Industrial Production and Capacity Utilization - G.17

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Industrial production declined 0.4 percent in November after edging up 0.1 percent in October. In November, manufacturing output moved down 0.1 percent, and mining posted a gain of 1.1 percent. The index for utilities dropped 4.4 percent, as warmer-than-normal temperatures reduced the demand for heating. At 103.9 percent of its 2012 average, total industrial production in November was 0.6 percent lower than its year-earlier level. Capacity utilization for the industrial sector decreased 0.4 percentage point in November to 75.0 percent, a rate that is 5.0 percentage points below its long-run (1972–2015) average.

Industrial Production and Capacity Utilization: Summary

Market Groups

The output of consumer goods decreased 0.5 percent in November. The production of consumer durables dropped 1.6 percent, with all of its major components recording decreases. Both consumer durables and its largest major category, automotive products, posted their first declines since May. The index for consumer non-energy nondurables increased 0.6 percent in November; its only major component to register a decline was paper products. The output of consumer energy products fell 4.5 percent, as an increase in consumer fuels was outweighed by a drop in residential utilities. Although information processing equipment posted a gain, decreases for transit equipment and for industrial and other equipment caused the index for business equipment to decline 0.3 percent. The output of defense and space equipment rose 0.8 percent. Construction supplies recorded an increase of 0.7 percent, and business supplies recorded a loss of 0.3 percent. The production of materials moved down 0.7 percent: Both energy materials and durable materials posted declines, whereas the output of nondurable materials inched up.

Industry Groups

Manufacturing output edged down 0.1 percent in November and was just 0.1 percent above its level of a year earlier. In November, the production of durables decreased 0.3 percent, the production of nondurables rose 0.3 percent, and the production of other manufacturing (publishing and logging) fell 0.7 percent. Among the major durable goods industries, primary metals recorded the largest gain, 2.3 percent, and motor vehicles and parts registered the largest drop, also 2.3 percent. Among nondurables, petroleum and coal products recorded the biggest increase, 3.3 percent, and a decrease of 1.4 percent for plastics and rubber products was the biggest loss.

The index for mining advanced 1.1 percent in November. Most mining industries posted increases, with coal being the notable exception. The output at coal mines dropped 6.8 percent in November after having climbed nearly 60 percent between its April trough and October. Nevertheless, the index in November remained about 18 percent below its level in late 2014.

Capacity utilization for manufacturing edged down 0.1 percentage point in November to 74.8 percent, a rate that is 3.7 percentage points below its long-run average. The operating rate for durables dropped to 75.9 percent, the rate for nondurables moved up to 74.7 percent, and the rate for other manufacturing (publishing and logging) fell to 60.0 percent. Utilization for mining jumped 1.1 percentage points to 78.2 percent; even so, it remained 9.1 percentage points below its long-run average. The rate for utilities fell 3.5 percentage points to 74.4 percent.

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 around the end of the first quarter of 2017. New annual benchmark data for 2015 for manufacturing will be incorporated, as will other annual data, including information on the mining of metallic and nonmetallic minerals (except fuels). The updated IP indexes 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 2016 from the U.S. Census Bureau's Quarterly Survey of Plant Capacity along with new data on capacity from the U.S. Geological Survey, the U.S. Department of Energy, and other organizations.

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