INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION
[Annual Revision Notice Below]

Industrial production increased 0.8 percent in December after having risen 0.3 percent in November. The rate of change for industrial production was revised down in November but revised up in September and October; the net effect of the revisions from July to November left the level of industrial production in November slightly higher than was previously reported. For the fourth quarter as a whole, industrial production increased at an annual rate of 2.4 percent, a slower pace than in the earlier quarters of the year. In the manufacturing sector, output moved up 0.4 percent in December with gains in both durables and nondurables. Excluding motor vehicles and parts, factory output increased 0.5 percent. The output of mines advanced 0.4 percent; the output of utilities surged 4.3 percent, as unusually cold weather boosted the demand for heating. At 94.9 percent of its 2007 average, total industrial production in December was 5.9 percent above its level of a year earlier. The capacity utilization rate for total industry rose to 76.0 percent, a rate 4.6 percentage points below its average from 1972 to 2009.

INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION: SUMMARY
Seasonally adjusted

Industrial production	2007=100						Percent change
	2010						2010						Dec. '09 to Dec. '10
	July[r]	Aug.[r]	Sept.[r]	Oct.[r]	Nov.[r]	Dec.[p]	July[r]	Aug.[r]	Sept.[r]	Oct.[r]	Nov.[r]	Dec.[p]
Total index	93.5	93.7	94.0	93.8	94.1	94.9	.9	.2	.3	-.1	.3	.8	5.9
Previous estimates	93.4	93.6	93.7	93.5	93.9		.8	.2	.1	-.2	.4
Major market groups
Final Products	95.5	95.5	95.5	95.7	95.4	96.3	1.2	.0	-.1	.2	-.3	.9	5.5
Consumer goods	95.7	95.4	95.1	95.0	94.5	95.5	1.3	-.3	-.3	-.1	-.5	1.0	3.1
Business equipment	94.4	94.8	95.4	96.7	97.1	97.7	.8	.5	.6	1.4	.4	.6	11.7
Nonindustrial supplies	85.4	85.5	85.2	84.7	85.8	85.9	.0	.1	-.3	-.6	1.3	.1	3.3
Construction	78.9	79.3	79.0	79.3	80.6	80.0	-.9	.5	-.3	.4	1.6	-.8	8.6
Materials	94.4	94.9	95.6	95.3	95.8	96.7	.9	.5	.8	-.3	.4	1.0	7.1
Major industry groups
Manufacturing (see note below)	90.8	90.9	91.0	91.4	91.6	92.0	.8	.1	.1	.4	.3	.4	5.8
Previous estimates	90.7	90.8	90.9	91.2	91.5		.7	.1	.1	.3	.3
Mining	101.1	103.2	104.5	104.8	104.1	104.5	1.3	2.1	1.2	.3	-.7	.4	10.1
Utilities	102.6	101.4	101.9	97.5	99.0	103.2	1.0	-1.2	.5	-4.3	1.5	4.3	2.0

Market Groups

The production of consumer goods moved up 1.0 percent in December but fell at an annual rate of 1.6 percent in the fourth quarter. The output of consumer durable goods declined 0.5 percent in December. The indexes for all of its major components except home electronics moved down, with the largest decrease occurring for appliances, furniture, and carpeting. For the fourth quarter, the output of consumer durables fell 8.8 percent, in large part because of a drop of 17.6 percent in the production of automotive products. The output of nondurable consumer goods rose 1.4 percent in December, propelled by a gain in consumer energy products, which climbed 6.1 percent, as both sales to residences by utilities and the production of fuels increased. The production of non-energy nondurables was little changed, as increases in the indexes for clothing and for chemical products offset a decline in the index for paper products; the index for foods and tobacco was unchanged.

The production of business equipment increased 0.6 percent in December. Widespread gains lifted the output of business equipment at an annual rate of 10.0 percent for the fourth quarter, a third consecutive quarterly gain of 10.0 percent or more. For December, the index for transit equipment decreased 0.8 percent, but the indexes for information processing equipment and for industrial and other equipment rose 1.8 percent and 0.4 percent respectively.

The production of defense and space equipment was unchanged in December after having fallen 0.8 percent in November. In the fourth quarter, the index for defense and space equipment moved down at an annual rate of 3.2 percent following three consecutive quarterly gains.

The production index for construction supplies decreased 0.8 percent in December but rose at an annual rate of 4.6 percent in the fourth quarter. The output of business supplies increased 0.5 percent in December but was down for the quarter as a whole.

The production of materials rose 1.0 percent in December. The output of materials increased 4.2 percent in the fourth quarter, a sixth consecutive quarterly gain. In December, the production of durable materials advanced 0.9 percent, with gains of more than 1.0 percent in the indexes for equipment parts and for other durable materials; the output of consumer parts moved down 0.2 percent. The output of nondurable materials rose 0.7 percent: An increase of 1.8 percent in chemical materials more than offset declines in the output of paper and of textiles. The index for energy materials moved 1.3 percent higher, with widespread gains among its components.

Industry Groups

Manufacturing production increased 0.4 percent in December and rose 3.3 percent at an annual rate in the fourth quarter. The factory operating rate moved up to 73.2 percent in December, but it was still 6.0 percentage points below its long-run (1972 to 2009) average of 79.2 percent. The output of durable goods rose 0.4 percent, with large gains recorded in primary metals and in computers and electronic products. Output decreased for most of the other major durable goods industries, though the only drop of more than 1.0 percent was for nonmetallic mineral products. The output of durables moved up at an annual rate of 4.1 percent in the fourth quarter; output advanced in all of its major industries except motor vehicles and parts and aerospace and miscellaneous transportation equipment. The production of nondurable goods rose 0.5 percent in December. Gains of 1.0 percent or more for apparel and leather, for petroleum and coal products, for chemicals, and for plastics and rubber products were partly offset by decreases for textile and product mills, for paper, and for printing. For the fourth quarter, the production of nondurables advanced at an annual rate of 3.2 percent, about the same pace as for the third quarter.

The index for other manufacturing (non-NAICS), which consists of publishing and logging, was unchanged in December. For the fourth quarter, the index fell at an annual rate of 3.7 percent, its fourth consecutive quarterly decline. In December, the output of mines moved up 0.4 percent, and the capacity utilization rate for mining rose to 88.9 percent, a level 1.5 percentage points above its average from 1972 to 2009. The output indexes for both electric and natural gas utilities increased, as temperatures for December moved well below seasonal norms. The operating rate for utilities was 82.3 percent, a level 4.4 percentage points below its average from 1972 to 2009.

In December, capacity utilization rates at industries grouped by stage of process were as follows: For the crude stage, the operating rate increased 0.5 percentage point, to 89.0 percent, a rate that was 2.5 percentage points above its average from 1972 to 2009; for the primary and semifinished stages, utilization moved up 1.1 percentage points, to 73.2 percent, a rate 8.4 percentage points below its long-run average; and for the finished stage, utilization edged up 0.1 percentage point, to 74.3 percent, a rate 3.2 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 2011. The revised IP indexes will incorporate detailed data from the 2009 Annual Survey of Manufactures, conducted by the U.S. Census Bureau. Data from selected editions of the Census Bureau's 2009 Current Industrial Reports and annual data from the U.S. Geological Survey regarding metallic and nonmetallic minerals (except fuels) for 2009 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. In addition, the estimation methods for some series may be changed. Any modifications 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 additional 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. 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