INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION

[Annual Revision Notice Below]

Industrial production decreased 0.6 percent in November with declines widespread across industries. The drop in output in September was revised down, and the rebound in October was revised up, in large part because both the decrease due to the September hurricanes and the subsequent partial recovery in October were larger than previously reported.

Manufacturing production dropped 1.4 percent in November despite the resumption of activity in the commercial aircraft industry after the resolution of a strike early in the month. The output of mines advanced 2.5 percent, primarily as a result of a further post-hurricane recovery in crude oil and natural gas operations in the Gulf of Mexico. Taken together, the rebounds after the strike and the hurricanes added almost 1 percentage point to the change in industrial production. The output of utilities rose 1.6 percent.

At 106.1 percent of its 2002 average, total industrial production in November was 5.5 percent below its level of a year earlier. The capacity utilization rate for total industry fell to 75.4 percent, a level 5.6 percentage points below its average level from 1972 to 2007.

INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION: SUMMARY
Seasonally adjusted

Industrial production	2002=100						Percent change
	2008						2008						Nov. '07 to Nov. '08
	June[r]	July[r]	Aug.[r]	Sept.[r]	Oct.[r]	Nov.[p]	June[r]	July[r]	Aug.[r]	Sept.[r]	Oct.[r]	Nov.[p]
Total index	111.3	111.3	109.8	105.2	106.8	106.1	.1	.0	-1.3	-4.1	1.5	-.6	-5.5
Previous estimates	111.3	111.4	110.1	105.9	107.3		.1	.1	-1.2	-3.7	1.3
Major market groups
Final Products	112.5	112.3	110.5	107.6	108.2	108.3	.3	-.2	-1.6	-2.7	.6	.1	-4.4
Consumer goods	106.2	106.2	103.9	102.4	104.0	103.3	.4	.0	-2.1	-1.4	1.5	-.7	-3.9
Business equipment	130.4	129.8	129.3	119.9	116.8	120.6	.0	-.4	-.4	-7.3	-2.6	3.2	-7.4
Nonindustrial supplies	105.7	105.8	104.9	102.2	102.5	100.8	-.4	.1	-.8	-2.6	.2	-1.6	-6.6
Construction	101.3	101.9	100.9	99.0	97.6	94.4	-.5	.6	-1.0	-1.9	-1.4	-3.3	-9.7
Materials	112.1	112.2	110.7	104.2	107.0	106.0	-.1	.1	-1.3	-5.9	2.7	-1.0	-6.2
Major industry groups
Manufacturing (see note below)	112.1	111.9	110.8	106.3	107.0	105.5	-.2	-.1	-1.1	-4.0	.6	-1.4	-7.3
Previous estimates	112.2	112.1	111.0	106.9	107.5		-.1	-.1	-1.0	-3.7	.6
Mining	104.2	105.7	105.1	95.1	102.0	104.6	.1	1.4	-.6	-9.5	7.2	2.5	1.6
Utilities	110.0	108.9	103.9	106.4	107.1	108.8	1.9	-1.0	-4.6	2.4	.7	1.6	-.2

Market Groups

The production of consumer goods decreased 0.7 percent in November. The output of consumer durables fell 3.0 percent, while the output of consumer nondurables edged down 0.1 percent. Among consumer durable goods, the decreases in production were broadly based: Automotive products dropped 2.6 percent; appliances, furniture, and carpeting fell 4.0 percent; home electronics moved down 1.7 percent; and miscellaneous goods declined 3.4 percent. Among consumer nondurable goods, the production of consumer energy products edged up 0.2 percent. The index for non-energy nondurable consumer goods declined 0.2 percent, as the output of paper products decreased 0.6 percent and the other major components recorded smaller losses.

The output of business equipment rose 3.2 percent in November. The production of transit equipment jumped more than 40 percent after having plunged in September and October because of the strike in the commercial aircraft industry. The index for industrial and other equipment moved down about 2 percent for a third consecutive month; this index now stands nearly 7 percent below its year-earlier level. The index for information processing equipment declined 0.7 percent, its sixth consecutive monthly decrease.

The output of defense and space equipment edged down 0.1 percent in November and was 2.1 percent below its year-earlier level.

Among nonindustrial supplies, the production of construction supplies decreased 3.3 percent in November, partly because of drops in concrete and product, stone mining and quarrying, and architectural and structural metals. The index for business supplies fell 1.0 percent and was 5.4 percent below its year-earlier level.

The output of materials declined 1.0 percent in November. The continued recovery in natural gas and crude oil extraction after the September hurricanes contributed to an increase of 2.8 percent in the production of energy materials. The production of durable materials dropped 3.0 percent, and the production of nondurable materials slumped 3.3 percent. All major components of durable and nondurable materials registered large declines.

Industry Groups

Manufacturing output fell 1.4 percent in November. The factory operating rate moved down to 72.3 percent, a level that was 7.4 percentage points below its 1972-2007 average. The index for durable goods industries decreased 1.3 percent, with declines widespread among its components. The largest drop among major industries was in primary metals, which fell more than 7 percent for a second straight month, mainly because of lower output at steel mills. Only the index for aerospace and miscellaneous transportation equipment moved up, but this gain of 12.8 percent reflected the return to work after the strike at a major commercial aircraft producer. The production of nondurable goods fell 1.6 percent. Among nondurables, the largest decline was seen in chemicals, which fell 3.6 percent. Other industries with declines of at least 2 percent included textile and product mills, plastics and rubber products, and paper.

The index for the other manufacturing category, which consists of publishing and logging, moved down 0.6 percent in November.

Capacity utilization rates in November at industries grouped by stage of process were as follows: For the crude stage, utilization increased 0.4 percentage point, to 86.0 percent, a rate 0.6 percentage point below its 1972-2007 average; for the primary and semifinished stages, utilization moved down 1.3 percentage points, to 74.6 percent, a rate 7.6 percentage points below its long-run average; and for the finished stage, utilization was unchanged at 72.4 percent, a rate 5.3 percentage points below its long-run average.

Revision of Industrial Production and Capacity Utilization

The Federal Reserve Board plans to issue its annual revision to the index of industrial production (IP) and the related measures of capacity utilization in late March of 2009. The revised IP indexes will incorporate data from selected editions of the U.S. Census Bureau's 2007 Current Industrial Reports. Detailed data from the 2007 Economic Census, however, are not expected to be available. Annual data from the U.S. Geological Survey regarding metallic and nonmetallic minerals (except fuels) for 2007 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 the methods for estimating the output of an industry will affect the index from 1972 to the present.

Capacity and capacity utilization will be revised to incorporate data from the Census Bureau's Quarterly 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 the revision 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