Industrial Production and Capacity Utilization - G.17

Current Release (250 KB PDF) (ASCII)

Industrial production increased 0.4 percent in December after having fallen 0.3 percent in November. For the fourth quarter as a whole, industrial production rose at an annual rate of 3.1 percent, its 10th consecutive quarterly gain. In the manufacturing sector, output advanced 0.9 percent in December with similarly sized gains for both durables and nondurables. The output of utilities fell 2.7 percent, as unseasonably warm weather reduced the demand for heating; the output of mines moved up 0.3 percent. At 95.3 percent of its 2007 average, total industrial production in December was 2.9 percent above its level of a year earlier. The capacity utilization rate for total industry rose to 78.1 percent, a rate 2.3 percentage points below its long-run (1972--2010) average.

Industrial Production and Capacity Utilization: Summary

Market Groups

The production of consumer goods gained 0.2 percent in December and moved up at an annual rate of 1.1 percent in the fourth quarter. The output of consumer durable goods rose 0.3 percent in December, with increases in the indexes for automotive products, home electronics, and miscellaneous consumer durables partially offset by a decline in the index for appliances, furniture, and carpeting. The output of nondurable consumer goods rose 0.2 percent, but the index declined at an annual rate of 0.7 percent for the fourth quarter. In December, the production of non-energy nondurables advanced 0.7 percent, with gains in all of its component indexes other than clothing, while the output of consumer energy products decreased 1.0 percent.

The output of business equipment rose 0.8 percent in December. Increases of more than 1 percent were recorded by the indexes for information processing equipment and for industrial and other equipment, but the index for transit equipment decreased 1.0 percent. In the fourth quarter, the production of business equipment rose at an annual rate of 10.0 percent, in part because of a jump of 23.3 percent in the production of transit equipment. The gain in business equipment this past quarter was similar to the average pace of increase over the past two years.

The production of defense and space equipment fell 1.3 percent in December but advanced at an annual rate of 6.1 percent in the fourth quarter.

Among nonindustrial supplies, the production index for construction supplies increased 1.0 percent in December. The output of construction supplies rose at an annual rate of 1.2 percent in the fourth quarter, its eighth consecutive quarterly gain. Nevertheless, the index remained more than 20 percent below its level preceding the recent recession. The production of business supplies increased 0.3 percent in December but fell at an annual rate of 1.9 percent for the quarter as a whole.

The production of materials rose 0.6 percent in December. The index advanced at an annual rate of 3.9 percent in the fourth quarter after having climbed 6.7 percent in the third quarter. The production of durable materials jumped 1.6 percent in December, with gains for all of its major components. The output of nondurable materials rose 1.0 percent, with large increases in the output of textiles and chemicals slightly offset by a decline in the output of paper. The index for energy materials fell 0.6 percent but moved up at an annual rate of 2.5 percent in the fourth quarter.

Industry Groups

Manufacturing production climbed 0.9 percent in December to a level 3.7 percent above that of 12 months earlier; gains in December were widespread among the major industry groups. The factory operating rate moved up 0.6 percentage point to 75.9 percent, but it was still 3.1 percentage points below its long-run average of 79.0 percent. For the fourth quarter, manufacturing production increased at an annual rate of 3.9 percent.

The output of durable goods rose 0.9 percent in December. The indexes for wood products, primary metals, and machinery registered gains of more than 2 percent; the only major industries that recorded substantial decreases were nonmetallic mineral products, aerospace and miscellaneous transportation equipment, and furniture. For the fourth quarter, the output of durables moved up at an annual rate of 6.3 percent, with gains of nearly 10 percent or more in wood products; primary metals; electrical equipment, appliances, and components; motor vehicles and parts; and aerospace and miscellaneous transportation equipment.

The production of nondurable goods advanced 0.8 percent in December. The indexes for textile and product mills, for petroleum and coal products, for chemicals, and for plastics and rubber products all gained 1.0 percent or more, while the indexes both for paper and for apparel and leather fell. The output of nondurables increased at an annual rate of 1.5 percent in the fourth quarter. The index for other manufacturing (non-NAICS), which consists of publishing and logging, jumped 2.3 percent in December after having dropped 1.9 percent in November.

In December, the output of mines moved up 0.3 percent, and the capacity utilization rate for mining rose to 92.8 percent, a level 5.4 percentage points above its long-run average. The output of mines advanced at an annual rate of 10.4 percent in the fourth quarter, its third consecutive quarter of strong growth. In December, the output index for natural gas utilities dropped 8.5 percent and the index for electric utilities decreased 1.7 percent, as temperatures for the month moved well above seasonal norms. The operating rate for utilities was 76.8 percent, a level 9.8 percentage points below its long-run average.

In December, capacity utilization rates at industries grouped by stage of process were as follows: For the crude stage, the operating rate edged up 0.2 percentage point to 90.4 percent, a rate that was 4.0 percentage points above its long-run average; for the primary and semifinished stages, utilization increased 0.3 percentage point to 74.8 percent, a rate 6.5 percentage points below its long-run average; and for the finished stage, the operating rate increased 0.3 percentage point to 76.9 percent, a rate 0.4 percentage point 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 on March 30, 2012. The revised IP indexes will incorporate detailed data from the 2010 Annual Survey of Manufactures, conducted by the U.S. Census Bureau. Annual data from the U.S. Geological Survey regarding metallic and nonmetallic minerals (except fuels) for 2010 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 data through the fourth quarter of 2011 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).

Return to top