INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION

[2007 Revision Notice Below]

Industrial production rose 0.3 percent in July after an increase of 0.6 percent in June. At 113.9 percent of its 2002 average, total industrial production in July was 1.4 percent above its year-earlier level. In July, manufacturing output moved up 0.6 percent and mining output advanced 0.7 percent, but the output of utilities fell 2.1 percent. Capacity utilization for total industry edged up to 81.9 percent, a rate 0.5 percentage point below the level in July 2006 but 0.9 percentage point above its 1972-2006 average.

INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION: SUMMARY
Seasonally adjusted

Industrial production	2002=100				Percent change
	2007				2007				July '06 to July '07
	Apr.	May	June	July	Apr.	May	June	July
Total index	113.1	112.8	113.5	113.9	.6	-.2	.6	.3	1.4
Previous estimates	112.9	112.8	113.4		.4	-.1	.5
Major market groups
Final Products	114.3	113.8	114.8	115.4	.5	-.4	.9	.5	2.6
Consumer goods	109.2	108.5	109.6	110.0	.6	-.7	1.0	.3	2.4
Business equipment	130.9	131.3	131.8	133.0	.2	.3	.4	.9	3.8
Nonindustrial supplies	110.9	110.6	111.2	110.9	.5	-.2	.5	-.3	-.4
Construction	108.3	108.7	110.0	109.9	.4	.4	1.2	-.1	-1.4
Materials	112.7	112.7	113.0	113.5	.6	.0	.3	.4	.9
Major industry groups
Manufacturing (see note below)	114.8	114.8	115.5	116.2	.4	-.1	.6	.6	2.0
Previous estimates	114.7	114.7	115.3		.2	.0	.6
Mining	100.2	100.3	100.7	101.4	.0	.1	.4	.7	.4
Utilities	109.7	107.9	108.1	105.8	2.8	-1.6	.1	-2.1	-2.7

Market Groups

The production of consumer goods rose 0.3 percent in July after an increase in June of 1.0 percent. In July, the production of durable consumer goods increased 1.0 percent; the rise was due mainly to a gain of 2.4 percent in the production of automotive products. Elsewhere, the index for miscellaneous durable goods moved up 0.3 percent, its fifth consecutive monthly gain, but the output of home electronics edged down 0.1 percent, and the output of appliances, furniture, and carpeting fell 1.2 percent. The production of nondurable non-energy consumer goods rose 0.4 percent; increases in the production of consumer chemicals and of paper goods more than offset a drop in the production of clothing. The index for consumer energy goods dropped 0.8 percent.

The index for business equipment rose 0.9 percent in July, after increases averaging 0.3 percent in the three preceding months. Higher output of motor vehicles and of civilian aircraft contributed to a July gain of 1.0 percent for transit equipment, and the output of information processing equipment moved up 0.7 percent. The index for industrial and other equipment rose 1.0 percent, as farm machinery bounced back from its drop in the previous month and other machinery categories also registered increases. The production of defense and space equipment rose 0.6 percent.

The index for construction supplies declined 0.1 percent in July. The index for business supplies fell 0.3 percent; a decrease in commercial sales of electricity more than offset an increase in non-energy business supplies.

The production of materials advanced 0.4 percent in July. Within non-energy materials, the index for durable materials rose 0.8 percent, as all of its major categories posted gains. Among nondurable materials, a decline in the output of textiles was more than offset by increases in the production of paper and of chemicals. The output of energy materials edged down 0.1 percent.

Industry Groups

Manufacturing output rose 0.6 percent in July, as production of both durable and nondurable goods increased. The increase in manufacturing followed a similarly sized gain in June. The production of durable goods rose 0.9 percent in July, and gains were widespread across components. The production of nondurable goods rose 0.3 percent, after a gain of 0.4 percent in June. Substantial advances in July occurred in paper, petroleum and coal products, and chemicals. However, the output indexes for textile and product mills, apparel and leather products, and plastics and rubber products all declined. The output of the non-NAICS manufacturing industries (logging and publishing) rose 0.8 percent. The factory operating rate advanced 0.3 percentage point, to 80.7 percent, a rate about 1 percentage point above its 1972-2006 average.

The output of utilities decreased 2.1 percent in July. Electricity generation stepped down 2.6 percent, while the output of natural gas utilities gained 0.5 percent. The operating rate at utilities dropped to 83.6 percent, a rate about 3 percentage points below its 1972-2006 average. The output of mines increased 0.7 percent, and the capacity utilization rate for mining rose 0.6 percentage point, to 91.0 percent, a rate 3.6 percentage points above its long-run average.

In July, capacity utilization for industries in the crude stage moved up 0.5 percentage point, to 90.0 percent. For industries in the primary and semifinished stages, capacity utilization edged down 0.1 percentage point, to 82.1 percent; for industries in the finished stage, capacity utilization increased 0.3 percentage point, to 79.1 percent.

Notice

Revision of Industrial Production and Capacity Utilization

The Federal Reserve Board plans to issue an annual revision to the index of industrial production (IP) and the related measures of capacity and capacity utilization around the end of March 2008. The revised IP indexes will incorporate data from the 2006 Annual Surveys of Manufactures and from selected editions of the 2006 Current Industrial Reports, all from the U.S. Census Bureau. Annual data from the U.S. Geological Survey regarding metallic and nonmetallic minerals (except fuels) for 2006 will also be incorporated. The updating will include revisions to the monthly indicator (either product data or input data) and to seasonal factors for each industry as well as changes in the estimation methods for some series. Any changes to methods for estimating the output of an industry will affect the index from 1972 to the present. After the release of the revision, subsequent monthly releases will include new or revised indexes for a six-month reporting window: one month of new data and revisions for the previous five months.

Capacity and capacity utilization will be revised to incorporate data from the Census Bureau's 2006 Survey of Plant Capacity, which covers manufacturing, along with new data on capacity from the U.S. Geological Survey, the Department of Energy, and other organizations.

Once the revision is published, it will be available on the Board's website at www.federalreserve.gov/releases/G17. The revised data will also be available through the website of the Department of Commerce. Further information on these revisions can be obtained from the Board's Industrial Output Section (telephone number 202-452-3197).

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