INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION

Industrial production increased 0.6 percent in March after a downward-revised gain of 0.5 percent in February. For the first quarter as a whole, industrial production rose at an annual rate of 4.5 percent. In March, manufacturing output advanced 0.5 percent after little change in February. The output of mines was up 0.9 percent, and the output of utilities increased 0.5 percent. At 111.2 percent of its 2002 average, overall industrial production in March was 3.6 percent above its year-earlier level. Capacity utilization for total industry moved up in March to 81.3 percent, a rate that was 0.3 percentage point above its 1972-2005 average. The factory operating rate, at 80.4 percent, was 0.6 percentage point above its 1972-2005 average. Capacity utilization in mining rose to a rate about equal to its 1972-2005 average. The operating rate for utilities also increased, but it remained below its long-run average.

INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION: SUMMARY
Seasonally adjusted

Industrial production	2002=100				Percent change
	2005 Dec.	2006			2005 Dec.	2006			Mar. '05 to Mar. '06
		Jan.	Feb.	Mar.		Jan.	Feb.	Mar.
Total index	110.4	110.0	110.6	111.2	1.0	-.4	.5	.6	3.6
Previous estimates	110.4	110.2	110.9		1.0	-.3	.7
Major market groups
Final Products	112.3	111.8	112.5	113.0	.7	-.5	.6	.5	4.5
Consumer goods	106.6	105.5	106.2	106.6	.8	-1.0	.7	.5	1.9
Business equipment	126.4	127.7	128.0	129.0	.5	1.1	.2	.8	10.9
Nonindustrial supplies	111.1	109.6	110.1	110.5	.7	-1.4	.5	.3	3.8
Construction	113.1	113.2	112.3	112.5	-.3	.1	-.8	.2	5.9
Materials	108.3	108.4	108.8	109.6	1.3	.1	.4	.8	2.7
Major industry groups
Manufacturing (see note below)	112.2	113.0	112.8	113.4	.4	.7	-.1	.5	4.8
Previous estimates	112.2	113.1	113.1		.4	.8	.0
Mining	95.5	97.1	96.5	97.4	2.6	1.7	-.7	.9	-3.0
Utilities	109.2	96.5	104.2	104.8	4.2	-11.6	8.0	.5	.0

Market Groups

The production of consumer goods rose 0.5 percent in March but fell at an annual rate of 0.5 percent in the first quarter. The index of consumer durables advanced 0.3 percent in March; higher output of automotive products and of appliances, furniture, and carpeting more than offset declines in the production of home electronics and of miscellaneous goods. The index of consumer nondurables rose 0.5 percent but was held down by a drop of 0.4 percent in consumer energy products. The output of non-energy nondurable consumer goods was up 0.7 percent, and gains were widespread.

The production of business equipment rose 0.8 percent in March and increased at an annual rate of 10.6 percent in the first quarter. The indexes for information processing equipment and for industrial and other equipment both increased 1.2 percent in March. Although the production of transit equipment moved lower for the month, it was up at an annual rate of 26.4 percent in the first quarter, an increase driven in part by sharp gains in the output of civilian aircraft and medium and heavy trucks. The output of defense and space equipment fell 0.3 percent in March, after a jump of 1.4 percent in February. Construction supplies moved up 0.2 percent, and business supplies advanced 0.3 percent. Both posted small declines for the first quarter as a whole.

The production of industrial materials rose 0.8 percent in March and was up at an annual rate of 8.8 percent in the first quarter. The indexes for both energy and non-energy materials increased 0.8 percent in March. The output of durable materials advanced 1.1 percent, and consumer parts and equipment parts had notable gains. The output of nondurable materials edged up 0.2 percent, as a decrease in the production of textiles was offset by advances elsewhere.

Industry Groups

Manufacturing production moved up in March and rose 5.4 percent at an annual rate in the first quarter. The output of durable goods rose 0.7 percent in March; among the industries posting gains were fabricated metal products; machinery; computer and electronic products; electrical equipment, appliances, and components; motor vehicles and parts; and furniture and related products. Although the production of nonmetallic mineral products and of aerospace and miscellaneous transportation equipment fell in March, both components posted sizable gains over the first quarter as a whole. The production of nondurable goods rose 0.3 percent in March; it increased at an annual rate of 7.2 percent in the first quarter. Among the nondurable goods industries posting production gains was apparel and leather products, which showed a jump of 2.1 percent in output in March, the fifth consecutive monthly increase. Production in the non-NAICS manufacturing industries (logging and publishing) increased 0.5 percent in March but was down at an annual rate of 1.3 percent in the first quarter.

The output of mines rose in March and was up more than 20 percent at an annual rate in the first quarter, an increase due to the continued recovery of the oil and gas facilities that were affected by last year�s hurricanes and a surge in the output of coal mines. The index for oil and natural gas extraction moved higher in March and increased at a 24 percent annual rate in the first quarter; however, the March level of the index was 6.5 percent below its year-ago level. The output of natural gas utilities rose 3.5 percent; electricity output edged lower.

By stage of processing, capacity utilization for industries in the crude stage of processing rose to 86.0 percent in March, a rate 0.4 percentage point below its 1972-2005 average. For industries in the primary and semifinished stages of processing, the utilization rate rose to 82.4 percent, a level slightly above its 1972-2005 average of 82.1 percent. For producers in the finished stage, the utilization rate moved up to 79.2 percent, which is 1.3 percentage points above its 1972-2005 average.

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

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