Industrial Production and Capacity Utilization - G.17
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Industrial production increased 0.4 percent in June after having declined 0.2 percent in May. In the manufacturing sector, output advanced 0.7 percent in June and reversed a decrease of 0.7 percent in May. In the second quarter of 2012, manufacturing output rose at an annual rate of 1.4 percent, a marked deceleration from its strong gain of 9.8 percent in the first quarter. The largest contribution to the increase in the second quarter came from motor vehicles and parts, which climbed 18.2 percent; excluding motor vehicles and parts, manufacturing output edged up 0.1 percent. Outside of manufacturing, the output of mines advanced 0.7 percent in June, while the output of utilities decreased 1.9 percent. For the quarter, however, the output of mines fell at an annual rate of 1.2 percent, while the output of utilities rose 14.9 percent. At 97.4 percent of its 2007 average, total industrial production in June was 4.7 percent above its year-earlier level. Capacity utilization for total industry moved up 0.2 percentage point in June to 78.9 percent, a rate 1.4 percentage points below its long-run (1972--2011) average.
Industrial Production and Capacity Utilization: Summary
|Industrial production||2007=100||Percent change|
|2012||2012|| June '11 to
|Major market groups|
|Major industry groups|
|Manufacturing (see note below)||93.8||94.6||94.0||94.7||94.0||94.7||1.0||.8||-.6||.7||-.7||.7||5.6|
|Capacity utilization||Percent of capacity|| Capacity
|2012|| June '11 to
|Manufacturing (see note below)||78.8||85.6||77.3||84.6||63.8||74.4||77.5||78.0||77.4||77.9||77.3||77.7||1.1|
|Primary and semifinished||81.1||86.5||78.0||87.9||64.2||73.9||75.1||76.0||75.4||76.0||76.1||76.1||.3|
The production of consumer goods edged up 0.1 percent in June after having moved down a similar amount in May. For the second quarter as a whole, output rose at an annual rate of 1.3 percent: Increases in consumer energy products and consumer durables were partly offset by a decline in non-energy nondurables. Following a decrease of 1.4 percent in May, the output of consumer durables rose 0.9 percent in June; the index for automotive products increased 1.5 percent, the index for home electronics decreased 1.3 percent, and the indexes for other categories were little changed. The output of consumer nondurables edged down 0.1 percent, with slight declines in both the energy and non-energy categories. Among non-energy nondurables, a large decrease for clothing and a small decrease for foods and tobacco were mostly offset by a large increase in paper products and a smaller increase in chemical products. Within consumer energy products, the output of fuels gained, whereas the sales of utilities to residences fell. Over the past 12 months, the index for consumer goods has risen 2.1 percent; the production of durable consumer goods has advanced 12.8 percent, while the output of nondurable consumer goods has moved down 1.0 percent.
After having edged up 0.1 percent in May, the production of business equipment rose 1.6 percent in June, with similarly sized gains in each of its major components: transit equipment, information processing equipment, and industrial and other equipment. In the second quarter, the overall index for business equipment advanced at an annual rate of 11.6 percent, somewhat slower than its gain of 17.0 percent in the first quarter but faster than its increase of 8.0 percent over 2011.
The output of defense and space equipment moved down 0.6 percent in June. A strike at a major producer of military aircraft contributed to a decline of 5.5 percent at an annual rate in the second quarter. The index had increased in each of the five previous quarters. In June, production for this market group was 2.7 percent above its year-earlier level.
Among nonindustrial supplies, the output of construction supplies dipped 0.3 percent in June after having fallen 1.4 percent in May. Following an increase of 14.7 percent at an annual rate in the first quarter, construction supplies registered a loss of 1.1 percent in the second quarter. The production of business supplies moved up 0.4 percent in June, marking its third consecutive monthly gain. The index for business supplies rose at an annual rate of 4.0 percent in the second quarter.
The output of materials to be processed further in the industrial sector rose 0.5 percent in June after having decreased 0.2 percent in May. The index increased at an annual rate of 1.4 percent in the second quarter, well below the gain of 6.1 percent posted in the first quarter. Both durable and nondurable materials contributed to the slower pace of gains in the second quarter; energy materials offset some of that deceleration by increasing in the second quarter after having fallen in the first quarter. In June, the output of durable materials rose 0.7 percent and more than reversed its decrease in May; much of the increase in June came from consumer parts, which advanced 2.1 percent, although the indexes for equipment parts and other durable goods materials recorded gains as well. The production of nondurable materials moved up 0.8 percent, as a gain of 1.9 percent in textile materials was accompanied by increases of 0.4 percent and 0.9 percent in paper materials and chemical materials, respectively. The index for energy materials edged up 0.1 percent.
Manufacturing output advanced 0.7 percent in June and increased at an annual rate of 1.4 percent in the second quarter. The index for manufacturing in June was 5.6 percent above its year-earlier level. In June, capacity utilization for manufacturing moved up 0.4 percentage point to 77.7 percent, a rate 13.9 percentage points above its trough in June 2009 but still 1.1 percentage points below its long-run average.
Within manufacturing, the production index for durable goods rose 0.8 percent in June after having declined 0.6 percent in May. In June, most durable goods industries exhibited gains, with the largest increases registered by machinery, which advanced 2.3 percent, and motor vehicles and parts, which rose 1.9 percent. For the second quarter as a whole, durable goods manufacturing moved up at an annual rate of 6.2 percent, a pace only slightly slower than its increase of 7.2 percent during 2011 but substantially slower than its gain of 16.3 percent in the first quarter of this year.
The production of nondurables advanced 0.5 percent in June after having fallen 0.7 percent in May. Among the major components of nondurables, sizable increases were recorded in June by the indexes for textile and product mills, printing and support, petroleum and coal products, chemicals, and plastics and rubber products. Output in this sector decreased at an annual rate of 3.4 percent in the second quarter, with declines in most industry groups; only the indexes for printing and support and for plastics and rubber products posted increases.
Production in the non-NAICS manufacturing industries (logging and publishing) rose 1.6 percent in June, which reversed its 1.6 percent drop in the preceding month.
In June, the output of mines advanced 0.7 percent after having registered no change in May. Capacity utilization for mining moved up 0.4 percentage point in June to 89.4 percent, a rate 2.1 percentage points above its long-run average. The output of utilities fell 1.9 percent after two months of gains, and its operating rate fell 1.6 percentage points to 74.2 percent, a rate 12.1 percentage points below its long-run average.
Capacity utilization rates in June for industries grouped by stage of process were as follows: At the crude stage, utilization gained 0.7 percentage point to 87.4 percent, a rate 1.1 percentage points above its long-run average; at the primary and semifinished stages, utilization remained unchanged at 76.1 percent, a rate 5.0 percentage points below its long-run average; and at the finished stage, utilization rose 0.3 percentage point to 78.3 percent, a rate 1.1 percentage points higher than its long-run average.
The estimates for industrial capacity in 2012 were revised for this release. The revisions reflect updated measures of physical capacity from various government and trade sources as well as updated estimates of industry capital spending. Capacity for total industry, measured from the fourth quarter of 2011 to the fourth quarter of 2012, is now expected to increase 1.5 percent, a rate that is 0.5 percentage point faster than previously estimated. Manufacturing capacity is expected to rise 1.4 percent in 2012, a pace 0.4 percentage point more than in previous estimates, with slower gains in high-tech industries more than offset by faster gains elsewhere in manufacturing. The increase in mining capacity for 2012 has been revised upward to 2.2 percent, while the change in capacity at utilities is the same as previously estimated.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.