Industrial Production and Capacity Utilization - G.17

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Release Date: January 17, 2020
Revision of Industrial Production and Capacity Utilization Notice Below

Industrial production declined 0.3 percent in December, as a decrease of 5.6 percent for utilities outweighed increases of 0.2 percent for manufacturing and 1.3 percent for mining. The drop for utilities resulted from a large decrease in demand for heating, as unseasonably warm weather in December followed unseasonably cold weather in November. For the fourth quarter as a whole, total industrial production moved down at an annual rate of 0.5 percent. At 109.4 percent of its 2012 average, total industrial production was 1.0 percent lower in December than it was a year earlier. Capacity utilization for the industrial sector fell 0.4 percentage point in December to 77.0 percent, a rate that is 2.8 percentage points below its long-run (1972–2018) average.

Industrial Production and Capacity Utilization: Summary
Seasonally adjusted
Industrial production 2012=100 Percent change
2019 2019 Dec. '18 to
Dec. '19
July[r] Aug.[r] Sept.[r] Oct.[r] Nov.[r] Dec.[p] July[r] Aug.[r] Sept.[r] Oct.[r] Nov.[r] Dec.[p]
       
Total index 109.1 110.0 109.4 108.9 109.8 109.4 -.2 .8 -.5 -.5 .8 -.3 -1.0
Previous estimates 109.1 109.9 109.5 108.5 109.7   -.2 .8 -.4 -.9 1.1    
       
Major market groups
Final Products 103.3 103.4 102.6 102.3 104.0 103.1 -.2 .1 -.8 -.3 1.6 -.8 -1.4
Consumer goods 105.6 105.5 104.8 104.6 106.4 105.1 .0 -.1 -.7 -.1 1.7 -1.2 -1.6
Business equipment 100.9 101.8 100.4 99.5 101.4 101.3 -.6 .9 -1.4 -.9 1.9 -.1 -1.9
Nonindustrial supplies 107.9 108.7 108.5 108.2 108.4 108.6 -.2 .7 -.2 -.2 .2 .1 -.5
Construction 116.0 117.2 116.8 116.3 116.4 118.3 -.8 1.0 -.3 -.4 .1 1.6 .7
Materials 114.2 115.8 115.5 114.5 114.9 114.9 -.2 1.4 -.3 -.8 .3 .0 -.8
       
Major industry groups
Manufacturing (see note below) 104.6 105.3 104.5 103.8 104.8 105.0 -.4 .7 -.8 -.7 1.0 .2 -1.3
Previous estimates 104.6 105.3 104.5 103.8 104.9   -.4 .7 -.7 -.7 1.1    
Mining 130.7 133.8 133.6 132.9 132.6 134.4 -2.2 2.4 -.2 -.5 -.2 1.3 1.4
Utilities 105.3 104.6 106.1 106.5 107.6 101.6 4.4 -.6 1.4 .4 1.0 -5.6 -1.9
Market Groups

The major market groups posted mixed results in December. Indexes that include utility output (consumer energy products, business supplies, and energy materials) all recorded declines. Likewise, a large drop in the output of motor vehicles and parts contributed to decreases registered by consumer durables, transit equipment, and durable goods materials. Most other indexes advanced, with gains of 1 percent or more posted by information processing equipment, defense and space equipment, construction supplies, and nondurable goods materials.

Industry Groups

Manufacturing output advanced 0.2 percent in December but decreased at an annual rate of 1.0 percent in the fourth quarter. The gain in December came despite a decrease of 4.6 percent for motor vehicles and parts; assemblies of light motor vehicles fell from 11.2 million units (annual rate) in November to 10.3 million units in December. Excluding the motor vehicle sector, factory output rose 0.5 percent. The index for durable goods manufacturing slipped 0.2 percent, as the decrease for motor vehicles outweighed widespread increases in other industries. The index for nonmetallic mineral products advanced 2.3 percent for the largest gain among durables. The production of nondurables moved up 0.6 percent, led by increases of more than 1 percent for petroleum and coal products and for food, beverage, and tobacco products. The output of other manufacturing (publishing and logging) decreased 0.2 percent. Mining output rose 1.3 percent, with most of the gain from oil and gas extraction; the index for mining rose at an annual rate of about 2 percent in the fourth quarter to reverse a similarly sized decrease in the third quarter.

Capacity utilization for manufacturing edged up 0.1 percentage point in December to 75.2 percent, about 3.1 percentage points below its long-run average. The utilization rate for mining increased to 89.6 percent, remaining above its long-run average of 87.1 percent. The operating rate for utilities fell to 73.5 percent, a rate that is about 12 percentage points below its long-run average.

Revision of Industrial Production and Capacity Utilization

The Federal Reserve Board plans to issue its annual revision to the indexes of industrial production (IP) and the related measures of capacity utilization in the summer of 2020. New annual benchmark data for manufacturing for 2017 and 2018 will be incorporated, as well as other annual data, including information on the mining of metallic and nonmetallic minerals (except fuels). The weights for market-group splits of the industry-level indexes will be updated with information from the 2012 benchmark input-output accounts from the Bureau of Economic Analysis. 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 for manufacturing through the fourth quarter of 2019 from the 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.

G.17 Release Tables:

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Last Update: January 17, 2020