Industrial Production and Capacity Utilization

Release Date: October 16, 2003
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INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION
[2003 Revision Notice Below]

Industrial production rose 0.4 percent in September after having edged down 0.1 percent in August. For the third quarter, total industrial production increased at an annual rate of 3.3 percent. Manufacturing output, led by an increase in motor vehicle production, climbed 0.7 percent in September and rose at an annual rate of 2.9 percent in the third quarter. The output at utilities fell back 2.2 percent in September, and the output at mines was unchanged.

At 110.6 percent of its 1997 average, industrial production was 0.6 percent lower in September than its year-earlier level. Capacity utilization for total industry increased to 74.7 percent but was still 1.3 percentage points below the rate in September 2002 and 6.6 percentage points below its 1972-2002 average.

INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION: SUMMARY
Seasonally adjusted

1997=100 Percent change

2003 2003 Sept. '02 to

Industrial production June July Aug. Sept. June July Aug. Sept. Sept. '03

Total index 109.4 110.2 110.2 110.6    -.1     .8    -.1     .4    -.6

   Previous estimates 109.3 110.1 110.2          -.1     .7     .1

Major market groups

Final Products 106.3 106.9 106.8 107.4     .0     .6    -.1     .5    -.1

   Consumer goods 106.5 107.2 106.8 107.4    -.2     .7    -.4     .6    -.5

   Business equipment 105.5 105.8 106.5 107.0     .4     .3     .7     .4     .1

Nonindustrial supplies 112.9 113.6 113.8 113.7    -.4     .6     .2    -.1   -1.8

   Construction 101.1 101.2 101.4 101.3    -.4     .1     .2    -.2   -3.1

Materials 111.1 112.3 112.2 112.7     .0    1.1    -.1     .4    -.6

Major industry groups

Manufacturing (see note below) 110.4 111.0 110.6 111.4     .1     .5    -.3     .7    -.6

   Previous estimates 110.4 110.9 110.7           .2     .4    -.1

Mining   93.5   93.5   93.9   93.9     .9     .0     .4     .0    1.8

Utilities 107.9 111.8 113.8 111.2   -2.8    3.5    1.8   -2.2   -1.9


									Capacity
	Percent of capacity								growth
	Average	1982	1988-89	2002	2003				Sept. '02 to
Capacity utilization	1972-2002	Low	High	Sept.	June	July	Aug.	Sept.	Sept. '03

Total industry	81.3	70.8	85.1	76.0	74.1	74.6	74.5	74.7	1.1
Previous estimates					74.1	74.6	74.6

Manufacturing (see note below)	80.2	68.6	85.6	74.1	72.6	72.9	72.7	73.1	.8
Previous estimates					72.6	72.9	72.7
Mining	86.9	78.6	85.6	83.8	84.7	84.7	85.0	84.9	.4
Utilities	86.7	77.2	92.6	88.4	80.8	83.4	84.5	82.4	5.3

Stage-of-process groups
Crude	86.4	77.2	88.6	83.1	82.4	82.9	82.6	82.6	-.1
Primary and semifinished	82.2	67.9	86.2	78.6	75.8	76.5	76.6	76.6	1.5
Finished	78.5	71.3	83.1	71.3	70.4	70.6	70.3	70.9	.8

r Revised. p Preliminary.
Note: The statistics in this release cover output, capacity, and capacity utilization in the industrial sector, which the Federal Reserve defines as manufacturing, mining, and electric and gas utilities. Manufacturing comprises those industries included in the North American Industry Classification System, or NAICS, manufacturing plus the logging and newspaper, periodical, book and directory publishing industries that have traditionally been considered manufacturing and included in the industrial sector.

Market Groups

The output of consumer goods rose 0.6 percent in September and increased at an annual rate of 1.9 percent in the third quarter. The gain in September was attributable primarily to a rise of 6.3 percent in the index for automotive products, which had declined 2.0 percent in August. All other categories of consumer durables posted declines. The output of non-energy nondurables edged up 0.1 percent and was 2.1 percent below its level in September 2002. The output of consumer energy products fell 2.1 percent, a decline that reversed a similarly sized increase in August.
The index for business equipment moved up 0.4 percent in September, its fifth consecutive monthly gain. In the third quarter, output in this category rose at an annual rate of 5.2 percent. Increases last month in the production of transit equipment, particularly motor vehicles, and of information processing equipment more than offset a small decline in the output of industrial and other equipment. Despite September's decline in the production of industrial and other equipment, output for the category rose at an annual rate of 3.4 percent in the third quarter.
The production of defense and space equipment rose 0.7 percent in September and was 6.2 percent higher than the level of a year earlier. The output of construction supplies decreased 0.2 percent, and the output of business supplies edged down 0.1 percent. The production of materials rose 0.4 percent; increases in the indexes for durable and nondurable materials more than offset a 0.8 percent drop in the index for energy materials.

Industry Groups

The 0.7 percent rise in manufacturing output in September reflected increases of 1.3 percent in the production of durables and 0.1 percent in nondurables. The factory operating rate moved up 0.4 percentage point in September, to 73.1 percent, but remained 1 percentage point below its year-earlier level. The output of durables rose at an annual rate of 7.7 percent in the third quarter, but the output of nondurables declined 1.3 percent. Among durables, a 6.6 percent rise in the output of motor vehicles and parts in September more than reversed the production decline in August. The continued weakness in steel production contributed to a September decline of 0.3 percent in the index for primary metal products, which rose at an annual rate of only 1.9 percent in the third quarter. The output for computers and electronic products posted a 1.4 percent gain last month and was 10.9 percent above its year-earlier level. Increases in the output indexes for chemicals and paper contributed to the net gain for the nondurables category as a whole.
Despite the drop in the output at utilities in September, this index posted a net gain in the third quarter of 7.1 percent at an annual rate. The operating rate at utilities fell 2.1 percentage points in September, to 82.4 percent; the utilization rate at mines slipped to 84.9 percent.
By stage-of-process category, capacity utilization rates for industries in the crude stage and in the primary and semifinished stage were unchanged in September. Utilization for industries in the finished goods stage rose 0.6 percentage point, to 70.9 percent.

Revision of Industrial Production and Capacity Utilization

On the afternoon of November 10, 2003, the Federal Reserve Board will issue a revision to the index of industrial production (IP), the related measures of capacity and capacity utilization, and the data on industrial use of electric power. The updated measures will reflect the incorporation of newly available, more comprehensive source data typical of annual revisions. The updating of source data for IP in the 2003 annual revision will include annual data from the Census Bureau's 2001 Annual Survey of Manufactures and from selected editions of its 2001 and 2002 Current Industrial Reports. Annual data from the U.S. Geological Survey regarding metallic and nonmetallic minerals (except fuels) for 2001 and 2002 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 revisions to seasonal factors.

Capacity and capacity utilization will be revised to incorporate preliminary data from the 2002 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 2001 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).

Statistical releases

Last update: October 16, 2003, 9:15 AM