Industrial Production and Capacity Utilization - G.17

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Industrial production was unchanged in May after having decreased 0.4 percent in April. In May, manufacturing production rose 0.1 percent after falling in each of the previous two months, and the output at mines increased 0.7 percent. The gains in manufacturing and mining were offset by a decrease of 1.8 percent in the output of utilities. At 98.7 percent of its 2007 average, total industrial production in May was 1.6 percent above its year-earlier level. The rate of capacity utilization for total industry edged down 0.1 percentage point to 77.6 percent, a rate 0.2 percentage point below its level of a year earlier and 2.6 percentage points below its long-run (1972–2012) average.

Industrial Production and Capacity Utilization: Summary

Market Groups

The production of consumer goods edged down 0.1 percent in May after having declined 0.7 percent in April; the index in May was 1.2 percent higher than its level of a year earlier. The production of durable consumer goods moved up 0.2 percent in May, and the output of nondurables slid 0.1 percent. Among consumer durables, the indexes for automotive products; home electronics; and appliances, furniture, and carpeting moved up, while the index for miscellaneous goods decreased. The production of non-energy nondurables edged down 0.1 percent; losses in the indexes for foods and tobacco and for paper products outweighed gains in the production of clothing and of chemical products. After having fallen 3.1 percent in April, the output of consumer energy products declined 0.2 percent further in May; a decrease in sales by utilities to residences more than offset an increase in the production of fuels.

After having declined 0.3 percent in April, the output of business equipment edged up 0.2 percent in May and was 3.3 percent above its year-earlier level. The index for transit equipment increased 0.5 percent in May, primarily as a result of an increase in the production of medium and heavy trucks, and the index for information processing equipment rose 1.2 percent, with the gain concentrated in the output of electrical instruments. Widespread declines among the components of industrial and other equipment resulted in a decrease of 0.3 percent for that market group.

The output of defense and space equipment decreased 0.7 percent in May; the index last posted a gain in December 2012.

Among nonindustrial supplies, the production of construction supplies moved down 0.2 percent in May following decreases of 1.2 percent in both March and April; output in May was 2.6 percent above its level of a year earlier. After having fallen 0.9 percent in April, the production of business supplies declined 0.3 percent in May and stood 0.7 percent below its year-earlier level.

The production of materials to be processed further in the industrial sector advanced 0.2 percent in May and was 2.1 percent above its level of a year earlier. All major components of materials posted gains in May. The output of durable materials edged up 0.1 percent, as increases in the indexes for consumer parts and equipment parts were nearly offset by a decline in the index for other durable materials. Following four months of losses, the production of nondurable materials increased 0.4 percent in May. Among its major subcategories, both textile materials and chemical materials recorded gains while paper materials was unchanged. The output of energy materials edged up 0.1 percent to post its fifth consecutive monthly increase.

Industry Groups

Manufacturing output moved up 0.1 percent in May after having declined 0.3 percent in March and 0.4 percent in April. The index in May was 1.7 percent above its year-earlier level but was little changed, on net, since the turn of the year. The factory operating rate held steady in May at 75.8 percent, a rate 2.9 percentage points below its long-run average.

The output of durable goods advanced 0.2 percent in May and stood 2.9 percent above its year-earlier level. Among its major components, the largest gains were posted by wood products and by computer and electronic products, each of which increased 1.1 percent, and the largest losses were recorded in primary metals and in furniture and related products, each of which fell about 1 percent. Capacity utilization for durable goods manufacturing was unchanged at 75.9 percent, a rate 1.1 percentage points below its long-run average.

The production of nondurable goods edged up 0.1 percent in May after having declined in March and April. Among nondurables, the index for apparel and leather posted the largest gain, 3.1 percent, which partially offset its losses in the previous two months. The output of most of the other major components of nondurable manufacturing moved up in May; only the index for food, beverage, and tobacco products fell, and the index for paper was unchanged. Capacity utilization for nondurables held steady at 77.3 percent, a rate 3.4 percentage points below its long-run average.

Production for non-NAICS manufacturing industries (publishing and logging) decreased 0.4 percent in May for a sixth consecutive monthly decline; the index was 9.4 percent below its year-earlier level.

In May, production at mines advanced 0.7 percent following an increase of 1.1 percent in April. The gain in May reflected a large increase in coal mining. The operating rate for mining rose 0.3 percentage point to 88.2 percent, a rate 0.9 percentage point above its long-run average. The production index for electric and natural gas utilities decreased, and the operating rate for utilities declined 1.4 percentage points to 77.3 percent, a rate 8.9 percentage points below its long-run average.

Capacity utilization rates in May for industries grouped by stage of process were as follows: At the crude stage, utilization increased 0.4 percentage point to 86.9 percent, a rate 0.6 percentage point above its long-run average; at the primary and semifinished stages, utilization declined 0.4 percentage point to 75.5 percent, a rate 5.5 percentage points below its long-run average; and at the finished stage, utilization edged down 0.1 percentage point to 75.8 percent, a rate 1.3 percentage points lower than its long-run average.

Revision of Industrial Production and Capacity Utilization

The Federal Reserve Board issued its annual revision to the index of industrial production (IP) and the related measures of capacity utilization on March 22, 2013. The revised IP indexes incorporated 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 were also incorporated. The update included revisions to the monthly indicator and to seasonal factors for each industry. In addition, the estimation methods for some series have changed. Modifications to the methods for estimating the output of an industry affected the index from 1972 to the present.

Capacity and capacity utilization were 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.

The revision is available on the Board's website at www.federalreserve.gov/releases/G17.

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