INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION
Industrial production was unchanged in February following a revised 0.1 percent rise in January. Manufacturing output was also flat in February. Motor vehicle production declined for a third consecutive month, although it remained at a relatively high level. With unseasonably warm weather continuing to dampen demand, the output of utilities bounced back only 0.9 percent after having dropped 3.1 percent in January. At 128.1 percent of its 1992 average, total industrial production in February was 4.9 percent higher than it was in February 1997. The rate of industrial capacity utilization decreased 0.3 percentage point, to 82.7 percent.
The 0.2 percent decline in the production of consumer goods in February reflected reductions in both the durable and nondurable components. Within durables, the drop in the output of automotive products was tempered a bit by a 0.2 percent increase in other consumer durables, which has been a volatile series of late. The production of nondurable consumer goods slipped 0.2 percent and has been little changed since November; losses in food and paper products outweighed gains in the output of consumer chemicals and in the residential use of utilities.
The output of business equipment, which had expanded nearly 11 percent last year, contracted 0.2 percent after having fallen 0.6 percent in January. Weakness in the production of industrial, telephone, and photographic equipment, along with slowdowns in motor vehicle and aircraft assembly, have constrained the production of business equipment so far this year.
The production of construction supplies increased further after a healthy gain in January. The output of materials edged up 0.1 percent for the second consecutive month, well off the pace set last year. Small increases in durable and nondurable goods materials slightly outweighed a further retraction in energy materials; a reduction in the output of coal outweighed increases in utility output. Among durable goods materials, the output of parts for high-technology equipment continued to increase rapidly; the output of parts for consumer goods, particularly for motor vehicles, declined.
The output at factories was flat in February. The output of durables ticked up just 0.1 percent; strong increases in computer and office equipment and in semiconductors were mostly offset by a decrease in motor vehicles and parts. The production of nondurables edged down 0.1 percent, with decreased production in many industries nearly matched by a sizable gain in chemicals production.
The operating rate in manufacturing declined to 81.8 percent. Utilization in advanced-processing industries and in primary-processing industries both decreased 0.4 percentage point. Capacity utilization in advanced-processing industries fell to a level a little below its long-run average, while the operating rate in primary-processing industries was 3.2 percentage points above its long-run average.
G.17 Release Tables: