Industrial Production and Capacity Utilization - G.17

Current Release (271 KB PDF) (ASCII)

Industrial production increased 0.6 percent in July after moving up 0.1 percent in June. In July, manufacturing output advanced 0.8 percent primarily because of an increase in motor vehicle assemblies. The output of motor vehicles and parts jumped 10.6 percent, and production elsewhere in manufacturing edged up 0.1 percent. The index for mining rose 0.2 percent, while the index for utilities fell 1.0 percent. At 107.5 percent of its 2012 average, total industrial production in July was 1.3 percent above its year-earlier level. (The comparison base year for industrial production was advanced to 2012 in the annual revision to the statistics published on July 21, 2015.) Capacity utilization for the industrial sector increased 0.3 percentage point in July to 78.0 percent, a rate that is 2.1 percentage points below its long-run (1972–2014) average.

Industrial Production and Capacity Utilization: Summary

Market Groups

Most major market groups recorded gains in July. The largest increase was in the output of consumer goods, which rose 1.2 percent. This gain was largely attributable to an increase of 10.9 percent in the production of automotive products. Among the remaining categories of consumer goods, non-energy nondurables registered a small gain after decreasing in the previous two months, while energy products posted a loss of 1.3 percent. The index for business equipment edged up, as an increase of 3.5 percent for transit equipment was mostly offset by a decrease of 1.5 percent for industrial and other equipment; the production of information processing equipment was little changed. The output of business supplies moved down 0.2 percent, and the production of construction supplies moved up a similar amount for its fourth consecutive monthly gain. The index for materials rose 0.6 percent, with increases of 1.6 percent and 0.4 percent for durable and nondurable materials, respectively, and a decrease of 0.4 percent for energy materials.

Industry Groups

Manufacturing output rose 0.8 percent in July, as the production of durable goods advanced 1.2 percent and the production of nondurable goods increased 0.4 percent. The increase for durables was more than accounted for by the large gain in motor vehicles and parts; the output of other durables declined 0.2 percent, as decreases for machinery, for aerospace and miscellaneous transportation equipment, and for miscellaneous manufacturing outweighed increases elsewhere. Among the nondurable goods industries, the indexes for apparel and leather, for paper, and for plastics and rubber products each advanced 1.0 percent, while the indexes for textiles and product mills and for petroleum and coal products posted losses. The production of other manufacturing industries (publishing and logging) moved up 0.4 percent.

The capacity utilization rate for manufacturing rose 0.5 percentage point in July to 76.2 percent, a rate 2.3 percentage points below its long-run average. The operating rate for durable goods industries, at 76.6 percent, was only 0.3 percentage point below its long-run average, while the rate for nondurable goods, at 77.4 percent, was 3.0 percentage points below its long-run average. The capacity utilization rate for other manufacturing (publishing and logging) increased 0.4 percentage point to 58.1 percent. The utilization rate for mines edged down 0.1 percentage point to 84.4 percent, while the rate for utilities decreased 0.8 percentage point to 79.1 percent.

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 July 21, 2015. The classification system for the industry groups was advanced to the 2012 version of the North American Industry Classification System, and the comparison base year was advanced to 2012. The revised indexes incorporated new annual benchmark data for 2012 and 2013 for manufacturing, as well as other annual data, including information on the mining of metallic and nonmetallic minerals (except fuels). The weights for market-group splits of the indexes were updated with information from the 2007 benchmark input-output accounts from the Bureau of Economic Analysis. The updated IP indexes included 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 were 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 2014 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 U.S. Department of Energy, and other organizations.

Return to top