INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION
Industrial production, which had increased 0.7 percent in July, advanced 0.3 percent in August. A surge in the production of motor vehicles and parts accounted for the bulk of the advance. The output of electric utilities, which had moved up sharply earlier in the summer, fell back as temperatures returned to more normal levels. At 135.6 percent of its 1992 average, industrial production in August was 2.5 percent higher than in August 1998. The rate of capacity utilization for total industry rose 0.1 percentage point, to 80.8 percent, a level 1.3 percentage points below its 1967-98 average.
INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION: SUMMARY
Seasonally adjusted
| Index, 1992=100 | Percent change
| 1999 | 1999 | Aug. 98 to
Industrial Production | May June July Aug. | May June July Aug. | Aug. 99
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| | |
Total index | 134.0 134.2 135.2 135.6 | .2 .2 .7 .3 | 2.5
Previous estimates | 134.0 134.2 135.1 | .2 .1 .7 |
| | |
Major market groups: | | |
Products, total | 125.8 125.6 126.0 126.4 | .2 -.1 .3 .4 | 1.2
Consumer goods | 115.6 115.9 115.7 116.6 | .1 .2 -.2 .8 | .4
Business equipment | 171.4 170.8 172.3 172.7 | .5 -.4 .9 .2 | 3.7
Construction supplies | 132.1 131.4 132.8 131.9 | .0 -.6 1.1 -.6 | 3.0
Materials | 147.3 148.2 150.4 150.8 | .2 .6 1.5 .3 | 4.5
| | |
Major industry groups: | | |
Manufacturing | 138.4 138.5 139.3 139.9 | .3 .1 .6 .4 | 3.2
Durable | 165.0 165.6 167.7 168.9 | .5 .4 1.2 .7 | 5.7
Nondurable | 111.7 111.3 111.1 111.2 | -.1 -.4 -.1 .1 | -.1
Mining | 97.9 97.7 98.6 99.2 | -.4 -.2 .9 .6 | -4.4
Utilities | 115.4 117.6 120.4 118.4 | -.4 2.0 2.3 -1.6 | -1.5
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| | Capacity
| Percent of Capacity | Growth
| Average 1982 1988-89 1998 | 1999 | Aug. 98 to
Capacity Utilization | 1967-98 Low High Aug. | May June July Aug. | Aug. 99
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| | |
Total industry | 82.1 71.1 85.4 82.0 | 80.4 80.3 80.7 80.8 | 3.9
Previous estimates | | 80.4 80.3 80.7 |
| | |
Manufacturing | 81.1 69.0 85.7 80.7 | 79.5 79.4 79.6 79.8 | 4.3
Advanced processing | 80.5 70.4 84.2 79.9 | 78.6 78.4 78.6 78.9 | 5.2
Primary processing | 82.4 66.2 88.9 83.1 | 82.5 82.4 82.8 82.7 | 2.3
Mining | 87.5 80.3 88.0 86.3 | 80.8 80.5 81.2 81.7 | 1.1
Utilities | 87.4 75.9 92.6 95.1 | 90.8 92.5 94.6 93.1 | .6
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Note: Estimates for August are preliminary. Estimates from May to July are revised.
Market Groups
The output of consumer goods rose 0.8 percent after having eased a bit in July. The output of durable consumer goods increased 3.2 percent as the production of automotive products, which had dropped 4.6 percent in July, surged 8.1 percent. In contrast, the production of other consumer durables, which had risen 2.0 percent in July, declined 0.6 percent, with the output of household appliances falling back. Even with this decline, the production of appliances remained at a high level, up nearly 5 percent from a year earlier. The production of nondurable consumer goods was unchanged in spite of a 1 percent decline in the production of energy products; the output of non-energy products, which had been trending slightly downward, turned up a bit.
The production of business equipment, which had risen nearly 1 percent in July, advanced 0.2 percent further. Declines in the output of industrial equipment, civilian transport aircraft, and medium and heavy trucks largely offset gains in the production of automobiles and light trucks for business use, information processing equipment, and farm equipment. Despite the upturn, the level of farm equipment production remains depressed.
The production of construction supplies fell 0.6 percent, reversing part of the July gain. So far this quarter, the output of construction supplies is running a little above the elevated pace of the first half of the year. The output of materials increased 0.3 percent after having risen 2 percent over June and July. The growth in the output of durable goods materials slowed, to 0.5 percent, down from 2.2 percent in July; growth in this sector so far this year has largely been fueled by the strong production of parts for motor vehicles and high-tech equipment, as well as a recent pickup in steel production. The output of nondurable goods materials remained sluggish, while the production of energy materials declined 0.3 percent, after having risen more than 1 percent in July.
Industry Groups
Manufacturing output advanced 0.4 percent, a slightly slower rate than in July. Excluding motor vehicles and parts, the gain in August was only 0.2 percent, down from 0.7 percent in July. The 0.7 percent gain in the output of durables was led by gains at makers of light vehicles, computers, and semiconductors. The output indexes for commercial aircraft and parts, lumber, and instruments declined noticeably. The production in nondurable manufacturing edged up after having declined in the preceding three months. Among nondurables, some recovery in chemicals, paper, and printing and publishing offset some easing in the other sectors. On balance, the output of nondurables has changed little over the past year.
The factory operating rate edged up to 79.8 percent, as an increase in advanced-processing industries was partially offset by a small decline in the rate for primary-processing industries. With the strong gain in light-vehicle production, capacity utilization for motor vehicles and parts jumped 3.6 percentage points, to 85.3 percent, its highest level since January 1995.
The operating rate at utilities, which had risen over June and July to 94.6 percent, fell back to 93.1 percent. The operating rate for mining rose for a second month, to 81.7 percent. With the continuing recovery in oil and gas well drilling as well as a further increase in coal mining, mining production increased 0.6 percent in August after a 0.9 percent gain in July.
Revision of Industrial Production and Capacity Utilization
In November the Federal Reserve Board will publish revisions to its measures of
industrial production (IP), capacity, capacity utilization, and industrial use of electric power. The
revisions will begin with 1992 and will incorporate updated source data for more recent years.
This regular updating of source data for IP will include some annual data from the
Bureau of the Census's 1997 Census of Manufactures and from selected editions of its 1998
Current Industrial Reports. Annual data from the U.S. Geological Survey on metallic and
nonmetallic minerals (except fuels) for 1997 and 1998 will also be introduced. The updating will
include revisions to the monthly indicator for each industry (either physical product data,
production-worker hours, or electric power usage) and revised seasonal factors. In addition, the
revision will introduce improved measures of production for selected series.
Capacity and capacity utilization will be revised to incorporate preliminary data
from the 1998 Survey of Plant Capacity of the Bureau of the Census. The statistics on the
industrial use of electric power will incorporate additional information received from utilities for
the past few years and may include some data from the 1997 Census of Manufactures.
Once the revision is published, it will also be made available on the IP area of
the Board's web site, http://www.federalreserve.gov/releases/g17, and on diskettes from
Publications Services (telephone 202-452-3245). The revised data will also be available through
the STAT-USA web site of the Department of Commerce (http://www.stat-usa.gov). Further
information on these revisions is available from the Board's Industrial Output Section (telephone
202-452-3197).
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