INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION
Industrial production increased 0.2 percent in March; revised estimates of output now show declines of 0.2 percent in both January and February. The output of utilities jumped in March as temperatures throughout the country returned to more normal levels. The output of mines rose 0.2 percent, while production in manufacturing slipped 0.2 percent for the second consecutive month. At 127.7 percent of its 1992 average, total industrial production in March was 4.3 percent higher than it was in March 1997. For the first quarter as a whole, output grew about 1 percent at an annual rate. The rate of industrial capacity utilization decreased 0.1 percentage point in March, to 82.2 percent.
The production of consumer goods remained flat, as declines of 0.4 percent in the output of durable consumer goods and of non-energy nondurable goods were offset by an increase of 3.3 percent in the output of energy goods, most notably sales of residential electricity and gas. The falloff was widespread within durable consumer goods. The output of automotive products and furniture declined again, and the production of household appliances dropped back somewhat from the high level in February. Among non-energy nondurable consumer goods, the production of both clothing and paper products dropped more than 1 percent.
The output of business equipment slowed in the first quarter, edging down 0.1 percent in March after having dropped 0.7 percent in January and 0.4 percent in February. Nonetheless, the production of business equipment was still 6.8 percent above the level of a year ago. In March, continued strength in the production of computer and office equipment was more than offset by decreases in the assemblies of motor vehicles and aircraft and in the output of communications equipment.
The production of construction supplies declined 1.0 percent after having increased 1.1 percent in February; output remains well above its level at the end of last year. The output of materials increased 0.5 percent after two months of weakness, but the level of output in March was still slightly below the December level. While the production of durable and nondurable goods materials edged down, the output of energy materials increased sharply. Among durable goods materials, the output of parts for consumer goods, which had spiked up in the fourth quarter, dropped back, on balance, in the first quarter. Growth in the output of equipment parts, which include parts for high-technology equipment, has slowed recently.
The output at durable and nondurable goods producers declined 0.2 percent. Within durables, increases in computer and office equipment, semiconductors, and instruments were offset by weakness elsewhere. In particular, the output of primary metals; stone, clay, and glass products; furniture and fixtures; and transportation equipment posted significant losses. Among nondurable industries, production fell in every major industry, except petroleum and chemical products.
The operating rate in manufacturing declined to 80.9 percent. Utilization rates in advanced-processing and primary-processing industries fell for the third consecutive month. The operating rate in advanced-processing industries in March was 1.4 percentage points below its long-run average, whereas the utilization rate in primary-processing industries was still significantly above its long-run average.
G.17 Release Tables: