INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION

[Annual Revision Notice Below]

Industrial production fell 1.8 percent in January. At 101.3 percent of its 2002 average, output in January was 10.0 percent below its year-earlier level. Production in the manufacturing sector dropped 2.5 percent with broad-based declines among its components. A plunge in motor vehicle and parts production that resulted from extended plant shutdowns subtracted more than 1.0 percentage point from the change in manufacturing production. The output of mines moved down 1.3 percent. A swing to below-average temperatures contributed to an increase of 2.7 percent in the output of utilities. The capacity utilization rate for total industry fell to 72.0 percent, a rate 8.9 percentage points below its average from 1972 to 2008.

INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION: SUMMARY
Seasonally adjusted

Industrial production	2002=100						Percent change
	2008					2009 Jan.[p]	2008					2009 Jan.[p]	Jan. '08 to Jan. '09
	Aug.[r]	Sept.[r]	Oct.[r]	Nov.[r]	Dec.[r]		Aug.[r]	Sept.[r]	Oct.[r]	Nov.[r]	Dec.[r]
Total index	109.8	105.3	107.0	105.7	103.2	101.3	-1.3	-4.1	1.6	-1.2	-2.4	-1.8	-10.0
Previous estimates	109.8	105.2	107.1	105.7	103.6		-1.3	-4.2	1.8	-1.3	-2.0
Major market groups
Final Products	110.5	107.5	108.3	108.0	106.8	104.4	-1.6	-2.7	.8	-.3	-1.1	-2.2	-8.4
Consumer goods	103.8	102.4	104.3	103.4	101.3	99.5	-2.1	-1.4	1.9	-.9	-2.0	-1.8	-7.9
Business equipment	129.3	119.7	116.3	118.7	121.6	117.1	-.4	-7.4	-2.9	2.1	2.4	-3.7	-10.9
Nonindustrial supplies	104.9	102.2	102.3	100.1	97.1	96.1	-1.0	-2.5	.0	-2.1	-3.1	-1.0	-10.7
Construction	100.9	98.5	97.0	93.1	89.3	86.3	-1.1	-2.4	-1.5	-4.0	-4.1	-3.4	-16.7
Materials	110.8	104.3	107.4	105.6	102.1	100.4	-1.2	-5.9	3.0	-1.7	-3.3	-1.7	-11.2
Major industry groups
Manufacturing (see note below)	110.7	106.5	107.2	104.8	101.8	99.2	-1.1	-3.8	.6	-2.2	-2.9	-2.5	-12.9
Previous estimates	110.8	106.4	107.4	105.0	102.5		-1.0	-3.9	.9	-2.2	-2.3
Mining	105.2	94.9	102.4	104.9	103.8	102.5	-.5	-9.8	7.9	2.5	-1.0	-1.3	-.8
Utilities	103.9	105.5	107.4	109.5	109.3	112.3	-4.6	1.6	1.8	2.0	-.2	2.7	1.3

Market Groups

The production of consumer goods contracted 1.8 percent in January, and the rate of change for the fourth quarter was revised down 1.4 percentage points to show a drop of 4.2 percent (annual rate). In January, consumer durable goods fell 10.5 percent, consumer non-energy nondurable goods declined 0.4 percent, and consumer energy products increased 1.2 percent. Among consumer durables, the output of automotive products decreased 20.6 percent, as motor vehicle assemblies fell about 40 percent to an annual rate of 3.9 million units. The production of home electronics moved down 1.3 percent, and the indexes both for appliances, furniture, and carpeting and for miscellaneous goods dropped 2.3 percent. Among non-energy nondurable goods, the output of foods and tobacco rose 0.4 percent; however, the index for clothing retreated 3.3 percent, the index for consumer chemical products decreased 1.1 percent, and the index for paper products moved down 1.6 percent. An increase in residential sales of electricity and natural gas accounted for the gain in the index for consumer energy goods, while the production of fuels moved lower.

The output of business equipment dropped 3.7 percent. The production of industrial and other equipment contracted 3.0 percent, and the production of transit equipment fell 11.7 percent. The index for information processing equipment was little changed after having posted steep declines in the second half of 2008. In January, higher output of some types of communications equipment offset declines elsewhere.

The output of defense and space equipment increased 1.4 percent in January but is down about 2 percent over the past year.

Among nonindustrial supplies, the production of construction supplies decreased 3.4 percent in January. The production of business supplies edged down 0.1 percent; however, excluding energy sales to businesses, this index dropped 1.7 percent.

Materials output declined 1.7 percent in January. The production of energy materials was unchanged, but the output of non-energy materials moved down 2.8 percent. Among non-energy materials, the index for durable materials fell 4.6 percent. Lower production of motor vehicle parts was largely responsible for the 14.9 percent drop in the index for consumer parts. Reduced production of semiconductors helped to pull the index for equipment parts down 3.1 percent. The index for other durable materials fell 2.7 percent. The output of nondurable materials declined 0.3 percent, as the production of textile materials, paper materials, and chemical materials all moved lower.

Industry Groups

In January, manufacturing output fell 2.5 percent and was 12.9 percent below its year-earlier level. The factory operating rate moved down 1.7 percentage points, to 68.0 percent, the lowest rate of utilization since this series began in 1948. The index for durable goods dropped 4.8 percent. The output of motor vehicles and parts decreased at a monthly rate of 23.4 percent in January, after having contracted at an annual rate of more than 37 percent in the fourth quarter. All of the remaining major indexes fell sharply in January with the exception of miscellaneous manufacturing, which moved up 0.3 percent. The production of nondurable goods decreased 0.5 percent. The output of food, beverage, and tobacco products rose 0.6 percent after having fallen more than 2 percent in December, but declines were recorded in all the other major nondurable goods industries.

The index for the other manufacturing category, which consists of publishing and logging, decreased 1.5 percent.

The output of electric and gas utilities rose 2.7 percent, and the operating rate moved up 2.2 percentage points, to 86.7 percent. Mining output fell 1.3 percent, and the utilization rate dropped to 88.9 percent, a rate below its year-earlier level but 1.3 percentage points above its 1972-2008 average.

Capacity utilization rates in January at industries grouped by stage of process were as follows: At the crude stage, utilization decreased 0.8 percentage point, to 83.9 percent, a rate 2.8 percentage points below its 1972-2008 average; at the primary and semifinished stages, utilization moved down 1.2 percentage points, to 70.4 percent, a rate 11.7 percentage points below its long-run average; and at the finished stage, utilization declined 1.6 percentage points, to 69.3 percent, a rate 8.3 percentage points below its long-run average.

Note: Preliminary Estimates of Industrial Capacity

The data in this release include preliminary estimates of industrial capacity for 2009. Measured fourth quarter to fourth quarter, total industrial capacity is projected to decrease 0.3 percent this year after having expanded 1.5 percent in 2008. Manufacturing capacity is estimated to decline 0.6 percent in 2009 after having risen 1.7 percent last year. In 2009, mining capacity is estimated to expand 0.8 percent, about the same as in 2008, and utilities capacity is projected to rise 1.7 percent, which is 0.5 percentage point slower than it had last year. With the publication on March 27, 2009, of the annual revision to industrial production, capacity, and capacity utilization, these estimates will be updated to reflect more-comprehensive source data, including the U.S. Census Bureau's Survey of Plant Capacity for the fourth quarter of 2008, which covers manufacturing.

Revision of Industrial Production and Capacity Utilization

The Federal Reserve Board plans to issue its annual revision to the index of industrial production (IP) and the related measures of capacity utilization on March 27, 2009. The revised IP indexes will incorporate data from selected editions of the U.S. Census Bureau's 2007 Current Industrial Reports. Detailed data from the 2007 Economic Census, however, are not expected to be available. Annual data from the U.S. Geological Survey regarding metallic and nonmetallic minerals (except fuels) for 2007 will also be incorporated. The update will include revisions to the monthly indicator (either product data or input data) and to seasonal factors for each industry as well as changes in the estimation methods for some series. Any changes to the methods for estimating the output of an industry will affect the index from 1972 to the present.

Once the revision is published, it will be available on the Board's website at www.federalreserve.gov/releases/G17. The revised data will also be available through the website of the Department of Commerce. Further information on the revision can be obtained from the Board's Industrial Output Section (telephone number 202-452-3197).

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.

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: Historical Statistics for IP, Capacity, and Utilization: Total Industry
Ascii	Screen reader	Table 12: Historical Statistics for IP, Capacity, and Utilization: Manufacturing
Ascii	Screen reader	Table 13: Historical Statistics for IP, Capacity, and Utilization: Total Industry excluding Selected High-Technology Industries
Ascii	Screen reader	Table 14: Historical Statistics for IP, Capacity, and Utilization: Manufacturing excluding Selected High-Technology Industries