Industrial Production and Capacity Utilization - G.17

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Industrial production increased 0.7 percent in February after having been unchanged in January. Manufacturing output rose 0.8 percent in February, and the index revised up for the previous two months. In February, the output of utilities advanced 1.6 percent, as temperatures for the month were near their seasonal norms after two months of unseasonably warm weather. The production at mines declined 0.3 percent, its third consecutive monthly decrease. At 99.5 percent of its 2007 average, total industrial production in February was 2.5 percent above its level of a year earlier. The capacity utilization rate for total industry increased to 79.6 percent, a rate that is 0.6 percentage point below its long-run (1972--2012) average.

Industrial Production and Capacity Utilization: Summary

Market Groups

The production of consumer goods increased 0.7 percent in February following a gain of 0.2 percent in January. In February, the index for consumer durables advanced 1.7 percent. Among durable consumer goods categories, the indexes for automotive products, home electronics, and miscellaneous goods all increased 1.3 percent or more, while the index for appliances, furniture, and carpeting moved up 0.2 percent after having jumped 3.2 percent in January. The production of consumer nondurables rose 0.4 percent in February as a result of a gain of 1.4 percent for consumer energy products. The index for non-energy nondurables was unchanged, with increases in foods and tobacco and in paper products offset by decreases in clothing and in chemical products.

After having fallen 1.3 percent in January, the output of business equipment increased 2.5 percent in February; the index was up 6.6 percent over its year-earlier level. The gain in February reflected a jump of 4.7 percent in transit equipment, a rise of 2.2 percent in industrial and other equipment, and an increase of 0.3 percent in information processing equipment. Each of these indexes had moved down in January.

The production of defense and space equipment decreased 0.6 percent in February following an increase of 1.8 percent in January. In February, the index was up 1.2 percent over its year-earlier level.

Among nonindustrial supplies, the output of construction supplies increased 1.5 percent in February for its fourth consecutive monthly gain exceeding 1 percent. The production of business supplies rose 0.8 percent in February after having risen 0.6 percent in January.

The production of materials to be processed further in the industrial sector moved up 0.3 percent in February. The output of durable materials rose 0.3 percent; an increase of 1.5 percent in equipment parts was partly offset by a decrease of 1.0 percent in consumer parts. The index for nondurable materials moved up 0.5 percent, primarily as a result of a gain of 1.0 percent for chemical materials. The index for energy materials edged up 0.2 percent; a reduction in the extraction of oil and natural gas held down the increase.

Industry Groups

Manufacturing output rose 0.8 percent in February after having fallen 0.3 percent in January; factory output in February was 2.0 percent above its level of a year earlier. Capacity utilization for manufacturing moved up 0.5 percentage point in February to 78.3 percent, a rate 0.5 percentage point below its long-run average.

The production of durable goods moved up 1.2 percent in February, with increases recorded in most major categories of durables. The only decline among major industries was in the output of primary metals, which fell 2.6 percent. The largest rise was in the output of motor vehicles and parts, which climbed 3.6 percent after having fallen 4.9 percent in January. In February, gains of between 1.6 percent and 2.0 percent were recorded in the indexes for wood products, nonmetallic mineral products, fabricated metal products, machinery, and furniture and related products. Capacity utilization for durable goods manufacturing increased 0.8 percentage point to 78.7 percent, a rate 1.6 percentage points above its long-run average.

Nondurable manufacturing output rose 0.3 percent in February after having declined 0.2 percent in January. In February, decreases in the indexes for textile and product mills and for printing and support activities were outweighed by gains in all of the other major nondurables groups. Capacity utilization for nondurable manufacturing increased 0.2 percentage point to 79.3 percent, a rate 1.5 percentage points below its long-run average. The output of non-NAICS manufacturing industries (publishing and logging) rose 0.4 percent.

In February, mining output declined 0.3 percent, and capacity utilization at mines fell 0.6 percentage point to 90.2 percent, a rate 2.8 percentage points above its long-run average. At electric and gas utilities, output increased 1.6 percent after having advanced 4.9 percent in January; the operating rate rose to 75.4 percent in February.

Capacity utilization rates in February at industries grouped by stage-of-process were as follows: At the crude stage, utilization fell 0.2 percentage point to 88.4 percent, a rate 2.1 percentage points above its long-run average; at the primary and semifinished stages, utilization rose 0.5 percentage point to 77.2 percent, a rate 3.8 percentage points below its long-run average; and at the finished stage, utilization increased 0.5 percentage point to 78.3 percent, a rate 1.1 percentage points above 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 22, 2013, at 12:00 noon EDT. The revised IP indexes will incorporate detailed data from the 2011 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 2012 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 2012 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.

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