INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION

[2007 Revision Notice Below]

Industrial production decreased 0.5�percent in October after having increased 0.2 percent in September. At 114.0 percent of its 2002 average, total industrial production in October was 1.8 percent above its year-earlier level. Output in the manufacturing sector fell 0.4�percent in October. The output of utilities dropped 1.6�percent, primarily because of a decline in gas utilities; the output at mines fell 0.6�percent, reversing September's gain. Capacity utilization for total industry declined to 81.7 percent, a rate equal to its year-earlier level but 0.7 percentage point above its 1972-2006 average.

INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION: SUMMARY
Seasonally adjusted

Industrial production	2002=100				Percent change
	2007				2007				Oct. '06 to Oct. '07
	July	Aug.	Sept.	Oct.	July	Aug.	Sept.	Oct.
Total index	114.2	114.4	114.6	114.0	.6	.1	.2	-.5	1.8
Previous estimates	114.2	114.3	114.4		.6	.0	.1
Major market groups
Final Products	115.4	115.1	115.2	114.6	.6	-.2	.1	-.5	1.9
Consumer goods	109.7	109.6	109.4	108.7	.5	-.1	-.2	-.7	1.3
Business equipment	133.9	133.3	134.4	134.3	1.3	-.4	.9	-.1	4.6
Nonindustrial supplies	111.2	111.6	111.8	111.0	.0	.3	.2	-.7	.1
Construction	109.9	109.6	108.9	108.5	-.2	-.3	-.6	-.4	.1
Materials	114.2	114.7	115.0	114.5	.9	.4	.3	-.4	2.3
Major industry groups
Manufacturing (see note below)	116.6	116.1	116.3	115.8	.8	-.4	.2	-.4	2.1
Previous estimates	116.6	116.1	116.2		.8	-.4	.1
Mining	101.3	101.3	101.9	101.3	.9	.0	.6	-.6	.4
Utilities	106.2	111.8	111.7	109.9	-1.0	5.2	-.1	-1.6	.1

Market Groups

The output of consumer goods dropped 0.7 percent in October; the decreases were widespread. Among durable consumer goods, the production index for automotive products moved down 0.6 percent, its third consecutive monthly decline; even so, the index was 5.2 percent above its year-earlier level. Elsewhere, the production indexes both for home electronics and for appliances, furniture, and carpeting fell more than 0.5 percent, and the output of miscellaneous durable goods declined more than 1 percent. The production of nondurable non-energy consumer goods declined 0.5�percent because of losses in all its major components: consumer chemical products, paper products, clothing, and foods and tobacco. After having edged down 0.1 percent in September, the index for consumer energy goods fell 1.1 percent in October, as the output of gas utilities was held down by relatively warm weather.

The index for business equipment edged down 0.1 percent in October. The output of transit equipment rose 1.7 percent; the gain was led by continued strength in assemblies of civilian aircraft. The index for information processing equipment fell 0.3 percent; the decrease was led by declines in the output of electromedical equipment and of broadcasting, wireless, and other communications equipment. The index for industrial and other equipment decreased 0.7 percent as a result of a large drop in the production of construction equipment, which had jumped in September. The output of defense and space equipment advanced 0.4 percent in October.

In October, the index for construction supplies moved down 0.4 percent, its fourth consecutive monthly decline; nevertheless, the index remained 0.1 percent above its year-earlier level. The index for business supplies dropped 0.8�percent in October; the output of both non-energy business supplies and commercial energy products fell.

The production of materials fell 0.4 percent in October after having risen 0.3 percent in September. Within non-energy materials, the index for durable materials edged down 0.1�percent in October. A gain in equipment parts was offset by a decline in consumer parts, which reflected lower output of motor vehicle parts, and by a decrease in other durable materials. The output of nondurable materials fell 0.6 percent, as a decrease in chemical materials outweighed a rise in paper materials. The index for energy materials dropped 0.7 percent after having risen 0.3 percent in September.

Industry Groups

Manufacturing output decreased 0.4 percent in October after having increased 0.2 percent in September. The factory operating rate declined 0.4 percentage point, to 80.1 percent, a rate that is 0.3�percentage point above its 1972-2006 average. The production of durable goods moved down 0.2�percent. Notable decreases were recorded in wood products; nonmetallic mineral products; fabricated metal products; machinery; electrical equipment, appliances, and components; motor vehicles and parts; and miscellaneous products. Increases occurred in primary metals, computer and electronic products, and aerospace and miscellaneous transportation equipment. The production of nondurable goods decreased 0.4 percent after having risen the same amount in September. Significant declines were registered for food, beverage, and tobacco products; apparel and leather; printing and support; and chemicals. These decreases more than offset increases in the output of paper and of petroleum and coal products. The output of non-NAICS industries (logging and publishing) fell 1.5�percent.

The output of utilities decreased 1.6 percent in October. The output of natural gas utilities tumbled 7.7 percent; the output of electric utilities moved down 0.5 percent. The operating rate at utilities dropped 1.4 percentage points, to 86.7 percent, a rate equal to its 1972-2006 average. The output of mines decreased 0.6�percent, and the capacity utilization rate for mining fell to 90.9 percent, a rate 3.5�percentage points above its long-run average.

In October, by stage of process, capacity utilization for industries at the crude stage fell 0.8 percentage point, to 90.2 percent, a rate 3.7 percentage points above its 1972-2006 average. The operating rate for industries at the primary and semifinished stages decreased 0.6 percentage point, to 82.2 percent, a rate equal to its long-run average. The operating rate for industries at the finished stage moved down 0.4 percentage point, to 78.3�percent, 0.5 percentage point above its long-run average.

Notice

Revision of Industrial Production and Capacity Utilization

The Federal Reserve Board plans to issue an annual revision to the index of industrial production (IP) and the related measures of capacity and capacity utilization around the end of March 2008. The revised IP indexes will incorporate data from the 2006 Annual Surveys of Manufacturers and data from selected editions of the 2006 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 2006 will also be incorporated. The updating will include revisions to the monthly indicator (either product data or input data) and to seasonal factors for each industry as well as changes in the estimation methods for some series. Any changes to methods for estimating the output of an industry will affect the index from 1972 to the present.

After the publication of the revision, later monthly releases will include new or revised indexes for a six-month reporting window: one month of new data and revisions to the previous five months of data. The new longer reporting window will allow the incorporation of additional lagging data before an annual revision. The longer reporting window will cause the latest month of data shown for a few indexes to be as many as five months earlier than the latest value for aggregate industrial production; data for detailed production indexes are not shown in the supplement to the G.17 until either the underlying data are available or the reporting window is closed. Currently, the data issued for only one or two of the published indexes would be affected by this change.

Capacity and capacity utilization will be revised to incorporate data from the Census Bureau's 2006 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.

Once the revision is published, it will be available on the Board's website at www.federalreserve.gov/releases/G17. The revised data will also be available through the website of the Department of Commerce. Further information on these revisions can be obtained 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