INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION

Industrial production advanced 1.1 percent in May after having risen 0.8 percent in April. At 116.9 percent of its 1997 average, output was 6.3 percent higher than its level in May 2003. Manufacturing output increased 0.9 percent in May and was just 0.3 percent below the peak reached in June 2000. Output at utilities increased 3.3 percent, a gain reflecting unseasonably warm weather, while production at mines edged down 0.4 percent. Capacity utilization for total industry increased to 77.8 percent, a rate that is 3.7 percentage points above its value in May 2003 but still 3.3 percentage points below its 1972-2003 average.

INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION: SUMMARY
Seasonally adjusted

Industrial production	1997=100				Percent change
	2004				2004				May '03 to May '04
	Feb.	Mar.	Apr.	May	Feb.	Mar.	Apr.	May
Total index	114.8	114.8	115.7	116.9	.8	.0	.8	1.1	6.3
Previous estimates	114.6	114.5	115.4		.7	-.1	.8
Major market groups
Final Products	110.8	110.8	111.6	112.6	.9	.0	.7	.9	5.5
Consumer goods	108.8	108.8	109.4	110.3	.7	.0	.6	.8	4.6
Business equipment	116.2	116.0	117.2	118.8	1.6	-.1	1.0	1.4	9.4
Nonindustrial supplies	112.1	112.2	113.4	115.3	.8	.1	1.0	1.7	6.6
Construction	104.3	104.9	105.9	107.4	.2	.6	1.0	1.4	6.5
Materials	119.8	119.8	120.8	122.1	.8	.0	.9	1.1	7.0
Major industry groups
Manufacturing (see note below)	115.8	116.2	117.0	118.1	1.1	.3	.7	.9	6.4
Previous estimates	115.8	115.9	116.7		1.1	.1	.7
Mining	93.2	93.0	93.8	93.5	-.5	-.2	.9	-.4	.8
Utilities	117.9	114.9	116.7	120.5	-.3	-2.5	1.5	3.3	9.4

Market Groups

The production of consumer goods moved up 0.8 percent in May, as an increase in the output of nondurable consumer goods more than offset a decline in the output of consumer durables. The decline in consumer durables was led by reductions in the indexes for automotive products and for appliances, furniture, and carpeting; in contrast, the production of home electronics and of miscellaneous goods increased. Within consumer nondurables, energy output rose, and production in the non-energy categories of paper products, foods and tobacco, and chemical products expanded further. The manufacture of clothing contracted in May after several months of rising production.

The index for business equipment moved up 1.4 percent in May after an upwardly revised gain of 1.0 percent in April. The production of information processing equipment surged 2.8 percent, the largest monthly increase since May 2000. Industrial and other equipment advanced for a seventh consecutive month, with a gain of more than 1-1/2 percent in May. A 1.7 percent decline in the output of transit equipment reversed a similarly sized increase in April. The production of defense and space equipment increased 0.5 percent in May.

The index for construction supplies rose 1.4 percent in May, while the index for business supplies increased 1.8 percent; indexes for both categories stood about 6-1/2 percent above their year-earlier levels. The pace of output gains for business supplies has picked up in recent months.

The production of materials moved up 1.1 percent in May, and the gains were spread across most groups. The indexes for all of the major nondurable materials categories increased in May. Among durable materials, the output of equipment parts continued to expand steadily, and production in the other durable materials category increased further; in contrast, the output of consumer parts declined for a third consecutive month.

Industry Groups

Manufacturing output, propelled by another month of widespread gains, increased 0.9 percent in May. The overall factory operating rate moved up 0.5 percentage point, to 76.4 percent, and has risen 3.8 percentage points since its recent low of 72.6 percent in May 2003. The production of durable manufacturing goods rose 0.9 percent in May, as all major categories in this group except motor vehicles and parts increased. The most significant gains occurred in computer and electronic products, machinery, and fabricated metal products. Among the high-technology industries, computers and semiconductors continued to make significant gains in output, while the production of communications equipment jumped after a string of recent declines. The index for nondurable goods, led by gains in the output of food, chemicals, printing and support activities, textiles, and paper, continued to increase steadily. Among the major nondurable categories, only the index for apparel and leather moved down.

The output at mines edged lower in May and brought the utilization rate for mining down to 85.1 percent, about the same as the first-quarter average. Output at utilities, spurred by a 4 percent increase in electricity generation, moved up in May; the operating rate at utilities was 88.0 percent, its highest level since February 2003.

By stage-of-process category, capacity utilization for industries in the crude stage was unchanged at 84.6 percent. For industries in the primary and semifinished stages, the operating rate increased 1.1 percentage points, to 80.6 percent. Capacity utilization for the finished stage rose 0.5 percentage point, to 73.6 percent.

Notice

This release includes revised estimates of the rate of increase in semiconductor manufacturing capacity from February 2004 onward.

G.17 Release Tables:

Ascii	Screen reader	Summary: Industrial Production and Capacity Utilization
Chart		Chart 1: Industrial Production, Capacity, and Capacity Utilization
Chart		Chart 2: Industrial Production and Capacity Utilization
Chart		Chart 3: Industrial Production and Capacity Utilization, High Technology Industries
Ascii	Screen reader	Table 1:Industrial Production: Market and Industry Groups (percent change)
Ascii	Screen reader	Table 2:Industrial Production: Special Aggregates and Selected Detail (percent change)
Ascii	Screen reader	Table 3: Motor Vehicle Assemblies
Ascii	Screen reader	Table 4: Industrial Production Indexes: Market and Industry Group Summary
Ascii	Screen reader	Table 5: Industrial Production Indexes: Special Aggregates
Ascii	Screen reader	Table 6: Diffusion Indexes of Industrial Production
Ascii	Screen reader	Table 7: Capacity Utilization: Manufacturing, Mining, and Utilities
Ascii	Screen reader	Table 8: Industrial Capacity: Manufacturing, Mining, and Utilities (percent change)
Ascii	Screen reader	Table 9: Industrial Production: Gross Value of Products and Nonindustrial Supplies
Ascii	Screen reader	Table 10: Gross-Value-Weighted Industrial Production: Stage-of-Process Groups
Ascii	Screen reader	Table 11: Electric Power Use: Manufacturing and Mining
Ascii	Screen reader	Table 12: Historical Statistics for IP, Capacity, and Utilization: Total Industry
Ascii	Screen reader	Table 13: Historical Statistics for IP, Capacity, and Utilization: Manufacturing
Ascii	Screen reader	Table 14: Historical Statistics for IP, Capacity, and Utilization: Total Industry excluding Selected High-Technology Industries
Ascii	Screen reader	Table 15: Historical Statistics for IP, Capacity, and Utilization: Manufacturing excluding Selected High-Technology Industries

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