INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION
[2004 Revision Notice Below]

Industrial production decreased 0.3 percent in June after having risen 0.9 percent in May; the gain in May was 0.2 percentage point less than originally reported. At 116.2 percent of its 1997 average, output was 5.6 percent higher than its level in June 2003. Manufacturing output decreased 0.1 percent in June but posted a jump of 7.1 percent (annual rate) for the second quarter. The output at utilities retreated 2.3 percent in June, as temperatures returned to more normal levels after being unseasonably high in May. Production at mines edged up 0.1 percent in June. Capacity utilization for total industry slipped to 77.2 percent; the rate was 3.2 percentage points above its value in June 2003 but was 3.9 percentage points below its 1972-2003 average.

r  Revised.  p  Preliminary.

       The statistics in this release cover output, capacity, and capacity utilization in the

industrial sector, which the Federal Reserve defines as manufacturing, mining, and electric and

gas utilities.  Manufacturing comprises those industries included in the North American Industry

Classification System, or NAICS, manufacturing plus the logging and newspaper, periodical,

book and directory publishing industries that have traditionally been considered manufacturing and included

in the industrial sector.

Market Groups

The production of consumer goods declined 0.7 percent in June; all categories of durables and nondurables posted decreases. The output of consumer automotive products dropped for a second month and led the June decline in durable consumer goods; the output of automotive products dropped at an annual rate of 10.4 percent in the second quarter after three quarters of increases. Small cutbacks in the production of appliances, furniture, and carpeting and of miscellaneous goods in June also contributed to the monthly decrease in consumer durables. The production of consumer nondurable goods fell 0.6 percent in June but posted an increase for the quarter. The index for foods and tobacco ebbed 0.2 percent after three months of solid gains. Clothing, chemical products, and paper products all posted declines; even so, all showed strong gains in the second quarter relative to the first.

The index for business equipment rose for a fourth consecutive month in June. The production of information processing equipment posted another strong monthly increase, 1.6 percent. The output of industrial and other equipment edged up 0.2 percent and rose at a double-digit annual rate, on average, for a second consecutive quarter. A 1.3 percent decline in the output of transit equipment in June was led by a drop in the production of medium and heavy trucks. The production of defense and space equipment edged up 0.3 percent.

The index for construction supplies was unchanged in June but rose at an annual rate of 9.7 percent in the second quarter, the strongest pace since 1996. The index for business supplies declined 0.5 percent in June after two months of gains.

The production of materials edged down 0.1 percent in June. A decline of 1.1 percent in the production of energy materials outweighed an increase of 0.3 percent for durable materials. Declines in the production of motor vehicle parts were largely offset by increases in semiconductor production and plastics product materials. The production of nondurable materials was unchanged.

Industry Groups

Manufacturing output edged down 0.1 percent in June; the overall factory operating rate declined 0.2 percentage point, to 76.0 percent. The production of durable manufacturing goods was unchanged in June. The production of computer and electronic products climbed 1.5 percent in June and 21.4 percent (annual rate) for the quarter as a whole. Output in the aerospace and miscellaneous transportation equipment industry, which posted a third consecutive monthly gain, rose 0.6 percent. The production of machinery rose 0.7 percent. Farm machinery and equipment as well as engines and power transmission equipment posted strong increases. Declines in the production of fabricated metal products, motor vehicles and parts, wood products, and miscellaneous products offset these gains.

Within the computer and electronic products group, output in high-technology industries continued to increase rapidly. The production of communications equipment rose 1.9 percent, a second consecutive monthly gain, and it increased at a modest pace for a third consecutive quarter. Gains in storage devices and other peripherals contributed to the increase in output in the computer products industry, which posted a fourth consecutive quarter of rapid growth. Continuing its string of recent increases, the output of semiconductors and related electronic components grew 2.3 percent.

The index for nondurable goods was unchanged in June and rose at an annual rate of 6.7 percent in the second quarter. Among the industries showing output gains were petroleum and coal products, chemicals, and plastics and rubber products. The production indexes for food, beverage, and tobacco products and for paper products declined slightly at the end of a strong second quarter. Production in the textile and product mills industry fell 1.0 percent, retreating after a strong increase in May. Declines in the logging industry and in the newspaper, periodicals, books and directory publishing industry accounted for a decrease of 0.8 percent in the other manufacturing category in June.

The output at mines edged 0.1 percent higher in June. The utilization rate for mining was unchanged at 84.8 percent. The output at utilities dropped 2.3 percent; electricity generation fell 3.1 percent. The operating rate at utilities was 85.2 percent.

Capacity utilization by stage of process was unchanged, at 84.4 percent, for industries in the crude stage. For industries in the primary and semifinished stages, it declined 0.5 percentage point, to 79.6 percent, and for industries in the finished stage, it edged down 0.3 percentage point, to 73.3 percent.

Revision of Industrial Production and Capacity Utilization

In fall 2004, the Federal Reserve Board plans to issue an annual revision to the index of industrial production (IP), the related measures of capacity and capacity utilization, and the data on industrial use of electric power; the date of the revision is subject to the availability of the comprehensive source data from the Census Bureau's 2002 Economic Census. In addition to the inclusion of these data, the revised IP indexes will incorporate data from selected editions of the Census Bureau's 2002 and 2003 Current Industrial Reports. Annual data from the U.S. Geological Survey regarding metallic and nonmetallic minerals (except fuels) for 2002 and 2003 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 revisions to seasonal factors.

Capacity and capacity utilization will be revised to incorporate preliminary data from the Census Bureau's 2003 Survey of Plant Capacity, which covers manufacturing, along with 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 available data from the 2002 Economic Census.

Once the revision is published, it will be made available on the Board's web site at 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:

Ascii	Screen reader	Summary: Industrial Production and Capacity Utilization
Chart		Chart 1: Industrial Production, Capacity, and Capacity Utilization
Chart		Chart 2: Industrial Production and Capacity Utilization
Chart		Chart 3: Industrial Production and Capacity Utilization, High Technology Industries
Ascii	Screen reader	Table 1:Industrial Production: Market and Industry Groups (percent change)
Ascii	Screen reader	Table 2:Industrial Production: Special Aggregates and Selected Detail (percent change)
Ascii	Screen reader	Table 3: Motor Vehicle Assemblies
Ascii	Screen reader	Table 4: Industrial Production Indexes: Market and Industry Group Summary
Ascii	Screen reader	Table 5: Industrial Production Indexes: Special Aggregates
Ascii	Screen reader	Table 6: Diffusion Indexes of Industrial Production
Ascii	Screen reader	Table 7: Capacity Utilization: Manufacturing, Mining, and Utilities
Ascii	Screen reader	Table 8: Industrial Capacity: Manufacturing, Mining, and Utilities (percent change)
Ascii	Screen reader	Table 9: Industrial Production: Gross Value of Products and Nonindustrial Supplies
Ascii	Screen reader	Table 10: Gross-Value-Weighted Industrial Production: Stage-of-Process Groups
Ascii	Screen reader	Table 11: Electric Power Use: Manufacturing and Mining
Ascii	Screen reader	Table 12: Historical Statistics for IP, Capacity, and Utilization: Total Industry
Ascii	Screen reader	Table 13: Historical Statistics for IP, Capacity, and Utilization: Manufacturing
Ascii	Screen reader	Table 14: Historical Statistics for IP, Capacity, and Utilization: Total Industry excluding Selected High-Technology Industries
Ascii	Screen reader	Table 15: Historical Statistics for IP, Capacity, and Utilization: Manufacturing excluding Selected High-Technology Industries

Release dates | Historical data | Documentation
Current Monthly Release   Other formats: ASCII | PDF (144 KB)
Supplemental Monthly Release   Other formats: ASCII | PDF (144 KB)
Annual Revision Release   Other formats: ASCII | PDF (150 KB)

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