INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION

Industrial production was unchanged in January after a gain of 0.7 percent in December. At 117.7 percent of its 1997 average, overall industrial output in January was 3.9 percent above its January 2004 level. The rate of capacity utilization for total industry edged down 0.1 percentage point, to 79.0 percent, in January, a rate 2 percentage points below its 1972-2004 average of 81.0 percent. Manufacturing production rose 0.4 percent after a similarly sized increase in December; the gain in December has been revised down 0.3 percentage point. The output of utilities dropped 3.0 percent in January, as temperatures were relatively warm, and mining output decreased 0.3 percent.

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 moved down 0.4 percent in January. The production of consumer durables declined 1.1 percent and was held down by a drop in the output of consumer light trucks and a decline of 1.2 percent for appliances, furniture, and carpeting. The volatile index for consumer home electronics nearly reversed its sharp declines in November and December but remained 5-3/4 percent below its year-earlier level. The production of consumer nondurables edged down 0.1 percent, as a 3.1 percent drop in consumer energy products was mostly offset by a gain of 0.6 percent in the output of non-energy goods. Among non-energy goods, the indexes for foods and tobacco, chemical products, and paper products all increased, while the index for clothing declined 1.3 percent.

The production of business equipment rose 1.1 percent to a level that was nearly 10 percent higher than its year-ago level. The categories of business equipment that contributed significantly to the overall increase in January included industrial and other equipment, which rose 1.4 percent, and information processing equipment, which increased 1.2 percent. The contribution from the index for transit equipment was somewhat smaller, as a jump in the output of medium and heavy trucks was largely offset by a contraction in the output of light vehicles for business. The production of defense and space equipment, which rose more slowly in the second half of 2004 than it did earlier in the year, was unchanged. The indexes for construction supplies and business supplies both edged up in January after larger gains in December.

The production of industrial materials was unchanged. A pullback in the output of energy materials was offset by a gain of 0.8 percent in the output of nondurable materials and an increase of 0.3 percent in durable materials; the indexes for equipment parts, basic metals, and miscellaneous durable materials all rose.

Industry Groups

Manufacturing production increased 0.4 percent in January and was 5.2 percent higher than it was in January 2004. The factory operating rate, at 78.0 percent, was the highest since December 2000 but was still 1.8 percentage points below its 1972-2004 average. The output of durable goods rose 0.3 percent, with significant increases in the machinery, wood products, computer and electronic products, and miscellaneous manufacturing industries. Durable goods industries with declining output included transportation equipment, in which lower motor vehicle assemblies accounted for much of the weakness, and nonmetallic mineral products, in which the largest decline was in cement and concrete product. The production of nondurable goods rose 0.5 percent. Industries with output gains of 1 percent or more were textile and product mills, paper, and chemicals. Food, beverage, and tobacco products and the printing and support industry registered smaller gains. Nondurable industries with declining output included apparel and leather, which retreated after having risen in the previous two months, petroleum and coal products, and plastics and rubber products. Production in the non-NAICS manufacturing industries (logging and publishing) jumped 1.5 percent after a gain of 1.2 percent in December.

Capacity utilization for industries in the crude stage of processing rose 0.1 percentage point, to 86.8 percent, despite a contraction in coal mining and crude oil extraction. The operating rate for industries in the primary and semifinished stages declined 0.3 percentage point, to 80.1 percent, largely because of the drop in utilities output. The utilization rate for finished goods producers increased 0.3 percentage point, to 76.2 percent, a rate that is 1.7 percentage points below its 1972-2004 average of 77.9 percent.

Notice

The data in this release include preliminary estimates of industrial capacity for 2005. Total industrial capacity is projected to expand 1.3 percent in 2005, the fastest increase since 2001 although still considerably less than the average gain of 3.7 percent over the past ten years. Manufacturing capacity is estimated to rise 1.5 percent after having expanded 1.1 percent in 2004; this acceleration primarily reflects a step-up in the pace of expansion outside of the high-technology industries. In 2005, as a result of decelerating gains in electricity generating capability, capacity expansion at utilities is estimated to slow for a fourth consecutive year. Overall, capacity at utilities is estimated to expand 1.1 percent, and capacity at mines is expected to contract 0.8 percent.

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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