Industrial Production and Capacity Utilization - G.17

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Industrial production increased 0.8 percent in March and rose at an annual rate of 6.0 percent for the first quarter as a whole. Manufacturing output advanced 0.7 percent in March, its fourth consecutive month of strong expansion; factory production climbed at an annual rate of 9.1 percent in the first quarter. Outside of manufacturing, the output of mines rose 0.6 percent in March, while the output of utilities increased 1.7 percent after declining significantly in the preceding two months. At 93.6 percent of its 2007 average, total industrial production was 5.9 percent above its year-earlier level. The rate of capacity utilization for total industry rose 0.5 percentage point to 77.4 percent, a rate 3.0 percentage points below its average from 1972 to 2010.

Industrial Production and Capacity Utilization: Summary

Market Groups

The production of consumer goods increased 0.9 percent in March and rose at an annual rate of 4.9 percent in the first quarter. In March, the output of consumer durable goods moved up 2.1 percent, with gains in nearly all of its major categories. The production of automotive products advanced 3.6 percent and was 15.4 percent above its year-earlier level. The index for home electronics increased 0.7 percent, and the index for appliances, furniture, and carpeting climbed 2.0 percent; however, the production of miscellaneous consumer durables decreased 0.4 percent. The output of non-energy nondurable goods rose 0.3 percent, as gains in chemical products and in paper products more than offset declines in clothing and in foods and tobacco. The output of consumer energy products advanced 1.3 percent, as residential sales by utilities increased but the production of fuels decreased.

The index for business equipment rose 0.4 percent in March after three months of gains of 1.0 percent or more. For the first quarter as a whole, the output of business equipment advanced at an annual rate of 15.3 percent with sizable increases in each of its three main components. For March, the output of transit equipment rose 1.8 percent, its third consecutive monthly increase, and the index for information processing equipment moved up 0.5 percent. The production of industrial and other equipment edged down for a second consecutive month; nonetheless, this index jumped at an annual rate of nearly 16 percent for the first quarter as a whole.

The production index for defense and space equipment gained 1.1 percent in March after having increased 2.2 percent the previous month. This index rose 5.9 percent during the 12 months ending in March.

Among nonindustrial supplies, the output of construction supplies rose 1.5 percent in March. This index has risen more than 12 percent from its trough during December 2009 but remains about 25 percent below its peak in December 2006. The production of business supplies increased 0.7 percent in March. Within business supplies, the index for commercial energy advanced 1.7 percent, and the index for non-energy business supplies moved up 0.3 percent--its fifth consecutive monthly increase.

The output of materials to be processed further in the industrial sector rose 0.8 percent in March after having edged down 0.1 percent in February. For the first quarter as a whole, the production of these materials increased at an annual rate of 5.4 percent, about the same pace as in the fourth quarter of 2010. The output of durable materials moved up 0.8 percent in March. The indexes for all of the major components of durable materials advanced; the largest gain was for equipment parts, which increased 1.2 percent. The output of nondurable materials rose 1.0 percent after having declined a similar amount in February. Among nondurable materials, increases in the production of both chemical materials and paper materials in March were partly offset by a decrease in the output of textile materials. The index for energy materials moved up 0.5 percent.

Industry Groups

In March, manufacturing output rose 0.7 percent and was 6.6 percent above its year-earlier level. Capacity utilization for manufacturing moved up 0.4 percentage point to 75.3 percent, a rate 3.7 percentage points below its average from 1972 to 2010 but almost 11 percentage points above its trough in June 2009.

The production index for durable goods advanced 1.0 percent in March, and gains were widespread across its major categories. The output of motor vehicles and parts rose 3.0 percent following an increase of 4.6 percent in February; since December 2010, total motor vehicle assemblies have risen about 1.3 million units to an annual rate of 8.9 million units. In March, sizable gains in output also were recorded in the following industries: wood products, fabricated metal products, nonmetallic mineral products, and aerospace and miscellaneous transportation equipment. Among other industries, smaller increases were recorded for primary metals; machinery; computer and electronic products; electrical equipment, appliances, and components; and furniture and related products.

The production of nondurables rose 0.5 percent in March and at an annual rate of 3.3 percent in the first quarter. In March, a small decline for food, beverage, and tobacco products and larger declines for apparel and leather, for textiles, and for printing were more than offset by large gains for chemicals and for paper. Production in the non-NAICS manufacturing industries (logging and publishing) was down 0.1 percent, its fourth consecutive decline.

In March, mining output rose 0.6 percent, and capacity utilization moved up 0.3 percentage point to 88.1 percent, a rate 0.7 percentage point above its average for the period from 1972 to 2010. Gains in natural gas extraction, support activity for mining, and metal ore mining more than offset a decrease in coal mining. The output of utilities increased 1.7 percent, and the capacity utilization rate rose to 79.7 percent, a rate 6.9 percentage points below its average from 1972 to 2010.

Capacity utilization rates in March for industries grouped by stage of process were as follows: At the crude stage, utilization increased 0.5 percentage point to 87.2 percent, a rate 0.8 percentage point above its long-run (1972 to 2010) average; at the primary and semifinished stages, utilization rose 0.6 percentage point to 74.4 percent, a rate 6.9 percentage points below its long-run average; and at the finished stage, utilization rose 0.5 percentage point to 76.8 percent, a rate 0.5 percentage point below its long-run average.

Revision of Industrial Production and Capacity Utilization

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