Industrial Production and Capacity Utilization

Release Date: November 14, 2003
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INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION
[2003 Revision Notice Below]

Industrial production rose 0.2 percent in October, and output over the previous three months was revised up slightly. At 111.8 percent of its 1997 average, the October index was 0.6 percent higher than its year-ago level. Manufacturing output edged up 0.1 percent in October; a large decline in the production of motor vehicles and parts held down the index. Mining output fell 0.8 percent, and production at utilities increased 2.0 percent. The rate of capacity utilization for total industry edged up 0.1 percentage point, to 75.0 percent, a level 6.3 percentage points below its 1972-2002 average.

INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION: SUMMARY
Seasonally adjusted

1997=100 Percent change

2003 2003 Oct. '02 to

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

Total index 110.8 111.0 111.5 111.8     .8     .2     .5     .2     .6

   Previous estimates 110.8 110.8 111.3           .7     .1     .4

Major market groups

Final Products 107.1 107.3 107.8 107.4     .6     .2     .4    -.3    -.1

   Consumer goods 105.8 105.9 106.2 105.8     .7     .0     .3    -.3    -.8

   Business equipment 109.3 110.0 110.8 110.2     .3     .6     .7    -.5    1.2

Nonindustrial supplies 108.7 109.0 108.8 109.9     .8     .3    -.1    1.0     .5

   Construction 101.5 101.9 102.2 103.2     .7     .4     .3    1.0     .0

Materials 115.4 115.5 116.5 116.9     .9     .1     .8     .4    1.4

Major industry groups

Manufacturing (see note below) 111.8 111.8 112.6 112.7     .5     .0     .7     .1     .7

   Previous estimates 111.7 111.5 112.3           .5    -.2     .7

Mining   93.4   93.0   94.0   93.2     .2    -.4    1.0    -.8    1.5

Utilities 111.3 113.3 111.0 113.2    3.1    1.8   -2.0    2.0    -.2


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

Total industry	81.3	70.9	85.2	75.4	74.5	74.6	74.9	75.0	1.1
Previous estimates					74.5	74.5	74.8

Manufacturing (see note below)	80.2	68.7	85.6	73.7	73.0	73.0	73.5	73.5	1.0
Previous estimates					73.0	72.8	73.3
Mining	86.9	78.6	85.6	83.2	85.0	84.7	85.6	84.9	-.5
Utilities	87.0	77.6	92.8	87.9	83.4	84.6	82.7	84.0	4.5

Stage-of-process groups
Crude	86.4	77.2	88.5	82.1	83.9	83.3	84.1	83.5	-1.2
Primary and semifinished	82.4	68.1	86.4	77.8	76.3	76.6	76.7	77.4	1.8
Finished	78.4	71.3	83.2	71.3	70.8	70.7	71.1	70.7	.9

r Revised. p Preliminary.
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 decreased 0.3 percent in October. The production of durable consumer goods fell 1.3 percent. A decline of 2.9 percent in the index for automotive products more than offset increases in all other major categories of consumer durables, including a rise of 2.3 percent in the output of home electronics. The production of consumer nondurables in October was unchanged from the September level. The output of non-energy nondurables slid 0.3 percent, but the output of consumer energy products moved up 1.2 percent. Within the non-energy category, declines in the production of foods and tobacco and of chemical products more than offset increases in the output of paper products and clothing; the output of clothing was still 13.6 percent below its year-earlier level despite the increase in October. The production of business equipment fell back 0.5 percent. Declines in the output of transit equipment and of industrial and other equipment, particularly farm equipment, outweighed an increase in the production of information processing equipment. The output of defense and space equipment moved up 0.5 percent and was 5.5 percent higher than its level a year earlier. The indexes for construction supplies and for business supplies each climbed 1.0 percent.

The output of industrial materials rose 0.4 percent in October and was 1.4 percent higher than its year-earlier level. The production of durable materials increased 0.9 percent, while the indexes for nondurable materials and energy materials were little changed. Among durable materials, the indexes for equipment parts and for other durables posted noticeable gains.

Industry Groups

Despite a decline of 3.8 percent in the production of motor vehicles and parts, manufacturing output edged up 0.1 percent in October. Excluding motor vehicles and parts, manufacturing output increased 0.4 percent. Among durable goods industries, sizable increases were posted for primary metals (particularly steel), wood products, and computers and electronic products. In the latter category, all three major components--computers, semiconductors, and communications equipment--recorded gains to move the index 15.5 percent higher than its year-ago level. Smaller increases were recorded in the indexes for fabricated metal products; electrical equipment, appliances, and components; furniture and related products; and nonmetallic mineral products. The output of nondurables fell 0.1 percent in October. Declines in the production of food, beverage, and tobacco products, of chemical products, and of paper more than offset increases in the other nondurables industries. The index for other manufacturing industries, which consists of logging and of newspaper, periodical, book, and directory publishing, moved up 1.6 percent.

The factory operating rate in October was 73.5 percent, 6.7 percentage points below its 1972-2002 average. By stage-of-processing category, capacity utilization for industries in the primary and semifinished stage increased 0.7 percentage point, to 77.4 percent. The utilization rates for industries in the crude and finished stages fell in October. The operating rate at mines declined 0.7 percentage point, to 84.9 percent, and the rate at utilities increased 1.3 percentage points, to 84.0 percent.

Revision of Industrial Production and Capacity Utilization

On November 10, the Federal Reserve Board issued 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 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 included annual data from the Census Bureau's 2000 and 2001 Annual Survey of Manufactures (ASM) 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 were also introduced. The updating included 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 were 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 incorporate additional information received from utilities for the past few years and include some data from the 2001 Annual Survey of Manufactures.

The revision release and revised data are available on the Board's web site, at www.federalreserve.gov/releases/G17. The revised data are also available through the web site of the U.S. 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: November 14, 2003, 9:15 AM