INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION
[Annual Revision Notice Below]

Industrial Production and Capacity Utilization

Industrial production edged up 0.1 percent in March and increased at an annual rate of 7.8 percent in the first quarter. Manufacturing output rose 0.9 percent in March, led by widespread gains among durable goods industries. Factory production was likely held down in February by the winter storms but nonetheless rose at an annual rate of 6.6 percent for the first quarter as a whole. The output of mines increased 2.3 percent in March. Utilities output dropped 6.4 percent; after a relatively cold February, demand for heating fell in March as temperatures climbed to above-normal levels. At 101.6 percent of its 2002 average, industrial output in March was 4.0 percent above its year-earlier level. Capacity utilization for total industry advanced 0.2 percentage point to 73.2 percent, a rate 7.4 percentage points below its average from 1972 to 2009, but 3.7 percentage points above the rate from a year earlier.

INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION: SUMMARY
Seasonally adjusted

Industrial production	2002=100						Percent change
	2009			2010			2009			2010			Mar. '09 to Mar. '10
	Oct.[r]	Nov.[r]	Dec.[r]	Jan.[r]	Feb.[r]	Mar.[p]	Oct.[r]	Nov.[r]	Dec.[r]	Jan.[r]	Feb.[r]	Mar.[p]
Total index	98.9	99.6	100.3	101.2	101.5	101.6	.2	.7	.7	1.0	.3	.1	4.0
Previous estimates	98.9	99.5	100.0	100.9	101.0		.2	.7	.5	.9	.1
Major market groups
Final Products	102.9	102.9	103.7	104.9	105.1	105.4	.8	.0	.7	1.2	.2	.3	3.8
Consumer goods	100.3	100.3	100.9	101.8	101.8	101.6	.8	.1	.6	.9	-.1	-.2	3.3
Business equipment	109.6	109.3	110.6	112.3	113.0	114.6	.8	-.3	1.2	1.5	.7	1.4	3.6
Nonindustrial supplies	90.4	90.9	91.5	92.1	91.9	91.6	-.4	.6	.6	.7	-.3	-.3	.2
Construction	80.2	81.4	79.6	80.9	80.7	82.5	-1.8	1.5	-2.2	1.6	-.2	2.3	-.2
Materials	98.3	99.8	100.4	101.3	101.9	101.9	-.2	1.5	.7	.8	.6	.0	5.7
Major industry groups
Manufacturing (see note below)	97.6	98.6	98.5	99.4	99.6	100.5	-.1	1.1	-.1	.9	.2	.9	4.6
Previous estimates	97.6	98.6	98.4	99.3	99.1		-.1	1.0	-.2	.9	-.2
Mining	96.7	98.6	97.6	99.8	101.5	103.8	-.1	1.9	-1.0	2.2	1.7	2.3	5.2
Utilities	106.7	104.1	112.0	112.4	112.4	105.2	2.6	-2.5	7.6	.4	.0	-6.4	-.9

Market Groups

The output of consumer goods declined 0.2 percent in March. However, output in the first quarter rose at an annual rate of 4.9 percent, and the index in March was 3.3 percent above its year-earlier level. In March, the production of consumer durables strengthened 2.0 percent, the output of non-energy nondurables moved up 0.2 percent, and the production of consumer energy products contracted 3.7 percent. All major categories of consumer durables advanced. For the first quarter as a whole, the index for consumer durables expanded at an annual rate of 8.8 percent, as the index was supported by a further jump in automotive products. The gain for non-energy nondurables reflected increases in foods and tobacco and in clothing, which more than offset decreases in both chemical and paper products. The index for consumer nondurable energy products was weighed down in March by the weakness in residential sales by utilities.

The index for business equipment expanded 1.4 percent in March; this index rose 13.2 percent at an annual rate for the first quarter. The quarterly gain was boosted by strength in the production of industrial and other equipment and of information processing equipment. In March, information processing equipment recorded an increase of 1.9 percent and was led by gains in the production of search and detection equipment and of measuring and controlling instruments. Transit equipment advanced 2.2 percent, but this rise followed five months of declines; the index was down 6.9 percent at an annual rate in the first quarter. Industrial and other equipment increased 0.8 percent in March and gained 16.1 percent at an annual rate in the first quarter; the advance in the first quarter was this category's largest gain since the fourth quarter of 1987.

The production of defense and space equipment rose 1.7 percent in March and climbed 8.0 percent at an annual rate for the first quarter.

Within nonindustrial supplies, the output of construction supplies advanced 2.3 percent in March and increased 4.9 percent at an annual rate in the first quarter; nevertheless, the index in March was little changed from its year-earlier level. The production of business supplies fell 1.4 percent in March; apart from a drop in the sales of utilities to businesses, output edged up. For the first quarter as a whole, the production of business supplies moved up 3.8 percent at an annual rate.

The index for materials was unchanged in March; however, for the first quarter as a whole, this index rose at an annual rate of 9.2 percent. The production of durable materials increased 1.4 percent in March. All three major categories of durables expanded, with consumer parts rising 1.0 percent, equipment parts strengthening 0.8 percent, and other durable materials advancing 2.0 percent. The output of nondurable materials was unchanged, while the index for energy materials receded 1.7 percent because of the decline in utilities.

Industry Groups

Manufacturing output rose 0.9 percent in March after having edged up 0.2 percent in February. Capacity utilization for manufacturing moved up 0.6 percentage point in March to 70.0 percent, a rate 4.9 percentage points above its trough in June 2009.

The index for durable goods advanced 1.4 percent in March and rose 10.5 percent at an annual rate in the first quarter, the third consecutive quarterly increase. In March, all major categories of durables strengthened, and most categories posted gains of more than 1.0 percent. Expansions of 2.0 percent or more were recorded for computer and electronic products, for motor vehicles and parts, and for furniture and related products.

Nondurable manufacturing advanced 0.5 percent in March and increased 4.8 percent at an annual rate in the first quarter, the third straight quarterly gain. The output of petroleum and coal products jumped 3.0 percent in March, while plastics and rubber products posted an increase of 1.7 percent. The indexes for food, beverage, and tobacco products and for apparel and leather recorded more moderate gains.

In March, mining output gained 2.3 percent and capacity utilization rose to 90.2 percent, a rate 2.7 percentage points above its average for the period from 1972 to 2009. The gain in mining production mainly reflected increases in oil and gas well drilling, in stone, sand, and gravel quarrying, and in coal mining. The output of utilities fell 6.4 percent. Capacity utilization for utilities dropped 5.5 percentage points to 78.6 percent, a rate 8.0 percentage points below its average for the period from 1972 to 2009.

Capacity utilization rates in March at industries grouped by stage of process were as follows: At the crude stage, utilization increased 1.1 percentage points to 87.4 percent, a rate 0.9 percentage point above its average for the period from 1972 to 2009; at the primary and semifinished stages, utilization slipped 0.5 percentage point to 69.5 percent, a rate 12.1 percentage points below its long-run average; while at the finished stage, utilization moved up 0.6 percentage point to 71.8 percent, a rate 5.7 percentage points below its long-run average.

Revision of Industrial Production and Capacity Utilization

The Federal Reserve Board plans to issue on June 25, 2010, its annual revision to the index of industrial production (IP) and the related measures of capacity utilization. The revised IP indexes will incorporate detailed data from the 2007 Economic Census and the 2008 Annual Survey of Manufactures, both conducted by the U.S. Census Bureau. Data from selected editions of the Census Bureau's 2008 Current Industrial Reports will also be incorporated, as will annual data from the U.S. Geological Survey regarding metallic and nonmetallic minerals (except fuels) for 2008. The updating will include revisions to the monthly indicator (either product data or input data) and to seasonal factors for each industry. The annual revision will also introduce 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