FRB: G.17 Release-- Industrial Production and Capacity Utilization --December 15, 1999

INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION

[1999 Revision Notice Below]

INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION

Industrial production advanced 0.3 percent in November after a 0.8 percent increase in October. At 139.5 percent of its 1992 average, industrial production in November was 4.3 percent higher than in November 1998. The rate of capacity utilization for total industry was unchanged at 81.0 percent, a level 1 percentage point below its 1967-98 average.

INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION: SUMMARY Seasonally adjusted | Index, 1992=100 | Percent change | 1999 | 1999 | Nov. 98 to Industrial Production | Aug. Sept. Oct. Nov. | Aug. Sept. Oct. Nov. | Nov. 99 ------------------------------------------------------------------------------------------------------------------------ | | | Total index | 137.7 138.0 139.1 139.5 | .3 .2 .8 .3 | 4.3 Previous estimates | 137.6 137.6 138.5 | .2 .0 .6 | | | | Major market groups: | | | Products, total | 127.6 127.5 128.8 129.0 | .6 -.1 1.1 .1 | 3.1

Consumer goods | 117.6 116.9 118.8 118.9 | .7 -.6 1.6 .1 | 2.8

Business equipment | 173.9 173.8 174.9 175.4 | .7 -.1 .6 .3 | 5.0

Construction supplies | 132.9 134.0 135.0 136.0 | -.2 .8 .8 .7 | 4.4 Materials | 154.6 155.6 156.3 157.3 | -.3 .7 .5 .6 | 6.3 | | | Major industry groups: | | | Manufacturing | 142.5 142.9 144.0 144.6 | .4 .3 .8 .5 | 4.6

Durable | 174.4 174.9 176.1 177.0 | .3 .3 .7 .6 | 7.0

Nondurable | 111.5 111.8 112.8 113.2 | .4 .2 .9 .3 | 1.4 Mining | 98.5 98.4 99.2 99.9 | .8 -.1 .8 .7 | -1.5 Utilities | 117.8 116.9 119.2 116.4 | -1.7 -.8 1.9 -2.3 | 5.0 ------------------------------------------------------------------------------------------------------------------------ | | Capacity | Percent of Capacity | Growth | Average 1982 1988-89 1998 | 1999 | Nov. 98 to Capacity Utilization | 1967-98 Low High Nov. | Aug. Sept. Oct. Nov. | Nov. 99 ------------------------------------------------------------------------------------------------------------------------ | | | Total industry | 82.1 71.1 85.4 80.9 | 80.7 80.6 81.0 81.0 | 4.2 Previous estimates | | 80.6 80.4 80.7 | | | | Manufacturing | 81.1 69.0 85.7 80.2 | 79.7 79.7 80.0 80.1 | 4.7

Advanced processing | 80.5 70.4 84.2 79.4 | 78.8 78.7 79.1 79.1 | 5.6

Primary processing | 82.4 66.2 88.9 82.6 | 82.8 82.8 83.0 83.3 | 2.4 Mining | 87.5 80.3 88.0 84.2 | 81.9 81.9 82.6 83.2 | -.2 Utilities | 87.4 75.9 92.6 87.6 | 92.2 91.4 93.0 90.8 | 1.4 ------------------------------------------------------------------------------------------------------------------------ Note: Estimates for November are preliminary. Estimates from August to October are revised.

Market Groups

The output of consumer goods ticked up 0.1 percent in November after having risen 1.6 percent in October. The production of durable consumer goods fell back 0.3 percent, pulled down by a drop in home appliances and televisions. After having advanced nearly 1-1/2 percent in October, the output of nondurable non-energy consumer goods rose 3/4 percent, led by increases in food, tobacco, and consumer chemical production. A 3.6 percent decline in the output of energy products reflected an unusually warm November as well as disruptions at a couple of petroleum refineries.

The production of business equipment increased for a second month; gains in information processing equipment and other equipment offset decreases in industrial and transit equipment. Within the information processing group, the output of computers increased 2.1 percent, a step down from the high rates of growth seen recently. Within the "other equipment" category, farm machinery posted a large increase after having fallen much more sharply during the past spring and summer. The output of transit equipment was once again constrained by a drop in the production of commercial aircraft and parts.

The production of construction supplies rose 3/4 percent for the third month in a row to a level 4-1/2 percent higher than in November 1998. The output of materials increased 0.6 percent, a rise similar to the gains posted in the previous two months. Sizable increases in the production of steel and semiconductors (the output of which has accelerated in the past two months) lifted the production of durable goods materials 1.2 percent in November. The output of nondurable goods materials, which had jumped nearly 1 percent in October, edged up 0.1 percent.

Industry Groups

Manufacturing output rose 1/2 percent in November after a 3/4 percent gain in October. The increase in the output of durables was led by gains at makers of primary metals (particularly iron and steel), motor vehicles and parts, computers, semiconductors, and communications equipment. While most other durable goods industries recorded increases, the output of commercial aircraft and construction machinery declined noticeably. The ongoing contraction in the production of commercial aircraft reduced the output of aerospace and miscellaneous transportation equipment in November to a level about 13 percent below that of November 1998.

Production in nondurable manufacturing increased for a fourth month after earlier weakness; the level of production for nondurable manufacturing is 1.4 percent higher than a year earlier. Among nondurables, food production increased nearly 1 percent for a second month, as did chemicals and products. Losses were posted by the petroleum products, textile, apparel, and printing and publishing industries.

The factory operating rate edged up 0.1 percentage point, to 80.1 percent, the highest level since November 1998. The utilization rate for durable manufacturing was a bit above its 1967-98 average, while the rate for nondurable manufacturing industries was well below its average.

The output at utilities fell back 2-1/4 percent in November; mine production, which was boosted by an increase in oil and gas well drilling, increased for the second straight month.

Revision of Industrial Production and Capacity Utilization

On November 30, 1999, the Federal Reserve Board published a revision to the index of industrial production (IP) and the related measures of capacity and capacity utilization for the period from January 1992 to October 1999. The updated measures reflect both the incorporation of newly available, more comprehensive source data typical of annual revisions and, for some series, the introduction of improved methods for compiling the series. The new source data are for recent years, primarily 1997 and 1998, and the modified methods affect data from 1992 onward. In addition, the supplementary series on the gross value of products leaving the industrial sector are now expressed in 1996 dollars; these series begin in 1977.

The updated IP measures include some annual data from the Census Bureau's 1997 Census of Manufactures and from selected editions of its 1998 Current Industrial Reports. Annual data from the U.S. Geological Survey on metallic and nonmetallic minerals (except fuels) for 1997 and 1998 are also introduced. The updating includes revisions to the monthly indicator for each industry (either physical product data, production worker hours, or electric power usage) and revised seasonal factors.

The revision introduced improved measures of production for computers and office equipment (SIC 357) and motor vehicles (SIC 3711, 3). The new monthly measure for computers is derived from detailed information on the major products produced by the industry. For example, from 1994 to 1998, quarterly data on the physical quantity and average unit values of about 1,100 distinct models of personal computers, notebooks, servers, and workstations are used to construct the new IP index for computers; previously, monthly electric power use by the industry was used as the within-year indicator of production. The new measures of motor vehicle production incorporate price weights for the different models of light vehicles; previously, all autos and light trucks were weighted equally in compiling an aggregate figure. In addition, the monthly production indicators for bolts and fasteners (SIC 345) and for metalworking machinery (SIC 354) were changed from electric power use to production worker hours.

Capacity and capacity utilization rates have been revised to incorporate preliminary data from the Census Bureau's 1998 Survey of Plant Capacity, which covers manufacturing, along with other 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 web site, at www.federalreserve.gov/releases/g17, and on diskettes from Publications Services (telephone 202-452-3245). The revised data are also available through the STAT-USA web site of the Department of Commerce (www.stat-usa.gov). Further information on these revisions is available from the Board's Industrial Output Section (telephone 202-452-3197).

G.17 Release Tables:

Chart 1: Industrial Production and Capacity Utilization
Table 1A: Industrial Production: Market Groups (index)
Table 1B: Industrial Production: Market Groups (percent change)
Table 2A: Industrial Production: Industry Groups (index)
Table 2B: Industrial Production: Industry Groups (percent change)
Table 3: Capacity Utilization: Manufacturing, Mining, and Utilities
Table 4: Industrial Capacity: Manufacturing, Mining, and Utilities
Table 5A: Industrial Production, Capacity and Utilization for Total Industry: Historical Data
Table 5B: Industrial Production, Capacity and Utilization for Manufacturing: Historical Data
Table 6: Industrial Production: Industry Subtotals and Individual Series
Table 7: Industrial Production: Gross Value of Products
Table 8: Diffusion Indexes of Industrial Production
Table 9: Electric Power Use: Manufacturing and Mining

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Last update: December 15, 1999, 9:15 AM