Industrial Production and Capacity Utilization

Release Date: December 17, 2002
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INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION
[2002 Revision Notice Below]

Industrial production rose 0.1 percent in November after a revised drop of 0.6 percent in October. At 110.8 percent of its 1997 average, output was 1.8 percent above its level in November 2001. Manufacturing output edged up 0.1 percent in November; the increase was led by a sharp rebound in the production of motor vehicles and parts. Excluding motor vehicles and parts, manufacturing output declined 0.3 percent in both November and October. Capacity utilization for total industry edged up to 75.6 percent, a level 0.5 percentage point above that of November 2001 and 5.9 percentage points below its 1972-2001 average.

INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION: SUMMARY Seasonally adjusted -------------------------------------------------------------------------------------------------------------------------------------- | 1997=100 | Percent change | ----------------------------------------------- | ------------------------------------------------- | 2002 | 2002 | Nov. '01 to Industrial production | Aug. Sept. Oct. Nov. | Aug. Sept. Oct. Nov. | Nov. '02 -------------------------------------------------------------------------------------------------------------------------------------- | | | Total index | 111.3 111.3 110.7 110.8 | -.2 .0 -.6 .1 | 1.8 Previous estimates | 111.3 111.3 110.4 | -.2 .0 -.8 | | | | Major market groups | | | Final Products | 107.6 107.6 106.9 107.4 | -.3 .0 -.6 .4 | .9 Consumer goods | 107.8 108.1 107.3 108.2 | -.7 .3 -.7 .8 | 2.6 Business equipment | 108.1 106.8 106.1 105.6 | .7 -1.1 -.7 -.4 | -3.7 Nonindustrial supplies | 115.4 115.8 115.3 114.7 | -.2 .4 -.5 -.5 | 1.6 Construction | 104.8 104.8 104.5 103.5 | .4 -.1 -.3 -.9 | .6 Materials | 113.6 113.4 112.7 112.8 | -.2 -.2 -.6 .1 | 2.8 | | | Major industry groups | | | Manufacturing (see note below) | 112.4 112.2 111.7 111.7 | .1 -.2 -.5 .1 | 1.4 Previous estimates | 112.3 112.1 111.3 | .0 -.2 -.7 | Mining | 93.9 92.1 92.0 93.2 | -.5 -1.9 -.2 1.3 | -2.8 Utilities | 110.4 113.3 111.3 111.3 | -2.9 2.7 -1.8 .0 | 8.4 -------------------------------------------------------------------------------------------------------------------------------------- | | Capacity | Percent of capacity | growth | --------------------------------------------------------------------------------- | --------------- | Average 1982 1988-89 2001 | 2002 | Nov. '01 to Capacity utilization | 1972-2001 Low High Nov. | Aug. Sept. Oct. Nov. | Nov. '02 -------------------------------------------------------------------------------------------------------------------------------------- | | | Total industry | 81.5 70.8 85.1 75.1 | 76.1 76.1 75.5 75.6 | 1.1 Previous estimates | 75.1 | 76.1 76.1 75.4 | | | | Manufacturing (see note below) | 80.4 68.6 85.5 73.4 | 74.3 74.2 73.8 73.8 | .9 Previous estimates | | | Mining | 87.0 78.6 85.6 86.8 | 85.3 83.7 83.5 84.6 | -.2 Utilities | 86.7 77.2 92.6 84.3 | 86.5 88.4 86.3 85.9 | 6.5 | | | Stage-of-process groups | | | Crude | 86.5 77.2 88.6 83.2 | 83.9 83.0 82.5 83.0 | -.6 Primary and semifinished | 82.4 67.9 86.2 76.2 | 78.4 78.6 78.0 77.8 | 1.6 Finished | 78.7 71.3 83.1 72.0 | 71.7 71.5 71.0 71.2 | .9 -------------------------------------------------------------------------------------------------------------------------------------- Note. Estimates for November are preliminary. Estimates from August to October are revised.

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 consists of those industries included in the North American Industry Classification System, or NAICS, manufacturing plus those industries-logging and newspaper, periodical, book and directory publishing-that have traditionally been considered manufacturing and included in the industrial sector.

Market Groups

The output of consumer goods rose 0.8 percent in November. A 2.8 percent rise in the production of durables was led by a 4.6 percent increase in automotive products. The index for appliances, furniture, and carpeting moved up 0.8 percent. A 1.3 percent rise in the output of energy products pulled up the nondurable consumer goods category, which edged up 0.1 percent. The production of nondurable non-energy products slipped 0.1 percent; declines in the output indexes for foods and tobacco and for paper products more than offset increases in the output of chemical products and clothing.

The production of business equipment declined 0.4 percent. An increase in the production of information processing equipment was more than offset by further decreases in industrial and other equipment and in transit equipment. Declines in the production of heavy trucks, medium trucks, and commercial aircraft contributed to a 1.2 percent reduction in the output of transit equipment; the index was 15.7 percent lower than its level in November 2001.

The output of defense and space equipment edged up further and was more than 3 percent higher than its year-ago level. After having changed little, on balance, over the previous few months, the output of construction supplies dropped 0.9 percent. The production of business supplies dipped 0.2 percent.

The production of industrial materials rose 0.1 percent. Both the durable and nondurable groups had slight declines, but energy materials increased 0.8 percent. A bounceback in the extraction of oil and natural gas, which had been curtailed in September and October by storms in the Gulf Coast region, more than accounted for the November gain.

Industry Groups

Manufacturing output edged up 0.1 percent in November. The overall factory operating rate held even at 73.8 percent, a level 0.4 percentage point above its year-ago level and 6.6 percentage points below its 1972-2001 average. Bolstered by a 3.9 percent increase in the production of motor vehicles and parts, the output of durable goods rose 0.3 percent. In the motor vehicles category, the indexes for both autos and light trucks registered large increases, while the index for medium and heavy trucks registered a sizable decline. Among other durable goods categories, the indexes for computer and electronic products and for electrical equipment, appliances, and components registered gains, while the indexes for all other major categories fell. The largest declines were for fabricated metal products, wood products, primary metals, and aerospace and other miscellaneous transportation equipment. Among nondurables, a 3.3 percent increase in the output of petroleum and coal products reversed the large declines in the two preceding months. Increases in the output of distillate fuel oil and automotive gasoline were largely responsible for the rise. The index for plastics and rubber products fell 1.2 percent, its fourth consecutive monthly decline. The production of other manufacturing industries (publishing and logging) decreased 0.7 percent.

Production at mines climbed 1.3 percent in November; the utilization rate rose 1.1 percentage points, to 84.6 percent, a level 2.4 percentage points below its 1972-2001 average. The output of utilities was unchanged. The operating rate at utilities fell 0.4 percentage point; at 85.9 percent, the rate is 1.6 percentage points above its year-ago level and 0.8 percentage point below its 1972-2001 average. Looking across stage-of-process groups, utilization rose 0.5 percentage point for industries in the crude category, fell 0.2 percentage point for operators at the primary and semifinished level of processing, and edged up 0.2 percentage point for processors of finished goods.

Revision of Industrial Production and Capacity Utilization

On December 5, the Federal Reserve Board published a 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 revised estimates are classified according to the 2002 North American Industry Classification System (NAICS); previously, the estimates from 1987 forward were classified according to the 1987 Standard Industrial Classification (SIC) system. NAICS changes the SIC system's industry composition of manufacturing. To preserve the continuity of the production, capacity, and utilization rate measures featured in the Federal Reserve's G.17 statistical release, portions of SIC 27 (printing and publishing) and SIC 24 (lumber and products) that are not classified in manufacturing under NAICS continue to be included in the overall IP index and capacity utilization.

The revised production indexes are based on annual output measures that were constructed by reclassifying the establishments in historical Censuses of Manufactures and Mineral Industries under NAICS; annual output indexes constructed this way maximize the reliability and historical consistency of the IP industry detail. Data going back to 1972 were restated using NAICS. The monthly indicators used in current IP indexes were incorporated into the revised IP indexes as far back as the data allow.

The revised indexes are now expressed as percentages of output in 1997, beginning at the start date of each index: 1919 for total and manufacturing IP, 1948 for manufacturing capacity, and 1967 for total industrial capacity. The Federal Reserve's accompanying indexes of industrial electric power use, which began in 1972, also were restated to accord with NAICS, rebased to use 1997 as a comparison year, and revised to incorporate previously unavailable data.

The updated measures reflect the incorporation of newly available, more comprehensive source data typical of annual revisions. The updating of source data for IP in the 2002 annual revision included annual data from the 2000 Annual Survey of Manufactures of the Bureau of the Census and from selected editions of its 2000 and 2001 Current Industrial Reports. Annual data from the U.S. Geological Survey regarding metallic and nonmetallic minerals (except fuels) for 2000 and 2001 were also introduced. The updating included 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 were revised to incorporate preliminary data from the 2001 Survey of Plant Capacity of the Bureau of the Census, which covers manufacturing, along with other new data on capacity from the U.S. Geological Survey, the U.S. Department of Energy, and other organizations. The statistics on the industrial use of electric power incorporate additional information received from utilities for the past few years and include some data from the 2000 Annual Survey of Manufactures.

The revision release and revised data are available on the Board's web site, at www.federalreserve.gov/releases/G17. The revised data are also available through the web site of the U.S. Department of Commerce. Further information on these revisions is available from the Board's Industrial Output Section (telephone 202-452-3197).

Statistical releases

Last update: December 17, 2002, 9:15 AM