INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION
INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION
Industrial production contracted 0.1 percent in July, its tenth consecutive monthly decline. Production in the second quarter was revised up but still fell at an annual rate of 4.2 percent. Manufacturing output, which had dropped sharply in June, was unchanged in July; utilities production declined 0.5 percent, and mining output decreased 0.6 percent. At 142.8 percent of its 1992 average, industrial production in July was 3.2 percent lower than in July 2000. Capacity utilization for total industry was 77.0 percent, a level more than 5 percentage points below its 1967-2000 average.
INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION: SUMMARY
Seasonally adjusted
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| 1992=100 | Percent change
| ----------------------------------------------- | ------------------------------------------------
| 2001 | 2001 | July '00 to
Industrial production | Apr. May June July | Apr. May June July | July '01
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| | |
Total index | 144.6 144.2 143.0 142.8 | -.3 -.3 -.9 -.1 | -3.2
Previous estimates | 144.2 143.5 142.5 | -.5 -.5 -.7 |
| | |
Major market groups: | | |
Products, total | 133.8 133.6 132.7 132.8 | -.5 -.2 -.6 .1 | -2.2
Consumer goods | 122.1 122.6 122.2 122.8 | -.3 .4 -.3 .5 | -.1
Business equipment | 193.3 191.5 188.2 187.7 | -1.2 -.9 -1.7 -.3 | -3.8
Construction supplies | 139.6 139.4 138.8 138.6 | -.6 -.2 -.4 -.2 | -3.6
Materials | 164.1 163.4 161.5 160.9 | .1 -.4 -1.2 -.3 | -4.8
| | |
Major industry groups: | | |
Manufacturing | 149.6 149.2 147.7 147.7 | -.3 -.2 -1.0 .0 | -3.9
Durable | 190.1 189.8 187.3 187.5 | -.6 -.2 -1.3 .1 | -3.7
Nondurable | 112.8 112.4 111.7 111.6 | .1 -.3 -.6 -.1 | -4.1
Mining | 103.5 103.8 103.1 102.5 | .8 .3 -.7 -.6 | 2.0
Utilities | 120.9 119.0 120.1 119.6 | -.9 -1.6 1.0 -.5 | .4
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| | Capacity
| Percent of capacity | growth
| --------------------------------------------------------------------------------- | --------------
| Average 1982 1988-89 2000 | 2001 | July '00 to
Capacity utilization | 1967-2000 Low High July | Apr. May June July | July '01
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| | |
Total industry | 82.1 71.1 85.4 82.3 | 78.4 78.0 77.2 77.0 | 3.3
Previous estimates | | 78.1 77.6 77.0 |
| | |
Manufacturing | 81.1 69.0 85.7 81.6 | 76.9 76.6 75.7 75.6 | 3.7
Advanced processing | 80.6 71.0 84.2 79.8 | 77.4 77.1 76.4 76.4 | 2.1
Primary processing | 82.2 65.7 88.3 85.6 | 77.2 76.7 75.6 75.3 | 6.5
Mining | 87.4 80.3 88.0 86.3 | 90.0 90.3 89.8 89.3 | -1.4
Utilities | 87.6 75.9 92.6 89.5 | 88.5 86.8 87.4 86.6 | 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 increased 0.5 percent after a decline of 0.3 percent in June. The 2.5 percent rise in the production of durable consumer goods was led by a sizable gain in the output of automotive products, particularly light trucks, which more than offset declines in the production of home electronics and appliances. The output of nondurable consumer goods was unchanged. The output of consumer energy products fell 0.7 percent; the production of non-energy nondurables edged up 0.1 percent, as increases in the production of foods and tobacco, clothing, and chemical products slightly outweighed a drop in the output of paper products.
Continuing its slide of recent months, the index for business equipment declined 0.3 percent in July. The production of information processing equipment fell 1.4 percent, its sixth consecutive monthly decline; since January, production has dropped nearly 7 percent, and the output of communications equipment over the period has been particularly weak. Although the production of transit equipment rose 2.0 percent in July, it remained more than 7 percent below its level in July 2000. The output of industrial and other equipment dipped 0.1 percent in July after having fallen almost 2 percent per month over the previous three months.
The output of business supplies fell 0.5 percent from a downward-revised June estimate; it was the sector's eighth consecutive monthly decline. Among the contributors to the contraction were paper business supplies, newspaper advertising, and job printing. The production of construction supplies fell 0.2 percent.
The output of industrial materials decreased 0.3 percent. The declining output of equipment parts, particularly semiconductors, was responsible for a decrease in the index for durable materials. Among nondurable materials, the output of chemicals, textiles, and paper continued to fall; the production of energy materials fell 0.6 percent.
Industry Groups
After a 1.0 percent contraction in June, manufacturing output held steady in July but remained 3.9 percent below its level in July 2000. After large declines in June, the production of durables edged up 0.1 percent in July, while the production of nondurables fell by the same amount; output in both industry groups remained well below their year-earlier levels. The largest advance among major durable goods industries was in motor vehicles and parts. Smaller gains were recorded by instruments, miscellaneous manufacturing, fabricated metal products, and stone, clay, and glass products. The output of electrical machinery dropped more than 2 percent; furniture and fixtures production also declined. Within nondurables, increases in apparel and in rubber and plastics production were slightly more than offset by declines in petroleum products and in printing and publishing.
The factory operating rate edged down 0.1 percentage point, to 75.6 percent. After June revisions, the utilization rate for primary-processing industries declined to 75.3 percent, while the rate for advanced processing held steady at 76.4 percent. The operating rates of almost all manufacturing industries contracted, as they have through much of the past year. Declines have been particularly notable in the industrial machinery and equipment industry, in which utilization has fallen to 73.5 percent from 82.1 percent in July 2000, and in the electrical machinery industry, in which the rate dropped 23.2 percentage points in the past year. The operating rate at utilities fell 0.8 percentage point to 86.6 percent. The operating rate for mining slipped 0.5 percentage point, to 89.3 percent.
Revision of Industrial Production and Capacity Utilization
On November 27, the Federal Reserve Board will publish revisions to the index of
industrial production (IP), to the related measures of capacity and capacity utilization, and to the
index of industrial use of electric power. The updated measures will reflect the incorporation of
newly available, more comprehensive source data typical of annual revisions. The new source
data are for recent years, primarily 1999 and 2000, although data from 1992 onward will be
subject to revision.
Industrial production and capacity utilization will continue to be based on the 1987
Standard Industrial Classification (SIC) until the 2002 annual revision, after which they will be
constructed from the North American Industrial Classification System (NAICS). The new
NAICS-related production indexes will be based on annual output measures that are constructed
by reclassifying the establishments in historical Censuses of Manufactures and Mineral
Industries under NAICS; annual output indexes constructed this way will maximize the
reliability and historical consistency of the IP industry detail.
The updating of source data for IP in the 2001 annual revision will include annual data
from the 1999 Bureau of the Census Annual Survey of Manufactures and from selected editions
of its 1999 and 2000 Current Industrial Reports. Annual data from the U.S. Geological Survey
regarding metallic and nonmetallic minerals (except fuels) for 1999 and 2000 will also be
introduced. The updating will include revisions to the monthly indicator for each industry
(either physical product data, production-worker hours, or electric power usage) and to seasonal
factors.
Capacity and capacity utilization will be revised to incorporate preliminary data from the
2000 Survey of Plant Capacity of the Bureau of the Census, which covers manufacturing, along
with other new data on capacity from the U.S. Geological Survey, the Department of Energy,
and other organizations. The statistics on the industrial use of electric power will incorporate
additional information received from utilities for the past few years and will include some data
from the 1997 Census of Manufactures and the 1998 and 1999 Annual Survey of Manufactures.
Once the revision is published, it will be made available on the Board's web site. The
revised data will also be available through the web site of the Department of Commerce. Further
information on these revisions is available from the Board's Industrial Output Section (telephone
202-452-3197).
G.17 Release Tables:
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