INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION

[2007 Revision Notice Below]

Industrial production fell 0.5 percent in February after having increased 0.1�percent in January. Much of the decrease in February resulted from a weather-related drop of 3.7 percent in the output of utilities. In the manufacturing sector, output decreased 0.2�percent in February, and declines were fairly widespread across industries. The output of mines moved up 0.4�percent. At 113.7 percent of its 2002 average, total industrial production was 1.0�percent above its year-earlier level. The capacity utilization rate for total industry in February fell 0.6 percentage point, to 80.9 percent, the lowest rate since November 2005.

INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION: SUMMARY
Seasonally adjusted

Industrial production	2002=100				Percent change
	2007		2008		2007		2008		Feb. '07 to Feb. '08
	Nov.	Dec.	Jan.	Feb.	Nov.	Dec.	Jan.	Feb.
Total index	113.9	114.2	114.3	113.7	.4	.2	.1	-.5	1.0
Previous estimates	114.0	114.1	114.2		.4	.1	.1
Major market groups
Final Products	114.6	115.1	115.2	114.7	.3	.4	.1	-.4	.5
Consumer goods	108.6	109.0	109.2	108.5	.1	.3	.2	-.6	-.9
Business equipment	134.1	135.2	135.3	135.5	.5	.8	.1	.1	4.9
Nonindustrial supplies	110.7	110.7	110.6	109.5	-.1	.0	-.1	-1.0	-.6
Construction	106.9	107.4	106.7	105.9	-.7	.4	-.6	-.8	-.9
Materials	114.6	114.6	114.7	114.2	.6	.0	.1	-.5	2.1
Major industry groups
Manufacturing (see note below)	115.7	115.8	115.8	115.5	.2	.2	.0	-.2	1.7
Previous estimates	115.7	115.9	116.0		.3	.2	.0
Mining	103.0	103.6	102.3	102.7	1.6	.6	-1.3	.4	2.6
Utilities	109.4	109.7	112.1	107.9	.4	.3	2.2	-3.7	-5.4

Market Groups

The production of consumer goods decreased 0.6 percent in February with declines in the production of both consumer durables and consumer nondurables. Among durable consumer goods, the production index for automotive products moved down 1.3�percent, to a level roughly the same as its year-earlier reading. The production of appliances, furniture, and carpeting dropped 3.1 percent further, and the output of miscellaneous consumer durables edged down. The output of home electronics advanced 1.2 percent after having fallen nearly 1 percent in the previous month. The output of non-energy nondurables advanced 0.2 percent; gains in the production of food and tobacco, chemical products, and paper products offset declines in clothing production. The output of consumer energy goods dropped as a result of lower sales by utilities to residences.

The output of business equipment edged up 0.1 percent in February, as an increase in information processing equipment outweighed decreases both in transit equipment and in industrial and other equipment. Information processing equipment rose 1.4�percent with continued gains in most of its components. A decrease of 0.4�percent in transit equipment resulted from declines in motor vehicle assemblies and in the production of civilian aircraft. The index for industrial and other equipment fell 0.5�percent; within industrial equipment, declines were widespread.

The output of defense and space equipment declined 0.3�percent in February after having increased 1.0 percent in January.

The output of construction supplies fell 0.8 percent in February after having decreased 0.6 percent in January; the level of production in February was nearly 1�percent below its year-earlier level and 5.2�percent below its peak in 2006. The output of business supplies declined 1.1 percent in February.

The production of materials fell 0.5 percent in February after having changed little in January. Within non-energy materials, the index for durable materials edged down 0.2 percent in February. A gain in equipment parts was outweighed by a decline in consumer parts, which reflected lower output of motor vehicle parts, and by a decrease in other durable materials. The output of nondurable materials moved down 0.3 percent; the indexes for textile materials, paper materials, and chemical materials each declined 0.3 percent. Energy materials fell 1.0 percent as a result of a decrease in utility output.

Industry Groups

Manufacturing production decreased 0.2 percent in February after having been unchanged in January. The factory operating rate fell 0.3 percentage point in February, to 79.3�percent, a level 0.5�percentage point below its 1972-2007�average. The production of durable goods moved down 0.4�percent. Large production declines were recorded in wood products, primary metals, motor vehicles and parts, furniture and related products, and miscellaneous products. Increases occurred in machinery and in computer and electronic products. The production of nondurables edged down 0.1�percent after having risen the same amount in January. In February, a decrease in printing and support, as well as small declines in some other categories, more than offset small gains in the production of food, beverage, and tobacco products; paper; and petroleum and coal products. The output of non-NAICS industries (publishing and logging) edged down 0.1�percent and was 0.7 percent below its year-earlier level.

The output of electric utilities fell 3.5 percent in February, and the output of natural gas utilities dropped 5.0 percent. The operating rate for utilities moved down 3.4�percentage points, to 84.7 percent, a level 2.0 percentage points below its 1972-2007 average. Mining production rose 0.4 percent; the capacity utilization rate for mining edged up to 92.0 percent, a rate 4.5 percentage points above its long-run average.

Capacity utilization at industries grouped by stage of process changed as follows: For the crude stage, utilization was unchanged at 90.2 percent, a rate that is 3.6 percentage points above its 1972-2007 average; for the primary and semifinished stages, utilization decreased 1.0�percentage point, to 80.9 percent; and for the finished stage, utilization edged down 0.2�percentage point to 78.0 percent.

Notice

Revision of Industrial Production and Capacity Utilization

The Federal Reserve Board will issue an annual revision to the indexes of industrial production (IP) and the related measures of capacity and capacity utilization on March 28, 2008. The revised IP indexes will incorporate data from the 2006 Annual Survey 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 update 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 indexes from 1972 to the present.

After the publication of the revision, later monthly releases will include new or revised indexes for a six-month reporting window, which will encompass one month of new data and revisions to the previous five months of data. The new longer reporting window will allow the incorporation of additional lagging data before an annual revision. Over the past year, with a six-month window, an additional 3 percent to 4 percent of IP would have reflected source data. 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 release 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 reflect the revised production indexes and 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 (www.federalreserve.gov/releases/G17). The revised data will also be available through the website of the Department of Commerce (www.stat-usa.gov). 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