Industrial Production and Capacity Utilization - G.17

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Release Date: September 15, 2017
Technical Q&A for Hurricane Harvey Effects Notice Below

Industrial production declined 0.9 percent in August following six consecutive monthly gains. Hurricane Harvey, which hit the Gulf Coast of Texas in late August, is estimated to have reduced the rate of change in total output by roughly 3/4 percentage point. The index for manufacturing decreased 0.3 percent; storm-related effects appear to have reduced the rate of change in factory output in August about 3/4 percentage point. The manufacturing industries with the largest estimated storm-related effects were petroleum refining, organic chemicals, and plastics materials and resins.

The output of mining fell 0.8 percent in August, as Hurricane Harvey temporarily curtailed drilling, servicing, and extraction activity for oil and natural gas. The output of utilities dropped 5.5 percent, as unseasonably mild temperatures, particularly on the East Coast, reduced the demand for air conditioning.

At 104.7 percent of its 2012 average, total industrial production in August was 1.5 percent above its year-earlier level. Capacity utilization for the industrial sector decreased 0.8 percentage point in August to 76.1 percent, a rate that is 3.8 percentage points below its long-run (1972–2016) average.

Industrial Production and Capacity Utilization: Summary
Seasonally adjusted
Industrial production 2012=100 Percent change
2017 2017 Aug. '16 to
Aug. '17
Mar.[r] Apr.[r] May[r] June[r] July[r] Aug.[p] Mar.[r] Apr.[r] May[r] June[r] July[r] Aug.[p]
Total index 103.9 105.0 105.1 105.3 105.7 104.7 .2 1.1 .1 .2 .4 -.9 1.5
Previous estimates 103.9 104.9 104.9 105.3 105.5 .2 .9 .0 .4 .2
Major market groups
Final Products 100.2 101.9 102.1 101.9 102.0 101.4 .4 1.8 .1 -.2 .1 -.5 .8
Consumer goods 103.6 105.0 105.6 105.2 105.6 104.8 .3 1.3 .6 -.3 .3 -.7 -.3
Business equipment 99.7 102.9 101.8 101.4 100.9 100.5 .4 3.1 -1.1 -.4 -.5 -.4 1.9
Nonindustrial supplies 105.4 105.7 105.6 105.5 105.9 104.7 .0 .3 -.1 -.1 .4 -1.2 .8
Construction 111.0 111.9 111.1 110.8 110.8 110.2 -1.3 .8 -.7 -.3 .0 -.6 2.9
Materials 106.3 107.0 107.1 107.7 108.4 107.2 .1 .7 .0 .6 .6 -1.1 2.4
Major industry groups
Manufacturing (see note below) 102.6 103.9 103.4 103.5 103.6 103.3 -.7 1.2 -.5 .2 .0 -.3 1.5
Previous estimates 102.6 103.8 103.2 103.4 103.4 -.7 1.1 -.6 .2 -.1
Mining 106.6 107.5 108.5 109.7 111.2 110.3 -.4 .9 .9 1.2 1.3 -.8 9.7
Utilities 101.5 101.6 104.4 103.4 104.9 99.2 8.2 .1 2.7 -1.0 1.5 -5.5 -7.8
Capacity utilization Percent of capacity Capacity
growth
Average
1972-
2016 		1988-
89
high 		1990-
91
low 		1994-
95
high
2009
low
2016
Aug.
2017 Aug. '16 to
Aug. '17
Mar.[r] Apr.[r] May[r] June[r] July[r] Aug.[p]
Total industry 79.9 85.2 78.8 85.0 66.7 75.8 75.9 76.6 76.6 76.7 76.9 76.1 1.1
Previous estimates 75.9 76.5 76.5 76.7 76.7
Manufacturing (see note below) 78.4 85.6 77.3 84.6 63.7 74.7 75.1 75.9 75.5 75.6 75.6 75.3 .7
Previous estimates 75.1 75.9 75.4 75.5 75.4
Mining 87.0 86.1 83.8 88.6 78.4 77.9 82.2 82.6 83.2 83.9 84.8 83.9 1.8
Utilities 85.6 93.2 84.7 93.2 78.1 81.1 75.8 75.8 77.9 77.1 78.2 73.9 1.1
Stage-of-process groups
Crude 86.1 87.7 84.5 90.1 76.3 78.2 81.6 82.1 82.6 83.5 84.1 82.7 2.0
Primary and semifinished 80.5 86.5 78.1 87.8 63.8 75.9 75.5 75.8 76.1 76.0 76.2 75.0 .7
Finished 76.9 83.4 77.3 80.6 66.7 74.6 74.3 75.6 75.0 74.9 74.9 75.0 .8
r Revised. p Preliminary.
Market Groups

The output of consumer goods moved down 0.7 percent in August. Consumer durables posted an increase of 0.8 percent, but this gain was offset by declines in the indexes for consumer nondurables and consumer energy products, which fell 1.1 percent and 4.8 percent, respectively. The large drop in the output of consumer energy products reflected the weather-related decrease in utilities output as well as the hurricane-related reduction in petroleum refining. The index for business equipment moved down 0.4 percent, as a decline of 1.1 percent in industrial and other equipment was partially offset by gains elsewhere. Construction supplies recorded a decrease of 0.6 percent, and the output of business supplies fell 1.5 percent. The production of materials dropped 1.1 percent. The indexes for energy materials and for nondurable materials each fell nearly 2 percent; although both indexes were reduced as a consequence of Hurricane Harvey, the output of energy materials was also lowered by the cut for utilities. The production of durable materials rose 0.5 percent.

Industry Groups

Manufacturing output decreased 0.3 percent in August. A gain of 0.3 percent for durables was outweighed by decreases of 0.9 percent for both nondurables and other manufacturing (publishing and logging). Among durable manufacturing industries, the largest increase was recorded by motor vehicles and parts, which rose 2.2 percent following a drop of 4.2 percent in July. Other notable gains in durable manufacturing in August came from the indexes for primary metals and for aerospace and miscellaneous transportation equipment, each of which advanced more than 1 percent. The largest contributors to the decline in nondurable manufacturing were the indexes for chemicals and for petroleum and coal products, both of which were held down by factory shutdowns related to Hurricane Harvey.

In August, the index for mining dropped 0.8 percent while the output of utilities fell 5.5 percent. Within mining, all of the major components recorded losses; the largest decrease was for oil and gas well drilling and servicing, which fell for a second month in a row. Even so, the index for mining in August was 9.7 percent above its year-earlier level.

Capacity utilization for manufacturing moved down 0.3 percentage point in August to 75.3 percent, a rate that is 3.1 percentage points below its long-run average. Utilization for durable manufacturing increased 0.2 percentage point to 74.5 percent, while the operating rate for nondurable manufacturing fell 0.7 percentage point to 77.2 percent. The operating rate for mining decreased 0.9 percentage point to 83.9 percent, and the rate for utilities fell 4.3 percentage points to 73.9 percent.

Technical Q&A for Hurricane Harvey Effects

A technical Q&A discussing the effect of Hurricane Harvey on industrial production for August will be published on the Board's website at https://www.federalreserve.gov/releases/g17/g17_technical_qa.htm#hurricaneharvey2017.

Note. The statistics in this release cover output, capacity, and capacity utilization in the U.S. industrial sector, which is defined by the Federal Reserve to comprise manufacturing, mining, and electric and gas utilities. Mining is defined as all industries in sector 21 of the North American Industry Classification System (NAICS); electric and gas utilities are those in NAICS sectors 2211 and 2212. Manufacturing comprises NAICS manufacturing industries (sector 31-33) plus the logging industry and the newspaper, periodical, book, and directory publishing industries. Logging and publishing are classified elsewhere in NAICS (under agriculture and information respectively), but historically they were considered to be manufacturing and were included in the industrial sector under the Standard Industrial Classification (SIC) system. In December 2002 the Federal Reserve reclassified all its industrial output data from the SIC system to NAICS.

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Last Update: September 15, 2017