 5.2
Construction supplies | 132.0 132.7 131.9 133.1 | .3 .5 -.6 .9 | 3.6
Materials | 146.9 147.3 148.2 149.9 | .2 .2 .6 1.1 | 5.6
| | |
Major industry groups: | | |
Manufacturing | 138.0 138.4 138.6 139.4 | .4 .3 .1 .6 | 4.3
Durable | 164.1 165.0 165.4 166.6 | .6 .5 .3 .8 | 7.9
Nondurable | 111.8 111.7 111.7 112.1 | .1 -.1 .0 .3 | .0
Mining | 98.3 98.4 98.3 99.0 | -.7 .1 -.1 .8 | -5.4
Utilities | 115.8 115.4 115.8 118.7 | -.8 -.4 .4 2.5 | .3
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| | Capacity
| Percent of Capacity | Growth
| Average 1982 1988-89 1998 | 1999 | July 98 to
Capacity Utilization | 1967-98 Low High July | Apr. May June July | July 99
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| | |
Total industry | 82.1 71.1 85.4 81.1 | 80.4 80.4 80.3 80.7 | 4.1
Previous estimates | | 80.5 80.4 80.3 |
| | |
Manufacturing | 81.1 69.0 85.7 79.8 | 79.6 79.5 79.4 79.7 | 4.5
Advanced processing | 80.5 70.4 84.2 78.5 | 78.6 78.6 78.4 78.6 | 5.4
Primary processing | 82.4 66.2 88.9 83.4 | 82.5 82.4 82.5 83.0 | 2.4
Mining | 87.5 80.3 88.0 87.2 | 81.1 81.2 81.1 81.6 | 1.1
Utilities | 87.4 75.9 92.6 93.7 | 91.1 90.8 91.1 93.3 | .7
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Note: Estimates for July are preliminary. Estimates from April to June are revised.
Market Groups
The output of consumer goods edged up 0.1 percent for a third consecutive month. Because of a dip in motor vehicle assemblies, the output of consumer durable goods fell back 1.1 percent in July after solid increases earlier. The production of automotive products dropped 4.3 percent; it had increased more than 6 percent from March to June. The production of other durable consumer goods advanced 1.6 percent after having changed little in both May and June; a rebound in the output of appliances along with further strength in home computing equipment and room air conditioners accounted for the gain. The production of nondurable consumer goods, which had been weak in earlier months, rose 0.4 percent. A small increase in the production of non-energy products was accompanied by a rebound in the production of energy goods as residential sales of electricity jumped. Although the output of consumer nondurable goods increased, it remained 2.2 percent below its level of July 1998.
After having eased 0.5 percent in June, the output of business equipment rebounded 0.8 percent in July. The output of industrial equipment was up noticeably, reversing part of the cumulative losses over the preceding two months. The production of information processing equipment, which advanced 2.1 percent in July, has risen 16.2 percent over the past twelve months. The output of transit equipment and of other equipment declined again. Within these groups, the production of farm machinery and commercial aircraft weakened further; assemblies of light business vehicles fell back, but assemblies of medium and heavy trucks advanced more than 1 percent. The output of defense and space equipment, which had fallen 1 percent in June, edged up 0.2 percent.
The production of construction supplies, which dipped in June, bounced back in July, continuing the strong performance that has been evident since late 1997. The output of materials increased 1.1 percent. The output of durable goods materials, which accounts for more than half of total materials in terms of value added, rose 1.3 percent, nearly double the increase in June; all the major groups within this category posted sizable gains. The output of energy materials rose 1.9 percent, while the production of nondurable goods materials edged down.
Industry Groups
Manufacturing output advanced 0.6 percent in July after it had edged up 0.1 percent in June. Excluding motor vehicles and parts, the gain in July was 0.8 percent. Production of both durables and nondurables picked up. The 0.8 percent gain in the output of durables once again was led by significant advances at makers of high-technology equipment and parts; however, the production of motor vehicles and parts fell 2 percent, reversing its increase in June. The production indexes for furniture and fixtures; for stone, clay, and glass products; and for fabricated metal products all increased 1 percent in July. Among nondurables, rebounds in the production of petroleum products, rubber and plastics products, and apparel products were partly offset by declines in the leather, paper, and foods industries.
The factory operating rate rose 0.3 percentage point in July, to 79.7 percent, with increases in both advanced- and primary-processing industries. Capacity utilization in primary-processing industries rose 0.5 percentage point, to 83.0 percent, its highest level since January, while utilization in advanced-processing industries rose 0.2 percentage point, to 78.6 percent.
The operating rate at electric utilities, which rose 3 percentage points, to 97.6 percent, reflected both the higher use of air conditioning during the heat wave and the reluctance of some utilities in recent years to add capacity in a more competitive environment. The operating rate for mining rose 0.5 percentage point, to 81.6 percent, a level well below its long-run average. Some recovery in oil and gas well drilling and an increase in coal mining contributed to the increase.
Revision of Industrial Production and Capacity Utilization
In November the Federal Reserve will publish revisions to its measures of industrial
production (IP), capacity, capacity utilization, and industrial use of electric power. 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 some annual data from the
Bureau of the Census's 1997 Census of Manufactures and from selected editions of its 1998
Current Industrial Reports. Annual data from the U. S. Geological Survey on metallic and
nonmetallic minerals (except fuels) for 1997 and 1998 will also be introduced. The updating will
also include revisions to the monthly indicator for each industry (either physical product data,
production-worker hours, or electric power usage) and revised seasonal factors. In addition, the
revision will introduce improved measures of production for selected series.
Capacity and capacity utilization will be revised to incorporate preliminary data
from the 1998 Survey of Plant Capacity of the Bureau of the Census. The statistics on the
industrial use of electric power will incorporate additional information received from utilities for
the past few years and may include some data from the 1997 Census of Manufactures.
Once the revision is published, it will also be made available on 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 web site and
Economic Bulletin Board of the Department of Commerce. Further information on these
revisions is available from the Board's Industrial Output Section (telephone 202-452-3197).
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