INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION

[2007 Revision Notice Below]

Industrial production increased 0.1�percent in September after having been unchanged in August. At 114.4 percent of its 2002 average, total industrial production in September was 1.9 percent above its year-earlier level. For the third quarter as a whole, industrial production rose at an annual rate of 4.0�percent, a pace that was 1/2�percentage point faster than in the previous quarter. Output in the manufacturing sector rose 0.1�percent in September after a decline of 0.4�percent in August. The output of utilities edged down 0.1�percent in September after a surge in August; the output at mines expanded 0.2�percent in September. Capacity utilization for total industry was unchanged, at 82.1 percent, a rate just 0.1�percentage point above its year-earlier level but 1.1 percentage points above its 1972-2006 average.

INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION: SUMMARY
Seasonally adjusted

Industrial production	2002=100				Percent change
	2007				2007				Sept. '06 to Sept. '07
	June	July	Aug.	Sept.	June	July	Aug.	Sept.
Total index	113.5	114.2	114.3	114.4	.5	.6	.0	.1	1.9
Previous estimates	113.6	114.2	114.4		.6	.5	.2
Major market groups
Final Products	114.7	115.4	115.2	115.1	.6	.7	-.2	-.1	2.1
Consumer goods	109.2	109.8	109.8	109.4	.4	.5	-.1	-.3	1.6
Business equipment	132.2	133.9	133.2	133.8	.8	1.3	-.5	.4	4.1
Nonindustrial supplies	111.2	111.2	111.7	111.8	.4	.0	.4	.2	1.1
Construction	110.2	109.9	109.7	109.5	1.0	-.2	-.2	-.2	-.7
Materials	113.2	114.2	114.3	114.6	.4	.9	.2	.2	2.1
Major industry groups
Manufacturing (see note below)	115.7	116.6	116.1	116.2	.6	.8	-.4	.1	1.6
Previous estimates	115.7	116.6	116.3		.7	.7	-.3
Mining	100.4	101.4	100.8	101.0	.5	1.0	-.6	.2	-.1
Utilities	107.3	106.4	111.3	111.3	-.7	-.9	4.6	-.1	6.4

Market Groups

The output of consumer goods fell 0.3 percent in September; the decrease was led by both a decline in the production of consumer durables and a pullback in the output of consumer energy products. Among durable consumer goods, the production index for automotive products fell 2.8�percent, in part because of a recent strike at a major motor vehicle manufacturer. Elsewhere, the production indexes for home electronics and for appliances, furniture, and carpeting changed little, and the output of miscellaneous durable goods declined 0.4 percent. The production of nondurable non-energy consumer goods increased 0.1�percent, as a third consecutive month of gains in the index for consumer chemical products and a bounceback in the production of paper products more than offset lower output of foods and tobacco. After a jump in August, the index for consumer energy goods decreased last month, as gasoline output fell.

The index for business equipment rose 0.4 percent in September. The output of transit equipment edged up 0.2 percent. Gains in the production of civilian aircraft and related equipment offset lower motor vehicle assemblies. The index for information processing equipment climbed 0.8 percent, and the index for industrial and other equipment increased 0.4 percent. Gains within both of these groups were widespread. For the third quarter as a whole, the output of business equipment rose at an annual rate of 7.0 percent, a pickup of 1-1/4 percentage points from the previous quarter. The output of defense and space equipment moved higher in September; the increase of 5.1 percent (annual rate) for the third quarter as a whole marked the first quarterly gain for this index since the third quarter of 2006.

In September, construction supplies declined 0.2 percent for a third consecutive month; the index is 0.7 percent below its year-earlier level. The index for business supplies rose 0.3�percent in September because of higher output of non-energy business supplies; commercial energy products edged down.

The production of materials increased 0.2 percent in September. Within non-energy materials, the index for durable materials edged up 0.1�percent; a drop in consumer parts that reflected lower output of motor vehicle parts was offset by gains in the indexes for equipment parts and for other parts. Among nondurable materials, gains in the output of chemicals more than offset declines in the output of textiles and of paper. The output of energy materials climbed 0.4 percent.

Industry Groups

Manufacturing output increased 0.1 percent in September. The factory operating rate declined 0.1 percentage point, to 80.4 percent, a rate that is 0.6�percentage point above its 1972-2006 average. The production of durable goods dipped 0.1�percent. Decreases were recorded in motor vehicles and parts, wood products, nonmetallic mineral products, and furniture and related products, whereas increases occurred in miscellaneous manufacturing; electrical equipment, appliances, and components; aerospace and miscellaneous transportation equipment; primary metals; fabricated metal products; computer and electronic products; and machinery. The production of nondurable goods moved up 0.1 percent. Increases in the indexes for chemicals, for printing and support, and for apparel and leather more than offset declines elsewhere. The output of non-NAICS industries (logging and publishing) climbed 0.9�percent.

The output of utilities was little changed in September. The output of natural gas utilities decreased 0.2 percent; the output of electric utilities was unchanged. The operating rate at utilities decreased 0.2 percentage point, to 87.8 percent, a rate 1.1�percentage points above its 1972-2006 average. The output of mines increased 0.2�percent, and the capacity utilization rate for mining rose to 90.6 percent, a rate 3.2�percentage points above its long-run average.

By stage of process, the capacity utilization for industries at the crude stage climbed 0.6 percentage point in September, to 90.3 percent, a rate nearly 4 percentage points above its 1972-2006 average. In contrast, the operating rate for industries at the primary and semifinished stages decreased 0.2 percentage point, to 82.7 percent, just 0.5 percentage point above its long-run average. The operating rate for industries at the finished stage decreased 0.1 percentage point, to 78.6�percent, 0.8 percentage point above its long-run average.

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 data 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, later 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. The new longer reporting window will allow the incorporation of additional lagging data prior to an annual revision. The longer reporting window will cause the latest month of data shown for a few indexes to be as many as five months earlier than the latest value for aggregate industrial production; data for detailed production indexes are not shown in the supplement to the G.17 until either the underlying data are available or the reporting window is closed. Currently, the data issued for only one or two of the published indexes would be affected by this change.

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