INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION
[2004 Revision Notice Below]

Industrial production increased 0.8 percent in December after gains of 0.2 percent in November and 0.8 percent in October. In the manufacturing sector, output rose 0.7 percent in December, and increases occurred in most major industry groups. The output of utilities jumped 2.7 percent, and the output at mines advanced 0.4 percent. Over the twelve months ending in December, total industrial production increased 4.4 percent, to a level that is 117.8 percent of its 1997 average, while total industrial capacity expanded a modest 1.2 percent. The rate of capacity utilization in December, at 79.2 percent, was 2.4 percentage points above its year-earlier level but still 1.9 percentage points below its 1972-2003 average.

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 rose 0.7 percent in December and increased at an annual rate of 4.4 percent for the fourth quarter as a whole. In December, the index for consumer nondurables increased 0.8 percent and received a significant boost from the output of consumer energy products, which jumped 2.9 percent in December largely because of an increase in residential sales of electricity. Among non-energy nondurables, the index for paper products rose 1.2 percent while the indexes for clothing and for foods and tobacco moved up by smaller amounts; these gains more than offset a second monthly decline in the index for chemical products. The output of consumer durables rose 0.6 percent, as the index for automotive products turned back up and the indexes for appliances, furniture, and carpeting and for miscellaneous goods increased. The output of home electronics tumbled again and ended the year nearly 8-1/2 percent below its level in December 2003.

The production of business equipment increased 0.9 percent in December and was nearly 10 percent above its year-earlier level; for the fourth quarter as a whole, this index rose at an annual rate of 5.9 percent. The output of information processing equipment added another 1.0 percent in December, the fourth month of similarly sized gains. Industrial and other equipment rose 1.3 percent; however, average output in the fourth quarter was little changed after having risen sharply over the previous four quarters. The production of defense and space equipment continued to climb in December, reaching a level 9.0 percent higher than a year earlier.

In December, nonindustrial supplies posted its largest one-month gain--0.9 percent--since February, mainly because of a jump of 1.1 percent in the output of business supplies. The index for materials also rose 0.9 percent; the rise in output in this category was supported both by a 1.3 percent gain for energy materials and by broad-based gains among durable and nondurable materials categories.

Industry Groups

Manufacturing production increased 0.7 percent in December, and the factory operating rate moved up 0.4 percentage point, to 77.8 percent, the highest rate of utilization since December 2000. Nonetheless, the factory operating rate was still more than 2 percentage points below its 1972-2003 average. In December, the production of durable goods increased 0.9 percent. The largest gain among the durable goods industries was in primary metals, in which output rose 3.0 percent. The production of computer and electronic products registered a 1.2 percent gain, and its level was 16.4 percent higher than a year earlier. Among the selected high-technology industries, the output of computer and peripheral equipment continued to expand at a monthly pace of about 1-1/2 percent; increases in the production of semiconductor and related electronic components strengthened for a second month in December after decelerating, on balance, over the previous eight months. The indexes for most other major categories of durable goods increased in December; the exceptions include wood products, which moved down for a second month, and electrical equipment, appliances, and components, which turned back down. The production of nondurable goods, which rose 0.3 percent, included output gains of at least 1 percent for textile and product mills, paper, and petroleum and coal products. Smaller production increases were posted in food, beverage, and tobacco products; apparel and leather; and printing and support. The production of chemicals edged down, and the output of plastics and rubber products was unchanged. Production in the non-NAICS manufacturing industries (logging and publishing) jumped 1.2 percent.

In December, the higher level of utilities output reflected a 3.0 percent increase in the output of electric utilities and a 1.3 percent rise in the output of natural gas utilities. The small gain in mining output was primarily the result of increases in crude oil extraction and coal mining. Capacity utilization for industries in the crude stage of processing rose 0.6 percentage point, to 86.4 percent, a rate that is equal to its 1972-2003 average. The operating rate for industries in the primary and semifinished stages increased 0.8 percentage point, to 80.6 percent, and the utilization rate for finished goods producers increased 0.4 percentage point, to 76.1 percent.

Revision of Industrial Production and Capacity Utilization

On December 22, 2004, the Federal Reserve Board issued its annual 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. Comprehensive source data from the Census Bureau's 2002 Economic Census were incorporated into the production database. In addition to these data, the revised IP indexes reflect data from selected editions of the Census Bureau's 2002 and 2003 Current Industrial Reports. Annual data from the U.S. Geological Survey regarding metallic and nonmetallic minerals (except fuels) for 2002 and 2003 were also introduced. The updating also 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 Census Bureau's 2003 Survey of Plant Capacity, which covers manufacturing, along with new data on capacity from the U.S. Geological Survey, the U.S. Department of Energy, and other organizations. The statistics on the industrial use of electric power incorporated additional information received from utilities for the past few years and included available data from the 2002 Economic Census.

The revision is available on the Board's website at www.federalreserve.gov/releases/G17. The revised data are also available through the website 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:

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

Release dates | Historical data | Documentation
Current Monthly Release   Other formats: ASCII | PDF (144 KB)
Supplemental Monthly Release   Other formats: ASCII | PDF (144 KB)
Annual Revision Release   Other formats: ASCII | PDF (150 KB)

Statistical releases