INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION

[2001 Revision Notice Below]

In October, industrial production fell 1.1 percent, to 139.3 percent of its 1992 average, and was 6.3 percent below its level a year ago. Manufacturing output decreased 1.2 percent in October, mining output decreased 1.3 percent, and utilities production rose 0.6 percent. The rate of capacity utilization for total industry fell 0.9 percentage point, to 74.8 percent, a level 7.3 percentage points below its 1967-2000 average.

 INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION:  SUMMARY
 Seasonally adjusted
 -----------------------------------------------------------------------------------------------------------------------------------
                               |                    1992=100                     |                  Percent change
                               | ----------------------------------------------- | -------------------------------------------------
                               |       2001                                      |   2001                          |    Oct. '00 to 
 Industrial production         |       July        Aug.       Sept.        Oct.  |   July    Aug.   Sept.    Oct.  |      Oct. '01 
 -----------------------------------------------------------------------------------------------------------------------------------
                               |                                                 |                                 |
  Total index                  |      142.7       142.2       140.8       139.3  |    -.1     -.4    -1.0    -1.1  |           -6.3 
     Previous estimates        |      142.7       141.8       140.3              |    -.1     -.7    -1.0          |                
                               |                                                 |                                 |
  Major market groups:         |                                                 |                                 |
  Products, total              |      132.5       131.4       130.0       128.8  |     .0     -.8    -1.1     -.9  |           -5.5 
     Consumer goods            |      122.1       121.1       120.4       120.0  |     .4     -.8     -.6     -.4  |           -2.2 
     Business equipment        |      186.5       184.2       179.3       176.2  |    -.3    -1.2    -2.6    -1.7  |          -11.9 
     Construction supplies     |      139.1       138.3       138.0       135.3  |     .1     -.5     -.2    -2.0  |           -4.9 
  Materials                    |      161.1       161.6       160.3       158.2  |    -.2      .3     -.8    -1.3  |           -7.6 
                               |                                                 |                                 |
  Major industry groups:       |                                                 |                                 |
  Manufacturing                |      147.7       146.8       145.3       143.6  |     .2     -.6    -1.1    -1.2  |           -7.3 
     Durable                   |      187.5       185.9       182.6       179.2  |     .3     -.9    -1.8    -1.9  |           -9.3 
     Nondurable                |      111.6       111.2       110.9       110.6  |     .0     -.3     -.2     -.4  |           -4.9 
  Mining                       |      102.4       102.8       102.7       101.3  |    -.9      .3     -.1    -1.3  |            1.2 
  Utilities                    |      117.4       120.3       119.1       119.9  |   -2.1     2.5    -1.0      .6  |            -.1 
 -----------------------------------------------------------------------------------------------------------------------------------
                               |                                                                                   |    Capacity
                               |                                Percent of capacity                                |     growth
                               | --------------------------------------------------------------------------------- | ---------------
                               |     Average        1982     1988-89       2000  |   2001                          |    Oct. '00 to 
 Capacity utilization          |  1967-2000          Low        High       Oct.  |   July    Aug.   Sept.    Oct.  |      Oct. '01 
 -----------------------------------------------------------------------------------------------------------------------------------
                               |                                                 |                                 |
  Total industry               |       82.1        71.1        85.4        82.0  |   77.0    76.6    75.7    74.8  |            2.6 
     Previous estimates        |                                                 |   77.0    76.4    75.5          |                
                               |                                                 |                                 |
     Manufacturing             |       81.1        69.0        85.7        81.2  |   75.6    75.0    74.1    73.1  |            2.9 
        Advanced processing    |       80.6        71.0        84.2        79.9  |   76.1    75.4    74.3    73.4  |            1.9 
        Primary processing     |       82.2        65.7        88.3        84.5  |   75.8    75.3    74.7    73.6  |            4.8 
     Mining                    |       87.4        80.3        88.0        86.3  |   89.3    89.7    89.7    88.6  |           -1.4 
     Utilities                 |       87.6        75.9        92.6        89.5  |   85.1    86.9    85.7    86.0  |            4.0 
 -----------------------------------------------------------------------------------------------------------------------------------
 Note:  Estimates for October are preliminary.  Estimates from July to September are revised.
 
 
 

Market Groups

The output of consumer goods declined 0.4 percent in October. A drop of 2.6 percent in durable consumer goods included sizable declines in the output of automotive products, appliances, furniture and carpeting goods, and miscellaneous goods. Despite decreases in all major categories of non-energy nondurable consumer goods (the largest being a 1.1 percent drop in clothing output), a 2.1 percent increase in consumer energy products pushed the index for total consumer nondurables to a 0.2 percent gain for the month.

The production of business equipment, which fell 1.7 percent in October, was nearly 12 percent lower than in October 2000. The output of transit equipment declined more than 3 percent for a third consecutive month and has dropped 13.6 percent over the past twelve months. Production indexes for information processing equipment and for industrial and other equipment declined more than 1 percent in October. The output of defense and space equipment fell 0.5 percent but remained 1.6 percent above its level a year ago. The output of construction supplies, which decreased 2.0 percent, showed significant losses in many industries, including lumber and plywood. The production of business supplies slipped 0.3 percent and was 7.7 percent below its level a year ago.

The output of industrial materials declined 1.3 percent, its largest drop since June 1998. The output of steel and parts for motor vehicles declined substantially in October; overall, durable materials production decreased 1.8 percent, to 10 percent below its level a year ago. The output of nondurable materials, which had increased in the third quarter, fell 0.9 percent in October; most major components posted declines. The 0.6 percent decline in the production of energy materials was mostly attributable to reductions in coal and crude oil output.

Industry Groups

After having fallen 1.1 percent in September, manufacturing output dropped 1.2 percent in October. The combined two-month decrease was last exceeded in the winter of 1981-82. Reductions were evident in nearly all major industries. The production of durable goods fell 1.9 percent in October and has declined more than 9 percent over the past twelve months. The October decline was marked by noticeable cutbacks in the output of primary metals, motor vehicles and parts, lumber and products, and furniture and fixtures. The production of nondurables fell 0.4 percent; decreases in apparel products, textile mill products, and paper and products more than offset a 2.9 percent increase in petroleum products. The overall factory operating rate declined about 1 percentage point, to 73.1 percent, and decreases appeared both in advanced-processing and primary-processing industries.

At mines, production fell 1.3 percent; the utilization rate decreased to 88.6 percent but remained above its long-run average. The output of utilities increased 0.6 percent; the operating rate rose 0.3 percentage point, to 86 percent, 1.6 percentage points below its long-term average.

Revision of Industrial Production and Capacity Utilization

On November 27 at 11 a.m. eastern time, 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 (www.federalreserve.gov/releases/g17). 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: