Revision of Industrial Production and Capacity Utilization

The Federal Reserve Board issued 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 incorporated data from the 2006 Annual Survey 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 were also incorporated. The update included 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 affected the indexes from 1972 to the present.

Monthly releases now include new or revised indexes for a six-month reporting window, which encompasses one month of new data and revisions to the previous five months of data. The new longer reporting window allows the incorporation of additional lagging data before an annual revision. Had a six-month window been used over the past year, an additional 3 percent to 4 percent of IP would have reflected source data. For a few indexes, the longer reporting window will cause the latest month of data shown to be as many as five months earlier than the latest value for aggregate IP; 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.

Capacity and capacity utilization have been 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.

The revision is now available on the Board's website (www.federalreserve.gov/releases/G17). The revised data are also 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).