Industrial Production and Capacity Utilization - G.17

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Release Date: November 16, 2017

Industrial production rose 0.9 percent in October, and manufacturing increased 1.3 percent. The index for utilities rose 2.0 percent, but mining output fell 1.3 percent, as Hurricane Nate caused a sharp but short-lived decline in oil and gas drilling and extraction. Even so, industrial activity was boosted in October by a return to normal operations after Hurricanes Harvey and Irma suppressed production in August and September.[1] Excluding the effects of the hurricanes, the index for total output advanced about 0.3 percent in October, and the index for manufacturing advanced about 0.2 percent.

With modest upward revisions for July through September, industrial production is now estimated to have only edged down 0.3 percent at an annual rate in the third quarter; the previously published estimate showed a decrease of 1.5 percent.

Total industrial production has risen 2.9 percent over the past 12 months; output in October was 106.1 percent of its 2012 average. Capacity utilization for the industrial sector was 77.0 percent, a rate that is 2.9 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 Oct. '16 to
Oct. '17
May[r] June[r] July[r] Aug.[r] Sept.[r] Oct.[p] May[r] June[r] July[r] Aug.[r] Sept.[r] Oct.[p]
Total index 105.1 105.2 105.2 104.7 105.2 106.1 .0 .2 .0 -.5 .4 .9 2.9
Previous estimates 105.0 105.2 105.1 104.3 104.6 .0 .2 -.1 -.7 .3
Major market groups
Final Products 102.1 101.9 101.7 101.8 102.5 103.2 .1 -.1 -.2 .0 .7 .7 2.8
Consumer goods 105.4 105.1 105.2 105.2 105.7 106.6 .4 -.3 .1 .0 .5 .9 1.8
Business equipment 102.1 101.9 101.0 101.0 102.6 103.1 -1.0 -.1 -1.0 .0 1.5 .5 4.2
Nonindustrial supplies 105.6 105.3 105.3 104.6 105.4 106.0 -.2 -.3 .1 -.7 .7 .5 1.7
Construction 110.7 110.3 110.3 109.4 111.3 111.7 -.8 -.4 .0 -.8 1.7 .4 3.2
Materials 107.1 107.7 107.8 106.9 106.9 108.3 .0 .6 .1 -.8 .0 1.3 3.4
Major industry groups
Manufacturing (see note below) 103.4 103.5 103.3 103.1 103.5 104.8 -.5 .1 -.2 -.2 .4 1.3 2.5
Previous estimates 103.4 103.5 103.2 102.9 103.0 -.6 .2 -.4 -.2 .1
Mining 108.1 109.4 110.0 108.6 110.3 108.9 .8 1.2 .5 -1.2 1.5 -1.3 6.4
Utilities 104.4 103.4 104.0 102.7 101.6 103.6 2.7 -1.0 .5 -1.3 -1.0 2.0 .9
Capacity utilization Percent of capacity Capacity
growth
Average
1972-
2016 		1988-
89
high 		1990-
91
low 		1994-
95
high
2009
low
2016
Oct.
2017 Oct. '16 to
Oct. '17
May[r] June[r] July[r] Aug.[r] Sept.[r] Oct.[p]
Total industry 79.9 85.2 78.8 85.0 66.7 75.7 76.6 76.6 76.5 76.1 76.4 77.0 1.2
Previous estimates 76.5 76.6 76.5 75.8 76.0
Manufacturing (see note below) 78.4 85.6 77.3 84.6 63.7 75.0 75.6 75.6 75.4 75.2 75.5 76.4 .7
Previous estimates 75.5 75.6 75.3 75.1 75.1
Mining 87.0 86.1 83.8 88.6 78.4 79.4 82.9 83.7 83.9 82.6 83.7 82.4 2.5
Utilities 85.6 93.2 84.7 93.2 78.1 77.1 77.9 77.1 77.5 76.5 75.7 77.2 .8
Stage-of-process groups
Crude 86.1 87.7 84.5 90.1 76.3 79.4 82.7 83.3 83.5 81.7 81.2 82.4 2.5
Primary and semifinished 80.5 86.5 78.1 87.8 63.8 75.2 76.0 75.9 75.7 75.3 75.4 76.2 .5
Finished 76.9 83.4 77.3 80.6 66.7 74.8 75.0 75.0 74.9 75.1 75.9 76.1 .8
r Revised. p Preliminary.
Market Groups

The output of consumer goods moved up 0.9 percent in October, with gains for both durables and nondurables. Among the major components of consumer goods, only the indexes for home electronics and for foods and tobacco moved down. The output of business equipment rose 0.5 percent, with increases posted by all of its major categories. A decline of 0.4 percent in defense and space equipment followed four consecutive months of increases. Construction supplies and business supplies recorded gains of 0.4 percent and 0.6 percent, respectively. The production of materials rose 1.3 percent despite a small decrease in energy materials; all major components of both durable and nondurable materials posted gains. In particular, the output of chemical materials jumped 12.3 percent, as factories shuttered by Hurricane Harvey returned to normal operations.

Industry Groups

Manufacturing output rose 1.3 percent in October, and upward revisions to previous months reduced the decrease estimated for the third quarter to 1.2 percent at an annual rate. In October, the index for durables increased 0.4 percent, and the index for nondurables increased 2.3 percent. Most durable goods industries posted gains, with the largest advance, 1.0 percent, recorded by motor vehicles and parts. Gains were also widespread among nondurable goods producers; notably, the return to more normal levels of production following the hurricanes led to jumps of 5.8 percent for chemicals and 4.0 percent for petroleum and coal products.

In October, the decline of 1.3 percent in mining output reflected reductions in all of its major components. The index for utilities rose 2.0 percent; output in August was revised up from a drop of 4.9 percent to a decline of 1.3 percent, and the rate of change in September was revised down from an increase of 1.5 percent to a decrease of 1.0 percent.

Capacity utilization for manufacturing was 76.4 percent in October, a rate that is 2.0 percentage points below its long-run average. Utilization for durables increased 0.2 percentage point to 75.7 percent, and the operating rate for nondurables rose 1.7 percentage points to 78.1 percent. The operating rate for mines fell 1.3 percentage points to 82.4 percent, and the rate for utilities rose 1.5 percentage points to 77.2 percent.

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.

[1] A technical Q&A discussing the effects of the recent hurricanes on industrial production is available on the Federal Reserve Board's website at https://www.federalreserve.gov/releases/g17/g17_technical_qa.htm#HarveyIrmaNate2017. Additional discussion about the estimation process is available at https://doi.org/10.17016/2380-7172.2086.
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Last Update: November 16, 2017