INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION

Industrial production was unchanged in May after a downwardly revised increase of 0.4 percent in April. Output in the manufacturing sector edged up 0.1 percent in May, and mining output moved up 0.5 percent after declining 0.6 percent in April. The output of utilities fell 1.3 percent in May after being elevated in April because of unusually cold temperatures. At 112.7 percent of its 2002 average, overall industrial production for May was 1.6 percent above its year-earlier level. The rate of capacity utilization for total industry fell 0.2 percentage point, to 81.3 percent, a level 0.3 percentage point above its 1972-2006 average.

INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION: SUMMARY
Seasonally adjusted

Industrial production	2002=100				Percent change
	2007				2007				May '06 to May '07
	Feb.	Mar.	Apr.	May	Feb.	Mar.	Apr.	May
Total index	112.5	112.2	112.7	112.7	.8	-.3	.4	.0	1.6
Previous estimates	112.6	112.2	113.0		.8	-.3	.7
Major market groups
Final Products	114.2	113.5	114.2	114.0	1.3	-.6	.6	-.1	2.8
Consumer goods	109.4	108.3	109.2	108.9	1.9	-1.0	.8	-.2	2.4
Business equipment	129.2	130.5	130.5	130.6	.3	1.0	.0	.0	4.6
Nonindustrial supplies	110.2	109.7	109.9	110.0	.2	-.4	.1	.1	-.3
Construction	106.8	107.9	107.9	108.4	-1.5	1.0	.0	.5	-2.5
Materials	111.8	111.9	112.4	112.4	.4	.1	.4	.0	1.2
Major industry groups
Manufacturing (see note below)	113.6	114.4	114.6	114.7	-.1	.6	.2	.1	1.9
Previous estimates	113.8	114.4	115.0		.0	.6	.5
Mining	100.0	100.9	100.3	100.7	-.1	.9	-.6	.5	.1
Utilities	114.1	104.7	108.2	106.9	8.6	-8.3	3.4	-1.3	1.1

Market Groups

The output of consumer goods decreased 0.2 percent in May after having risen 0.8 percent in April. The production of consumer durables edged down 0.1 percent in May, and the output of nondurables fell 0.3 percent. Within consumer durables, the output of automotive products declined 0.7 percent, as light vehicle assemblies decreased. The output indexes for the other major categories of consumer durables all increased. The output of home electronics rose 1.7 percent because of continued strength in home computers and audio and video equipment; the indexes for appliances, furniture, and carpeting and for miscellaneous goods both moved up 0.3 percent. Within consumer nondurables, the output of non-energy goods moved down 0.2 percent after a rise of 0.3 percent in April; a decrease in the production of foods and tobacco in May outweighed an increase in clothing. The output of consumer energy products dropped 0.6 percent. Residential sales by gas utilities fell, but the decrease was partly offset by an increase in the output of fuels.

The output of business equipment was unchanged for a second straight month in May; gains in transit equipment and in information processing equipment were offset by a decline in industrial and other equipment. Transit equipment rose 0.7 percent and was supported by continued strength in civilian aircraft and by a rebound in the production of medium and heavy trucks, and information processing equipment rose 0.5 percent, in part because of output gains in computers produced for businesses. Industrial and other equipment contracted 0.5 percent. The production of defense and space equipment expanded 1.6 percent, as the effects of a shipyard strike that started in early March and went into April ended. The output of construction supplies advanced 0.5 percent in May after being unchanged in April. The output of business supplies edged down 0.1 percent in May because of weakness in printing and in commercial sales of gas.

The production of materials was unchanged in May, as a gain in durable materials was offset by a decline in nondurable materials. Within durables, the output of equipment parts edged down 0.1 percent because of a decline in the output of semiconductors. The output of consumer parts edged down 0.1 percent because of a decrease in motor vehicle parts. The production of other durables increased 0.6 percent; the output was boosted by gains in plastic materials, nonferrous metals, and miscellaneous steel. Within nondurable materials, the production of chemical materials and of paper materials both fell, while the output of textiles rose 0.6 percent. The production of energy materials was unchanged in May after having risen 0.7 percent in April.

Industry Groups

Manufacturing output edged up 0.1 percent in May. However, capacity is estimated to have increased at a faster pace, and the factory operating rate declined 0.1 percentage point, to 79.9 percent. The production of durable goods edged up 0.1 percent in May after an increase of 0.5 percent in April. Increases were recorded in the indexes for nonmetallic mineral products, primary metals, computer and electronic products, and aerospace and miscellaneous transportation equipment. Decreases were recorded in the indexes for wood products; machinery; electrical equipment, appliances, and components; motor vehicles and parts; and miscellaneous manufacturing. The index for nondurable manufacturing was unchanged. The production of petroleum and coal products advanced 2.3 percent in May and reversed most of its April drop, which was caused by shutdowns at some petroleum refineries. Among other nondurables, increases were registered for apparel and leather and plastics and rubber products, but output decreased for textile product mills; food, beverage, and tobacco products; printing and related activities; and chemicals. The production of non-NAICS manufacturing (logging and publishing) moved down for a second consecutive month in May.

Mining production increased 0.5 percent in May due to gains in coal and natural gas. The output of utilities slipped 1.3 percent after having risen 3.4 percent in April. Capacity utilization for industries at the crude stage of processing moved down 0.2 percentage point, to 88.7 percent, in May. Capacity utilization for industries at the primary and semifinished stages also moved down 0.2 percentage point, to 81.8 percent, and capacity utilization for industries at the finished stage edged down 0.1 percentage point, to 78.4 percent.

Notice: This release includes the semiannual update to the capacity estimates for 2007. The estimated rate of increase in total industrial capacity from the fourth quarter of 2006 to the fourth quarter of 2007 is 1.8 percent, a downward revision of 0.3 percentage point from the initial estimate in mid-February; the rate of change for manufacturing capacity was revised down by a similar amount.

Note. The statistics in this release cover output, capacity, and capacity utilization in the U.S. industrial sector, which is defined by the Federal Reserve to comprise manufacturing, mining, and electric and gas utilities. Mining is defined as all industries in sector 21 of the North American Industry Classification System (NAICS); electric and gas utilities are those in NAICS sectors 2211 and 2212. Manufacturing comprises NAICS manufacturing industries (sector 31-33) plus the logging industry and the newspaper, periodical, book, and directory publishing industries. Logging and publishing are classified elsewhere in NAICS (under agriculture and information respectively), but historically they were considered to be manufacturing and were included in the industrial sector under the Standard Industrial Classification (SIC) system. In December 2002 the Federal Reserve reclassified all its industrial output data from the SIC system to NAICS.

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: Historical Statistics for IP, Capacity, and Utilization: Total Industry
Ascii	Screen reader	Table 12: Historical Statistics for IP, Capacity, and Utilization: Manufacturing
Ascii	Screen reader	Table 13: Historical Statistics for IP, Capacity, and Utilization: Total Industry excluding Selected High-Technology Industries
Ascii	Screen reader	Table 14: Historical Statistics for IP, Capacity, and Utilization: Manufacturing excluding Selected High-Technology Industries