INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION

[2006 Revision Notice Below]

Industrial production (IP) rose 0.2 percent in November and was revised down in October to show no change from its September level; the revision to October was in response to weaker incoming data for durable manufacturing. At 112.3 percent of its 2002 average, the index for total IP in November was 3.8 percent above its year-earlier level. Manufacturing production increased 0.3 percent in November after two previous months of declines and was significantly boosted by a sharp increase in the production of motor vehicles and parts. Elsewhere in manufacturing, production was, on net, unchanged. The output at mines slipped 0.2 percent, and the output at utilities edged down 0.1 percent. The rate of capacity utilization for total industry held steady at 81.8 percent, a level 0.8 percentage point above its 1972-2005 average.

INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION: SUMMARY
Seasonally adjusted

Industrial production	2002=100				Percent change
	2006				2006				Nov. '05 to Nov. '06
	Aug.	Sept.	Oct.	Nov.	Aug.	Sept.	Oct.	Nov.
Total index	112.5	112.1	112.1	112.3	.2	-.4	.0	.2	3.8
Previous estimates	112.6	112.0	112.3		.3	-.5	.2
Major market groups
Final Products	112.9	112.6	112.4	112.9	.3	-.2	-.2	.4	3.2
Consumer goods	107.8	107.4	107.0	107.4	.3	-.3	-.4	.3	1.2
Business equipment	128.6	128.6	128.8	130.3	.4	.0	.1	1.2	9.6
Nonindustrial supplies	111.4	110.6	111.1	110.6	.1	-.7	.4	-.5	1.4
Construction	111.3	110.4	109.5	108.6	-.2	-.8	-.8	-.9	-1.9
Materials	112.6	112.1	112.3	112.4	.1	-.4	.1	.2	5.2
Major industry groups
Manufacturing (see note below)	114.3	114.3	113.7	113.9	.4	-.1	-.5	.3	3.4
Previous estimates	114.4	114.2	113.9		.4	-.1	-.3
Mining	99.9	100.8	101.3	101.0	-1.1	.9	.4	-.2	6.6
Utilities	108.8	104.3	108.8	108.7	.0	-4.1	4.3	-.1	3.9

Market Groups

The output of consumer goods increased 0.3 percent and was led by a gain of 1-1/2 percent in the output of durable consumer goods. The production index for automotive products jumped 3-1/2 percent after sharp decreases in September and October, and the index for home electronics increased 2-1/4 percent. In contrast, the indexes for appliances, furniture, and carpeting and for miscellaneous goods declined for a third month. The output of nondurable consumer goods reversed its gain from October and edged down 0.1 percent. An increase of more than 1 percent in the index for foods and tobacco was slightly more than offset by declines in the other major categories of nondurables. The indexes for paper products and for consumer energy products fell more than 1 percent, and smaller declines were recorded for clothing and for chemical products.

The production of business equipment rose 1.2 percent, the fastest pace of increase since July. Sizable gains in the output of trucks and of civilian aircraft boosted the output of transit equipment about 3 percent. The production of information processing equipment advanced 1 percent after a slightly larger gain in October, and the index for industrial and other equipment turned up after declines in the previous two months. The output of defense and space equipment moved down 1/2 percent and was about 3 percent higher than its year-earlier level. The output of construction supplies declined for a fourth consecutive month, and sizable production cuts continued in steel and wood products. The index for business supplies decreased 0.3 percent and continued its string of choppy movements that resulted from changes in the output of commercial energy products. Outside of energy, the output of general business supplies has edged down steadily over the past four months. The production of materials edged up; strength in energy materials, equipment parts, and consumer parts offset declines elsewhere.

Industry Groups

Manufacturing production increased 0.3 percent in November. The output of durable goods rose 0.7 percent, although the gains were spread unevenly among durable goods industries. The output of motor vehicles and parts jumped 3-3/4 percent, reversing its October drop. In October, the production of motor vehicles and parts was at its lowest level in more than 4-1/2 years, and despite the jump in November, output was still 2-1/2 percent below its year-earlier level. The production indexes for computers and electronic products and for miscellaneous goods both posted gains greater than 1 percent, and the indexes for aerospace and miscellaneous transportation equipment, for machinery, and for electrical equipment, appliances, and components also increased. In contrast, durable goods industries that dropped 1 percent or more included furniture and related products and industries connected to construction, such as wood products, nonmetallic mineral products, and primary metals. The output of nondurables was unchanged in November, as gains in the indexes for foods, beverage, and tobacco products, for plastics and rubber products, and for textile and product mills offset declines elsewhere. In the non-NAICS manufacturing industries--logging and publishing--production declined 1-1/2 percent and more than reversed the gain in October.

In November, capacity utilization in manufacturing was unchanged at 80.3 percent, about 1/2 percentage point above its 1972-2005 average. The operating rates for both mining and utilities fell 0.3 percentage point. The rate for mining was almost 4 percentage points above its long-run average, while the rate for utilities was about equal to its long-run average. Capacity utilization for industries at the crude stage of processing increased 0.2 percentage point, to 89.7 percent. The utilization rate for industries at the primary and semifinished stages dropped 0.6 percentage point, to 82.8 percent, while the utilization rate for finished goods producers increased 0.6 percentage point, to 78.2 percent.

Revision of Industrial Production and Capacity Utilization

On December 11, 2006, the Federal Reserve Board issued its annual revision to the index of industrial production (IP) and the related measures of capacity and capacity utilization. The revised IP indexes incorporated data from the 2004 and 2005 Annual Surveys of Manufactures and from selected editions of the 2004 and 2005 Current Industrial Reports, all from the U.S. Census Bureau. Annual data from the U.S. Geological Survey regarding metallic and nonmetallic minerals (except fuels) for 2004 and 2005 were also incorporated. The updating included revisions to the monthly indicator for each industry (either product data or input data) and to seasonal factors.

Capacity and capacity utilization were revised to incorporate preliminary data from the Census Bureau's 2005 Survey of Plant Capacity, which covers manufacturing, along with new data on capacity from the U.S. Geological Survey, the Department of Energy, and other organizations.

The revision 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 these revisions is available 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