Industrial Production and Capacity Utilization - G.17

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Industrial production was unchanged in April after having increased 0.7 percent in March. Output in February is now estimated to have declined 0.3 percent; previously it was reported to have edged up 0.1 percent. In April, manufacturing production fell 0.4 percent after rising for nine consecutive months. Total motor vehicle assemblies dropped from an annual rate of 9.0 million units in March to 7.9 million units in April, mainly because of parts shortages that resulted from the earthquake in Japan. Excluding motor vehicles and parts, factory production rose 0.2 percent in April. The output of mines advanced 0.8 percent, while the output of utilities increased 1.7 percent. At 93.1 percent of its 2007 average, total industrial production was 5.0 percent above its year-earlier level. The rate of capacity utilization for total industry edged down 0.1 percentage point to 76.9 percent, a rate 3.5 percentage points below its average from 1972 to 2010.

Industrial Production and Capacity Utilization: Summary

Market Groups

The production of consumer goods decreased 0.7 percent in April because of weakness in the output of consumer durable goods. The index for consumer durable goods fell 4.4 percent, while the index for consumer nondurables rose 0.3 percent. Within the durables category, the output of automotive products dropped 7.0 percent, and the output of appliances, furniture, and carpeting fell 4.2 percent. The index for miscellaneous consumer durables recorded a decrease of 0.2 percent, while the index for home electronics increased 0.7 percent. The output of non-energy nondurable goods rose 0.6 percent, with gains in all of its main components. The output of consumer energy products declined 0.5 percent.

The index for business equipment fell 0.4 percent in April following a loss of 0.5 percent in March. Within business equipment in April, the output of transit equipment decreased 3.6 percent as a result of the large drop in motor vehicle assemblies; the production of most other types of transit equipment, particularly civilian aircraft, advanced substantially. The index for industrial and other equipment gained 0.7 percent, while the index for information processing equipment was unchanged. Despite a second consecutive monthly decrease in business equipment, the index in April was 9.9 percent above its level 12 months earlier.

The production index for defense and space equipment was unchanged in April after decreasing 0.3 percent in the previous month. Output in April was 1.4 percent above its year-earlier level.

Among nonindustrial supplies, the output of construction supplies declined 0.1 percent in April. This index has risen 3.0 percent since April 2010 but remains well below its pre-recession peak. The production of business supplies increased 0.7 percent in April following a similarly sized gain in March. Within business supplies in April, the index for commercial energy advanced 0.6 percent, and the index for non-energy business supplies moved up 0.7 percent---its sixth consecutive monthly increase.

The output of materials to be processed further in the industrial sector rose 0.3 percent in April after increasing 0.9 percent in March. The output of durable materials declined 0.4 percent in April; a drop of 5.4 percent in consumer parts---primarily motor vehicle parts---more than offset an increase of 0.9 percent in equipment parts. The output of nondurable materials edged up 0.2 percent after increasing 0.5 percent in March. In April, among nondurable materials, a sizable increase in textile production and a small gain in chemical production more than offset a decrease in the output of paper. The index for energy materials moved up 1.1 percent, with similarly sized increases in primary energy and converted fuel.

Industry Groups

In April, manufacturing output fell 0.4 percent after increasing 0.6 percent in March. The rates of change for manufacturing were also revised down for both January and February; lower estimates for the production of cigarettes, petroleum products, pharmaceuticals, microprocessors, and military aircraft contributed to the downward revisions. The index for manufacturing in April was 4.6 percent above its year-earlier level. Capacity utilization for manufacturing moved down 0.4 percentage point to 74.4 percent, a rate 10.0 percentage points above its trough in June 2009 but still 4.6 percentage points below its average from 1972 to 2010.

The production index for durable goods dropped 1.0 percent in April. The output of motor vehicles and parts fell 8.9 percent after increasing 3.6 percent in March. In addition, in April, significant losses in output were recorded in the following industries: primary metals; electrical equipment, appliances, and components; and furniture and related products. Durable goods industries with gains in output included nonmetallic mineral products, fabricated metal products, machinery, computer and electronic products, and aerospace and miscellaneous transportation equipment.

The production of nondurables edged up 0.1 percent in April after advancing 0.5 percent in March. In April, decreases for paper products and for petroleum and coal products were more than offset by gains for all other categories, with increases of nearly 1 percent or more for textile and product mills, apparel and leather, and printing and support. Production in the non-NAICS manufacturing industries (logging and publishing) rose 0.8 percent after declining for four consecutive months.

In April, mining output rose 0.8 percent. Gains in oil and gas extraction, in support activity for mining, and in coal mining more than offset decreases in metal ore mining and in nonmetallic mineral mining and quarrying. Capacity utilization for mining moved up 0.6 percentage point to 88.2 percent, a rate 0.8 percentage point above its average for the period from 1972 to 2010. The output of utilities increased 1.7 percent, and its capacity utilization rate rose to 81.6 percent, a rate 5.0 percentage points below its average from 1972 to 2010.

Capacity utilization rates in April for industries grouped by stage of process were as follows: At the crude stage, utilization increased 0.4 percentage point to 87.0 percent, a rate 0.6 percentage point above its long-run (1972 to 2010) average; at the primary and semifinished stages, utilization moved up 0.1 percentage point to 74.5 percent, a rate 6.8 percentage points below its long-run average. At the finished stage, utilization fell 0.5 percentage point to 75.6 percent, a rate 1.7 percentage points below its long-run average.

Revision of Industrial Production and Capacity Utilization

The Federal Reserve Board released its annual revision to the index of industrial production and the related measures of capacity and utilization on March 25, 2011. This revision incorporated detailed data from the 2009 Annual Survey of Manufactures, which was conducted by the U.S. Census Bureau. In addition, data from selected editions of the Census Bureau's 2009 Current Industrial Reports and annual data from the U.S. Geological Survey regarding metallic and nonmetallic minerals (except fuels) for 2009 were incorporated. Monthly indicators (either product data or input data) were revised, and the estimation methods for some series were changed. The new monthly production estimates reflected the incorporation of updated seasonal factors and monthly and quarterly source data that became available (or were revised) after the closing of the reporting window. Data on capacity utilization from the Census Bureau's Quarterly Survey of Plant Capacity for 2010 were incorporated in the revision.

The published revision release is available on the Board's website at www.federalreserve.gov/releases/G17. The revised data are also 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).

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