INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION
[Annual Revision Notice Below]

Industrial production advanced 1.2 percent in May after having risen 0.7 percent in April. Manufacturing output climbed 0.9 percent last month, its third consecutive monthly gain of about 1 percent, and was 7.9 percent above its year-earlier level. Outside of manufacturing, the output of mines edged down 0.2 percent, and the output of utilities increased 4.8 percent. The jump in utilities reflected unseasonably warm temperatures that boosted air conditioning usage in May after uncharacteristically temperate weather in April reduced heating demand. At 103.5 percent of its 2002 average, total industrial output in May was 7.6 percent above its year-earlier level. The capacity utilization rate for total industry rose 1.0 percentage point to 74.7 percent, a rate 6.2 percentage points above the rate from a year earlier but 5.9 percentage points below its average from 1972 to 2009.

INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION: SUMMARY
Seasonally adjusted

Industrial production	2002=100						Percent change
	2009 Dec.[r]	2010					2009 Dec.[r]	2010					May '09 to May '10
		Jan.[r]	Feb.[r]	Mar.[r]	Apr.[r]	May[p]		Jan.[r]	Feb.[r]	Mar.[r]	Apr.[r]	May[p]
Total index	100.2	101.3	101.3	101.6	102.3	103.5	.7	1.1	-.1	.3	.7	1.2	7.6
Previous estimates	100.2	101.4	101.2	101.5	102.3		.7	1.2	-.1	.2	.8
Major market groups
Final Products	103.7	105.4	104.8	105.5	105.9	107.1	.8	1.6	-.6	.7	.4	1.1	7.6
Consumer goods	101.0	102.6	101.5	101.9	101.9	103.0	.7	1.6	-1.0	.4	-.1	1.2	6.3
Business equipment	110.6	112.0	112.3	113.5	115.4	116.9	1.2	1.2	.2	1.1	1.6	1.3	10.1
Nonindustrial supplies	91.4	91.9	91.3	91.2	92.4	93.8	.4	.5	-.7	-.1	1.3	1.4	3.6
Construction	79.4	80.7	80.3	82.2	84.7	85.3	-2.7	1.7	-.5	2.3	3.1	.8	3.9
Materials	100.3	101.2	101.9	101.8	102.6	104.0	.6	.8	.7	.0	.8	1.3	9.2
Major industry groups
Manufacturing (see note below)	98.5	99.4	99.3	100.5	101.4	102.3	-.1	.9	.0	1.2	.9	.9	7.9
Previous estimates	98.5	99.4	99.4	100.4	101.4		-.1	1.0	-.1	1.0	1.0
Mining	97.0	99.9	101.6	102.8	104.3	104.2	-1.6	2.9	1.7	1.2	1.5	-.2	9.6
Utilities	112.0	113.7	112.0	105.1	103.7	108.7	7.7	1.5	-1.5	-6.2	-1.3	4.8	4.2

Market Groups

The output of nearly all major market groups rose in May. The production of consumer goods increased 1.2 percent, boosted by higher output of both consumer durables and nondurables. Within consumer durables, which jumped 2.6 percent, large gains in the indexes for automotive products, home electronics, and miscellaneous goods were only slightly offset by a small loss in the index for appliances, furniture, and carpeting. The production of consumer nondurable goods moved up 0.8 percent. The output of non-energy nondurables rose 0.5 percent; all of the major categories for that index recorded increases except chemical products, which fell 1.1 percent. The output of consumer energy products moved up 1.6 percent, with gains in all of its components other than automotive gasoline, which fell sharply.

The output of business equipment rose 1.3 percent in May, a pace on par with the average monthly gain during the previous two months and somewhat above its average increase earlier in the recovery. The output of transit equipment climbed 2.5 percent following a decrease of 1.6 percent in April. The increase in May primarily resulted from higher output of trucks, which more than offset losses in civilian aircraft. Elsewhere in business equipment, the index for information processing equipment rose 0.9 percent, and the index for industrial and other equipment increased 1.2 percent. The output indexes for both of these categories have advanced substantially since last fall; gains in semiconductor manufacturing equipment and construction machinery have contributed significantly to the improvement in the industrial and other equipment category.

In May, the output of defense and space equipment moved down after four consecutive monthly increases. A strike at a producer of military cargo planes accounted for the loss.

Within nonindustrial supplies, the output of construction supplies increased 0.8 percent in May after two consecutive months of larger gains. The production of business supplies rose 1.7 percent in May, the second consecutive monthly increase after declining earlier in the year.

The output of materials to be further processed in the industrial sector increased 1.3 percent in May after having risen about 0.6 percent per month since the beginning of the year; the index in May was 9.2 percent above its year-earlier level. The production of durable materials climbed 2.0 percent, with widespread solid gains within consumer parts, equipment parts, and other durable materials. By contrast, the output of nondurable materials was unchanged in May, with a decline in chemical materials offsetting a small gain in paper materials and strong gains in both textile materials and other nondurable materials. The index for energy materials climbed 1.8 percent in May; most of its components advanced, with the notable exception of coal mining, which fell 5.9 percent.

Industry Groups

Manufacturing output rose 0.9 percent in May, the same pace as in April. Capacity utilization for manufacturing moved up 0.7 percentage point to 71.5 percent, a rate 6.4 percentage points above its trough in June 2009, but 7.7 percentage points below its average from 1972 to 2009.

The production index for durable goods advanced 1.7 percent in May; most major categories of durables strengthened. Sizable gains were recorded for wood products, primary metals, fabricated metal products, machinery, motor vehicles and parts, and furniture and related products.

The index for nondurable manufacturing was unchanged in May. Losses in chemicals, petroleum and coal products, and apparel and leather offset increases elsewhere. The largest gains among the major categories of nondurables were for printing and support, which advanced 1.7 percent, and for textile and product mills, which increased 1.4 percent. Production in the non-NAICS manufacturing industries (logging and publishing) rose 1.8 percent.

In May, mining output edged down 0.2 percent, and capacity utilization edged down to 90.6 percent, a rate 3.1 percentage points above its average for the period from 1972 to 2009. The small loss in mining production mainly reflected declines in coal mining and in stone, sand, and gravel quarrying. The output of utilities climbed 4.8 percent, and capacity utilization for utilities increased 3.7 percentage points to 81.0 percent, a rate 5.6 percentage points below its average for the period from 1972 to 2009.

Capacity utilization rates in May at industries grouped by stage of process were as follows: At the crude stage, utilization decreased 0.3 percentage point to 88.1 percent, a rate 1.6 percentage points above its average for the period from 1972 to 2009; at the primary and semifinished stages, utilization rose 1.6 percentage points to 71.9 percent, a rate 9.7 percentage points below its long-run average; and at the finished stage, utilization increased 0.6 percentage point to 72.4 percent, a rate 5.1 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, the annual revision to the index of industrial production (IP) and the related measures of capacity and capacity utilization. The base year for the IP index will be advanced to 2007 with this revision. 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 and 2009 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