INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION
[Annual Revision Notice Below]

Industrial production edged up 0.1 percent in June after having risen 1.3 percent in May. The rate of change for March was revised up, and the rate of change for April was revised down; these revisions resulted primarily from the incorporation of new information on the output of utilities. For the second quarter as a whole, total industrial production increased at an annual rate of 6.6 percent. Manufacturing output moved down 0.4 percent in June after three months of gains at or near 1 percent. The output of mines rose 0.4 percent. The output of utilities increased 2.7 percent, as temperatures moved further above seasonal norms. At 92.5 percent of its 2007 average, total industrial production in June was 8.2 percent above its year-earlier level. The capacity utilization rate for total industry remained unchanged in June at 74.1 percent, a rate 5.9 percentage points above the rate from a year earlier but 6.5 percentage points below its average from 1972 to 2009.

INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION: SUMMARY
Seasonally adjusted

Industrial production	2007=100						Percent change
	2010						2010						June '09 to June '10
	Jan.[r]	Feb.[r]	Mar.[r]	Apr.[r]	May[r]	June[p]	Jan.[r]	Feb.[r]	Mar.[r]	Apr.[r]	May[r]	June[p]
Total index	90.5	90.4	91.0	91.2	92.5	92.5	1.0	.0	.6	.3	1.3	.1	8.2
Previous estimates	90.5	90.5	90.8	91.4	92.6		1.0	.0	.3	.6	1.3
Major market groups
Final Products	92.4	92.0	92.8	92.7	94.2	94.0	1.3	-.4	.8	-.1	1.6	-.2	8.2
Consumer goods	93.7	93.0	93.4	92.6	94.4	93.9	1.2	-.7	.5	-.9	1.9	-.6	6.8
Business equipment	88.6	88.5	89.4	91.0	92.3	93.1	1.3	-.1	1.1	1.8	1.4	.9	11.3
Nonindustrial supplies	83.4	82.8	83.4	84.0	85.4	85.3	.3	-.7	.7	.8	1.6	-.1	4.0
Construction	74.8	74.5	76.1	79.0	79.3	79.1	1.5	-.4	2.2	3.8	.3	-.3	5.2
Materials	91.2	91.7	92.0	92.5	93.4	93.8	1.0	.5	.3	.6	1.0	.4	9.8
Major industry groups
Manufacturing (see note below)	87.8	87.5	88.4	89.1	90.0	89.6	.9	-.3	1.0	.8	1.0	-.4	8.3
Previous estimates	87.8	87.6	88.5	89.2	90.2		.9	-.2	1.1	.8	1.1
Mining	96.5	97.4	99.1	100.8	100.5	100.9	1.7	1.0	1.7	1.7	-.3	.4	8.5
Utilities	102.1	102.6	99.0	94.7	99.9	102.7	.8	.5	-3.4	-4.4	5.6	2.7	7.1

Market Groups

The major market groups recorded a mix of gains and losses in June; however, output for the second quarter as a whole was higher than in the first quarter for almost every major market group. For June, the production of consumer goods moved down 0.6 percent, with declines for both durables and nondurables. The output of consumer durables decreased 1.2 percent: Lower production of automotive products; appliances, furniture, and carpeting; and miscellaneous goods more than offset a gain in home electronics. The production of consumer nondurable goods decreased 0.4 percent. The output of non-energy nondurables fell 1.5 percent; all of the major categories for that index recorded declines except clothing. The output of consumer energy products moved up 3.5 percent as the output of residential utilities increased noticeably. For the second quarter as a whole, the production of consumer goods increased at an annual rate of 1.0 percent, as a rise in durables more than offset a decline in nondurables.

The output of business equipment rose 0.9 percent in June and jumped at an annual rate of 15.7 percent for the second quarter as a whole--the largest quarterly increase for this category since 2005. Within business equipment, the production of transit equipment advanced 2.2 percent in June but was little changed for the quarter as a whole. Elsewhere in business equipment, the index for industrial and other equipment rose 1.0 percent in June and at a robust annual rate of 22 percent for the second quarter overall. The index for information processing edged down in June after having moved up substantially since the middle of last year; it increased at an annual rate of 14.7 percent in the second quarter.

In June, the output of defense and space equipment moved up as production resumed at a factory producing military cargo planes following a strike. The output of construction supplies dipped 0.3 percent in June after three consecutive months of gains but rose at an annual rate of about 23 percent in the second quarter. The production of business supplies was unchanged in June after a noticeable increase in May.

The output of materials to be further processed in the industrial sector increased 0.4 percent in June, with mixed results among its major categories. The output of durable materials edged up 0.2 percent despite a decrease in consumer parts. The index for nondurable materials fell 0.5 percent, with declines in all of its major categories. A gain in utilities output helped push the index for energy materials up 1.1 percent. For the second quarter as a whole, materials output increased at an annual rate of 7.2 percent. The production of durable materials rose 17.0 percent in the second quarter, with solid gains in consumer parts, equipment parts, and other durable materials. By contrast, the output of nondurable materials moved down 1.7 percent, with a decline in chemical materials offsetting gains in paper materials and textile materials. The index for energy materials rose 4.2 percent.

Industry Groups

In June, manufacturing output fell 0.4 percent after moving up for three consecutive months. The manufacturing index increased at an annual rate of 7.9 percent for the second quarter as a whole, a gain similar to the average quarterly increase since production turned up in the third quarter of 2009. Capacity utilization for manufacturing moved down 0.3 percentage point in June to 71.4 percent, a rate 6.0 percentage points above its trough in June 2009 but 7.8 percentage points below its average from 1972 to 2009.

The production index for durable goods manufacturing edged up 0.1 percent in June. Among its major categories, the largest increases were in primary metals and machinery, whereas the largest decreases were recorded in wood products, motor vehicles and parts, and miscellaneous manufacturing. For the second quarter as a whole, durable manufacturing increased at an annual rate of 14.1 percent, with sizable gains recorded in every major category except aerospace and miscellaneous transportation equipment.

The index for nondurable manufacturing decreased 0.7 percent in June; lower production in most nondurable categories more than offset gains in apparel and leather, petroleum and coal products, and plastics and rubber products. For the second quarter as a whole, nondurables output moved up at an annual rate of 2.2 percent. Production in the non-NAICS manufacturing industries (logging and publishing) fell 2.1 percent in June.

In June, unseasonably warm temperatures led to an increase in production of utilities and boosted its operating rate to 82.3 percent. Even so, that rate was 4.4 percentage points below its 1972-2009 average. The increase in mining output was primarily the result of gains in coal mining, natural gas extraction, and metal mining. Capacity utilization in mining edged up to 86.1 percent, a rate 1.3 percentage points below its average from 1972 to 2009.

Capacity utilization rates in June at industries grouped by stage of process were as follows: At the crude stage, utilization increased 0.4 percentage point to 85.0 percent, a rate 1.5 percentage points below its average for the period from 1972 to 2009; at the primary and semifinished stages, utilization rose 0.5 percentage point to 72.1 percent, a rate 9.5 percentage points below its long-run average; and at the finished stage, utilization decreased 0.6 percentage point to 72.6 percent, a rate 4.9 percentage points below its long-run average.

Revision of Industrial Production and Capacity Utilization

The Federal Reserve Board released its annual revision to the index of industrial production (IP) and the related measures of capacity and capacity utilization on June 25, 2010. In this revision, the base year for the IP index was advanced from 2002 to 2007, which lowered the level of the IP index for most periods. In addition to the new base, the revised IP indexes incorporated detailed data from the 2007 Economic Census and the 2008 Annual Survey of Manufactures, both conducted by the U.S. Census Bureau. Data from selected editions of the Census Bureau's 2008 and 2009 Current Industrial Reports have also been incorporated along with annual data from the U.S. Geological Survey regarding metallic and nonmetallic minerals (except fuels) for 2008. The revised indexes reflect updated price deflators from the Bureau of Economic Analysis. For this release, monthly indicators (either product data or input data) were revised, and the estimation methods for some series were changed. The new monthly production estimates reflect the incorporation of updated seasonal factors and monthly and quarterly source data that became available (or were revised) after the closing of the reporting window. Capacity and capacity utilization were revised to incorporate data from the Census Bureau's Quarterly Survey of Plant Capacity for the fourth quarters of 2008 and 2009, which covered manufacturing, along with new data on capacity from the U.S. Geological Survey, the Department of Energy, and other organizations.

The published revision release 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 the revision 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