INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION

[2001 Revision Notice Below]

INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION

Industrial production fell 0.8 percent in August, to 141.5 percent of its 1992 average. Having declined for eleven consecutive months, industrial production in August was nearly 5 percent below its level in August 2000. Manufacturing output declined 1.0 percent in August, mining output decreased 0.4 percent, and utilities production rose 1.6 percent. The rate of capacity utilization for total industry fell 0.7 percentage point, to 76.2 percent, a level almost 6 percentage points below its 1967-2000 average.

 INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION:  SUMMARY
 Seasonally adjusted
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                               |                    1992=100                     |                  Percent change
                               | ----------------------------------------------- | ------------------------------------------------
                               |       2001                                      |   2001                          |   Aug. '00 to 
 Industrial production         |        May        June        July        Aug.  |    May    June    July    Aug.  |     Aug. '01 
 ----------------------------------------------------------------------------------------------------------------------------------
                               |                                                 |                                 |
  Total index                  |      144.2       142.7       142.6       141.5  |    -.3    -1.0     -.1     -.8  |          -4.8 
     Previous estimates        |      144.2       143.0       142.8              |    -.3     -.9     -.1          |               
                               |                                                 |                                 |
 Major market groups:          |                                                 |                                 |
  Products, total              |      133.7       132.5       132.5       131.3  |    -.1     -.9      .0     -.9  |          -3.9 
     Consumer goods            |      122.2       121.6       122.1       121.2  |     .1     -.5      .4     -.8  |          -2.1 
     Business equipment        |      191.9       187.7       187.1       184.1  |    -.7    -2.2     -.3    -1.6  |          -6.9 
     Construction supplies     |      139.3       139.2       138.8       138.1  |    -.3     -.1     -.3     -.5  |          -3.2 
  Materials                    |      163.3       161.2       160.8       159.9  |    -.5    -1.3     -.3     -.5  |          -6.2 
                               |                                                 |                                 |
 Major industry groups:        |                                                 |                                 |
  Manufacturing                |      149.2       147.4       147.5       146.1  |    -.2    -1.2      .0    -1.0  |          -5.5 
     Durable                   |      190.1       187.4       187.6       185.5  |     .0    -1.4      .1    -1.2  |          -5.8 
     Nondurable                |      112.2       111.2       111.1       110.3  |    -.6     -.8     -.1     -.7  |          -5.2 
  Mining                       |      103.8       103.4       102.3       101.8  |     .3     -.4    -1.1     -.4  |            .8 
  Utilities                    |      119.5       119.6       118.8       120.7  |   -1.1      .1     -.7     1.6  |          -1.1 
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                               |                                                                                   |    Capacity
                               |                                Percent of capacity                                |     growth
                               | --------------------------------------------------------------------------------- | --------------
                               |     Average        1982     1988-89       2000  |   2001                          |   Aug. '00 to 
 Capacity utilization          |  1967-2000          Low        High       Aug.  |    May    June    July    Aug.  |     Aug. '01 
 ----------------------------------------------------------------------------------------------------------------------------------
                               |                                                 |                                 |
  Total industry               |       82.1        71.1        85.4        82.6  |   78.0    77.1    76.9    76.2  |           3.1 
     Previous estimates        |                                                 |   78.0    77.2    77.0          |               
                               |                                                 |                                 |
     Manufacturing             |       81.1        69.0        85.7        81.7  |   76.6    75.6    75.5    74.6  |           3.5 
        Advanced processing    |       80.6        71.0        84.2        80.2  |   77.2    76.1    76.1    75.1  |           2.0 
        Primary processing     |       82.2        65.7        88.3        85.4  |   76.7    75.6    75.4    74.7  |           6.0 
     Mining                    |       87.4        80.3        88.0        86.9  |   90.3    90.0    89.2    88.9  |          -1.4 
     Utilities                 |       87.6        75.9        92.6        91.5  |   87.2    87.0    86.1    87.2  |           3.8 
 ----------------------------------------------------------------------------------------------------------------------------------
 Note:  Estimates for August are preliminary.  Estimates from May to July are revised.
 
 
 

Market Groups

The output of consumer goods fell 0.8 percent in August after a 0.4 percent increase in July. The production of durable consumer goods dropped 1.5 percent as sizable decreases in the output of automotive products and miscellaneous consumer goods more than offset a bounceback in the production of appliances and home electronics such as audio-visual equipment; the output of home computers contracted again. The production of nondurable consumer goods fell 0.6 percent. The output for all of the major non-energy categories declined; the production of consumer energy products increased 0.3 percent and has changed little, on balance, over the past year. In August, the overall consumer energy increase was held down by a decline in gasoline production.

The production of business equipment, which fell 1.6 percent, was nearly 7 percent lower than it was in August 2000; decreases in transit equipment and in industrial and other equipment accounted for most of the past month's decline. The output of information processing equipment, which includes computers, also fell again; it has declined more than 4 percent since May and about 8 percent since the end of 2000. The production of defense and space equipment fell 0.9 percent, erasing a similarly sized gain in July, and the output of construction supplies fell 0.5 percent further. The production of business supplies decreased 0.4 percent, its eighth decline in the past nine months.

The output of industrial materials decreased 0.5 percent. Widespread declines in the production of durable and nondurable materials outweighed an increase in the output of energy materials. Overall, the production of industrial materials has fallen 6.2 percent since August 2000.

Industry Groups

Manufacturing output, which was unchanged in July, fell 1.0 percent in August and was 5-1/2 percent lower than in August 2000. The production of durable goods fell 1.2 percent, and cutbacks were widespread across the major sectors. Declines were particularly sharp in industrial machinery and in motor vehicles and parts. Electrical machinery fell 0.9 percent and has fallen about 12 percent so far in 2001; the production of communications equipment and semiconductors remained especially weak. The output of nondurables fell 0.7 percent, and production declined for nearly all major groups. The overall factory operating rate fell 0.9 percentage point, to 74.6 percent, with decreases both in advanced-processing and primary-processing industries.

At mines, production fell 0.4 percent, and the utilization rate decreased to 88.9 percent but remained above its long-run average. The output of utilities increased 1.6 percent, nearly reversing the cumulative decline over the preceding three months, and was about 1 percent below its year-ago level. The operating rate at utilities rose 1.1 percentage points, to 87.2 percent.

Revision of Industrial Production and Capacity Utilization

On November 27, the Federal Reserve Board will publish revisions to the index of industrial production (IP), to the related measures of capacity and capacity utilization, and to the index of industrial use of electric power. The updated measures will reflect the incorporation of newly available, more comprehensive source data typical of annual revisions. The new source data are for recent years, primarily 1999 and 2000, although data from 1992 onward will be subject to revision.

Industrial production and capacity utilization will continue to be based on the 1987 Standard Industrial Classification (SIC) until the 2002 annual revision, after which they will be constructed from the North American Industrial Classification System (NAICS). The new NAICS-related production indexes will be based on annual output measures that are constructed by reclassifying the establishments in historical Censuses of Manufactures and Mineral Industries under NAICS; annual output indexes constructed this way will maximize the reliability and historical consistency of the IP industry detail.

The updating of source data for IP in the 2001 annual revision will include annual data from the 1999 Bureau of the Census Annual Survey of Manufactures and from selected editions of its 1999 and 2000 Current Industrial Reports. Annual data from the U.S. Geological Survey regarding metallic and nonmetallic minerals (except fuels) for 1999 and 2000 will also be introduced. The updating will include revisions to the monthly indicator for each industry (either physical product data, production-worker hours, or electric power usage) and to seasonal factors.

Capacity and capacity utilization will be revised to incorporate preliminary data from the 2000 Survey of Plant Capacity of the Bureau of the Census, which covers manufacturing, along with other new data on capacity from the U.S. Geological Survey, the Department of Energy, and other organizations. The statistics on the industrial use of electric power will incorporate additional information received from utilities for the past few years and will include some data from the 1997 Census of Manufactures and the 1998 and 1999 Annual Survey of Manufactures.

Once the revision is published, it will be made available on the Board's web site (www.federalreserve.gov/releases/g17). The revised data will also be available through the web site of the Department of Commerce. Further information on these revisions is available from the Board's Industrial Output Section (telephone 202-452-3197).

G.17 Release Tables: