Industrial Production and Capacity Utilization - G.17

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Industrial production edged up 0.1 percent in May, the second consecutive month with little or no gain. Revisions to total industrial production in months before May were small. In May, manufacturing production rose 0.4 percent after having fallen 0.5 percent in April. The output of motor vehicles and parts has been held down in the past two months because of supply chain disruptions following the earthquake in Japan. Excluding motor vehicles and parts, manufacturing output advanced 0.6 percent in May and edged down 0.1 percent in April; the decrease in April in part reflected production lost because of tornadoes in the South at the end of the month. Outside of manufacturing, the output of mines increased 0.5 percent in May, while the output of utilities fell 2.8 percent. At 93.0 percent of its 2007 average, total industrial production in May was 3.4 percent above its year-earlier level. Capacity utilization for total industry was flat at 76.7 percent, a rate 3.7 percentage points below its average from 1972 to 2010.

Industrial Production and Capacity Utilization: Summary

Market Groups

The production of consumer goods edged down 0.1 percent in May after having been unchanged in April. Within consumer goods, the index for durables rose 0.2 percent, while the index for nondurables declined 0.2 percent. Among durable goods categories, the output of automotive products fell 0.5 percent, but the indexes for its other major components increased: The output of home electronics advanced 1.7 percent; the output of appliances, furniture, and carpeting rose 1.8 percent; and the index for miscellaneous consumer durables increased 0.7 percent. The decrease in consumer nondurables reflected a drop in residential sales by utilities; elsewhere, the output of fuels advanced and the production of non-energy nondurable goods edged up. Among non-energy nondurables, the indexes for clothing, chemical products, and paper products all increased by about 3/4 percent, but the index for foods and tobacco decreased nearly 1/2 percent.

The output of business equipment rose 1.2 percent in May after 2 months of declines; the index has advanced 9.2 percent over the past 12 months. Sizable gains were recorded both in May and over the past year for all of the major components of business equipment: transit equipment, information processing equipment, and industrial and other equipment. The increase for industrial and other equipment in May was the first substantial gain in this index since January.

The production index for defense and space equipment rose 0.9 percent in May after having been unchanged in each of the previous two months. This index stands 2.5 percent above its year-earlier level.

Among nonindustrial supplies, the output of construction supplies rose 1.4 percent in May. This index is more than 10 percent above its 2009 trough but remains more than 25 percent below its pre-recession peak. The production of business supplies fell 0.3 percent in May; this index stands only about 3 percent above its 2009 trough and more than 13 percent below its pre-recession peak.

The output of materials to be processed further in the industrial sector edged down 0.1 percent for a second consecutive month in May. The output of durable materials rose 0.4 percent in May; a decline of 0.4 percent in consumer parts was more than offset by an increase of 0.7 percent in equipment parts and a gain of 0.4 percent in other durable materials. The output of nondurable materials moved up 0.4 percent after having fallen 0.9 percent in April. The increase in nondurable materials in May was due to a sizable increase for textile materials and a gain for chemical materials; the output of paper materials was unchanged in May. The index for energy materials declined 0.8 percent, with decreases for both primary energy and converted fuel.

Industry Groups

In May, manufacturing output rose 0.4 percent after having fallen 0.5 percent in April. The index for manufacturing in May was 3.7 percent above its year-earlier level. Capacity utilization for manufacturing moved up 0.3 percentage point to 74.5 percent, a rate more than 10 percentage points above its trough in June 2009 but still 4.5 percentage points below its average from 1972 to 2010.

The production index for durable goods moved up 0.6 percent in May after having fallen 0.8 percent in April. Durable goods industries with gains in output included nonmetallic mineral products, fabricated metal products, machinery, computer and electronic products, aerospace and miscellaneous transportation equipment, furniture and related products, and miscellaneous manufacturing. However, losses in output were recorded for the following industries: wood products; primary metals; electrical equipment, appliances, and components; and motor vehicles and parts.

The production of nondurables rose 0.3 percent in May after having declined 0.3 percent in April. In May, decreases for food, beverage, and tobacco products and for printing and support were more than offset by gains for all other categories. Production in the non-NAICS manufacturing industries (logging and publishing) rose 0.7 percent after having fallen for five consecutive months.

In May, mining output rose 0.5 percent. Gains in oil and gas extraction, in support activity for mining, in metal ore mining, and in nonmetallic mineral mining and quarrying more than offset a drop in coal mining. Capacity utilization for mining moved up 0.3 percentage point to 88.6 percent, a rate 1.2 percentage points above its average for the period from 1972 to 2010. The output of utilities fell 2.8 percent, and the capacity utilization rate for utilities fell 2.4 percentage points to 79.0 percent, a rate 7.6 percentage points below its average from 1972 to 2010.

Capacity utilization rates in May for industries grouped by stage of process were as follows: At the crude stage, utilization was unchanged at 86.8 percent, a rate 0.4 percentage point above its long-run (1972--2010) average; at the primary and semifinished stages, utilization edged down 0.2 percentage point to 73.8 percent, a rate 7.5 percentage points below its long-run average; and at the finished stage, utilization moved up 0.2 percentage point to 75.9 percent, a rate 1.4 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 and the related measures of capacity and utilization on March 25, 2011. This revision incorporated detailed data from the 2009 Annual Survey of Manufactures, which was conducted by the U.S. Census Bureau. In addition, data from selected editions of the Census Bureau's 2009 Current Industrial Reports and annual data from the U.S. Geological Survey regarding metallic and nonmetallic minerals (except fuels) for 2009 were incorporated. Monthly indicators (either product data or input data) were revised, and the estimation methods for some series were changed. The new monthly production estimates reflected 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. Data on capacity utilization from the Census Bureau's Quarterly Survey of Plant Capacity for 2010 were incorporated in the revision.

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).

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