Industrial Production and Capacity Utilization

Release Date: August 15, 2003
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INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION

[2003 Revision Notice Below]

Industrial production rose 0.5 percent in July after having changed little in the previous two months. Manufacturing output rose 0.2 percent after gains in May and June. The output at utilities climbed 3.9 percent, as the weather turned warm in July after an unusually cool June. Production in mining fell 0.4 percent.

At 110.0 percent of its 1997 average, industrial production was 1.4 percent lower than its level in July 2002. Capacity utilization for total industry rose 0.3 percentage point, to 74.5 percent, a rate 6.8 percentage points below its 1972-2002 average.

INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION: SUMMARY Seasonally adjusted -------------------------------------------------------------------------------------------------------------------------------------- | 1997=100 | Percent change | ----------------------------------------------- | ------------------------------------------------- | 2003 | 2003 | July '02 to Industrial production | Apr. May June July | Apr. May June July | July '03 -------------------------------------------------------------------------------------------------------------------------------------- | | | Total index | 109.5 109.5 109.5 110.0 | -.5 .1 .0 .5 | -1.4 Previous estimates | 109.5 109.6 109.7 | -.5 .1 .1 | | | | Major market groups | | | Final Products | 106.3 106.3 106.5 107.0 | -.5 .0 .2 .5 | -.8 Consumer goods | 106.8 106.5 106.7 107.2 | -.4 -.2 .1 .5 | -1.2 Business equipment | 104.8 105.3 105.7 106.1 | -.7 .4 .4 .4 | -1.1 Nonindustrial supplies | 113.0 113.7 113.3 113.7 | -.7 .6 -.4 .4 | -1.6 Construction | 101.0 101.6 101.6 101.8 | -.4 .6 .0 .2 | -2.6 Materials | 111.4 111.3 111.1 111.6 | -.6 -.2 -.1 .4 | -1.9 | | | Major industry groups | | | Manufacturing (see note below) | 110.1 110.3 110.6 110.8 | -.7 .2 .3 .2 | -1.4 Previous estimates | 110.2 110.3 110.8 | -.6 .1 .4 | Mining | 93.0 92.6 93.8 93.4 | .2 -.4 1.2 -.4 | -1.0 Utilities | 112.1 111.1 107.4 111.5 | .4 -.9 -3.3 3.9 | -1.9 -------------------------------------------------------------------------------------------------------------------------------------- | | Capacity | Percent of capacity | growth | --------------------------------------------------------------------------------- | --------------- | Average 1982 1988-89 2002 | 2003 | July '02 to Capacity utilization | 1972-2002 Low High July | Apr. May June July | July '03 -------------------------------------------------------------------------------------------------------------------------------------- | | | Total industry | 81.3 70.8 85.1 76.4 | 74.3 74.3 74.2 74.5 | 1.1 Previous estimates | | 74.4 74.3 74.3 | | | | Manufacturing (see note below) | 80.2 68.6 85.6 74.3 | 72.5 72.6 72.7 72.8 | .7 Previous estimates | | 72.5 72.6 72.8 | Mining | 86.9 78.6 85.6 85.7 | 84.2 83.9 84.9 84.6 | .3 Utilities | 86.7 77.2 92.6 89.6 | 84.5 83.4 80.4 83.2 | 5.7 | | | Stage-of-process groups | | | Crude | 86.4 77.2 88.6 84.4 | 82.2 82.0 82.7 82.5 | -.2 Primary and semifinished | 82.2 67.9 86.2 78.6 | 76.5 76.5 75.9 76.4 | 1.4 Finished | 78.5 71.3 83.1 71.9 | 70.1 70.1 70.4 70.5 | .8 -------------------------------------------------------------------------------------------------------------------------------------- r Revised. p Preliminary.

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

Market Groups

The output of consumer goods rose 0.5 percent in July. Consumer durables production, driven by a 3.5 percent increase in automotive products, rose 2.3 percent. The production of consumer nondurables edged down 0.1 percent. A large rise in consumer energy products--in particular, utility sales to residences--balanced broad-based decreases in non-energy consumer nondurables. The output of clothing fell for another month, and drops in output for chemical products and for paper products reversed most of their June gains.

The production of business equipment rose 0.4 percent for a third consecutive month. Increases in the output of farm equipment, construction machinery, and office furniture contributed to a rise in the index for industrial and other equipment. The production of information processing equipment edged up. A rise in the assemblies of light trucks offset decreases in the output of other business vehicles and commercial aircraft, movements that left the production of transit equipment little changed. Defense and space equipment rose 1.1 percent and is 6.5 percent above year-ago levels. Business supplies reversed a small decline in June, and construction supplies edged up 0.2 percent. Materials production rose 0.4 percent after five months of decline. Energy materials picked up as a result of increased electricity generation. Gains in the output of motor vehicle parts and semiconductors boosted the output of durable goods materials, while weakness in textile materials reduced the output of nondurable goods materials.

Industry Groups

Production in manufacturing increased 0.2 percent, as an increase for durables was mostly offset by declines at nondurable and other (non-NAICS) manufacturers. Output in durable manufacturing rose 0.8 percent in July, after gains in May and June. Production indexes increased nearly 1 percent or more for wood products, primary metals, computer and electronic products, motor vehicles and parts, and furniture. The output of nondurable manufacturers declined 0.4 percent. The output of chemicals and food declined noticeably. Capacity utilization in manufacturing edged up to 72.8 percent.

In mining, declines in natural gas and crude oil extraction led to a 0.4 percent decrease in production. Capacity utilization in mining edged down to 84.6 percent. With the sharp rise in output, the operating rate at utilities rose to 83.2 percent.

Capacity utilization for industries in the crude stage of processing fell 0.2 percentage point, to 82.5 percent. Utilization for industries in the primary and semifinished stage rose 0.5 percentage point, to 76.4 percent. Utilization for industries in the finished goods stage edged up 0.1 percentage point, to 70.5 percent.

Revision of Industrial Production and Capacity Utilization

In the fall of 2003, the Federal Reserve Board will publish 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 updated measures will reflect the incorporation of newly available, more comprehensive source data typical of annual revisions. The updating of source data for IP in the 2003 annual revision will include annual data from the Census Bureau's 2001 Annual Survey of Manufactures and from selected editions of its 2001 and 2002 Current Industrial Reports. Annual data from the U.S. Geological Survey regarding metallic and nonmetallic minerals (except fuels) for 2001 and 2002 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 revisions to seasonal factors.

Capacity and capacity utilization will be revised to incorporate preliminary data from the 2002 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 Department of Energy, and other organizations. The statistics on the industrial use of electric power will incorporate additional information received from utilities for the past few years and will include some data from the 2001 Annual Survey of Manufactures.

Once the revision is published, it will be made available on the Board's web site, www.federalreserve.gov/releases/G17. The revised data will also be available through the web site of the 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: August 15, 2003, 9:15 AM