Industrial Production and Capacity Utilization

Release Date: July 16, 2003
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INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION
[2003 Revision Notice Below]

Industrial production rose 0.1 percent in both May and June. Manufacturing posted gains of 0.1 percent in May and 0.4 percent in June, thereby rising in consecutive months for the first time since August. Production in mining increased 1.0 percent in June, but the output of utilities fell sharply, a drop reflecting unseasonably cool weather. Despite the recent gains, industrial output decreased at an annual rate of 3.2 percent in the second quarter.

At 109.7 percent of its 1997 average, industrial production was 1.0 percent lower than its level in June 2002. Capacity utilization for total industry was unchanged at 74.3 percent, a rate 7 percentage points below its 1972-2002 average.

INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION: SUMMARY Seasonally adjusted -------------------------------------------------------------------------------------------------------------------------------------- | 1997=100 | Percent change | ----------------------------------------------- | ------------------------------------------------- | 2003 | 2003 | June '02 to Industrial production | Mar. Apr. May June | Mar. Apr. May June | June '03 -------------------------------------------------------------------------------------------------------------------------------------- | | | Total index | 110.1 109.5 109.6 109.7 | -.6 -.5 .1 .1 | -1.0 Previous estimates | 110.1 109.4 109.6 | -.6 -.6 .1 | | | | Major market groups | | | Final Products | 106.7 106.2 106.2 106.6 | -.4 -.5 .0 .4 | -.8 Consumer goods | 107.2 106.7 106.5 107.0 | -.5 -.5 -.2 .4 | -.8 Business equipment | 105.5 104.8 105.2 105.5 | -.3 -.7 .4 .3 | -2.3 Nonindustrial supplies | 113.8 112.9 113.4 112.9 | -.8 -.8 .5 -.4 | -1.6 Construction | 101.4 100.7 101.0 101.0 | -.4 -.7 .3 -.1 | -3.3 Materials | 112.1 111.6 111.5 111.5 | -.7 -.4 -.1 .0 | -1.0 | | | Major industry groups | | | Manufacturing (see note below) | 110.9 110.2 110.3 110.8 | -.2 -.6 .1 .4 | -1.0 Previous estimates | 110.9 110.1 110.3 | -.2 -.7 .2 | Mining | 92.8 92.9 93.4 94.4 | .0 .1 .6 1.0 | .9 Utilities | 111.7 111.8 111.0 107.1 | -4.0 .1 -.8 -3.5 | -2.7 -------------------------------------------------------------------------------------------------------------------------------------- | | Capacity | Percent of capacity | growth | --------------------------------------------------------------------------------- | --------------- | Average 1982 1988-89 2002 | 2003 | June '02 to Capacity utilization | 1972-2002 Low High June | Mar. Apr. May June | June '03 -------------------------------------------------------------------------------------------------------------------------------------- | | | Total industry | 81.3 70.8 85.1 75.9 | 74.8 74.4 74.3 74.3 | 1.1 Previous estimates | | 74.8 74.3 74.3 | | | | Manufacturing (see note below) | 80.2 68.6 85.6 74.1 | 73.1 72.5 72.6 72.8 | .7 Previous estimates | | 73.1 72.5 72.6 | Mining | 86.9 78.6 85.6 84.9 | 84.1 84.2 84.6 85.4 | .3 Utilities | 86.7 77.2 92.6 87.2 | 84.6 84.3 83.4 80.2 | 5.9 | | | Stage-of-process groups | | | Crude | 86.4 77.2 88.6 83.3 | 82.8 82.4 82.6 83.1 | -.2 Primary and semifinished | 82.2 67.9 86.2 77.9 | 77.0 76.5 76.5 75.9 | 1.4 Finished | 78.5 71.3 83.1 71.9 | 70.5 70.0 70.0 70.5 | .8 -------------------------------------------------------------------------------------------------------------------------------------- r Revised. p Preliminary.

The statistics in this release cover output, capacity, and capacity utilization in the industrial sector, which the Federal Reserve defines as manufacturing, mining, and electric and gas utilities. Manufacturing comprises those industries included in the North American Industry Classification System, or NAICS, manufacturing plus the logging and newspaper, periodical, book and directory publishing industries that have traditionally been considered manufacturing and included in the industrial sector.

Market Groups

In June, the output of consumer goods rose 0.4 percent as the production of both durables and non-energy nondurables posted gains; the production of consumer energy products, held down by a sharp decline in utility output for residential use, fell 3.0 percent. Among durables, the output of automotive products, which had fallen sharply over the previous four months, rose 1.5 percent in June. The output of other durable consumer goods eased a bit after having increased in May. The production of non-energy nondurables rose 1.1 percent, with notable expansions in chemical products, paper products, and foods and tobacco.

The production of business equipment rose for a second month, led by a broad-based increase in industrial and other equipment. The production of information processing equipment was little changed; another gain in the output of computers was offset by declines in the production of communications equipment. The output of transit equipment fell 1.5 percent with weakness in medium and heavy trucks as well as in commercial aircraft. Defense and space equipment rose 0.4 percent after a downward-revised 1.0 percent rise in May. Both construction supplies and business supplies, which increased in May, posted small declines in June. The output of materials was unchanged as small gains in durables and nondurables were about offset by the weak level of electricity generation.

Industry Groups

Capacity utilization in manufacturing edged up 0.2 percentage point in June, to 72.8 percent. The output of both durable and nondurable manufacturers (NAICS) rose 0.4 percent. Increases among durables were widespread, with the most significant gains occurring in motor vehicles and parts and in primary metals. The increase in nondurables was concentrated in chemicals and in food, beverage, and tobacco products.

In mining, the 1.0 percentage point increase in output reflected widespread gains, and capacity utilization moved up to 85.4 percent. With the sharp drop in output, capacity utilization at utilities fell to 80.1 percent in June, the lowest level since July 1983.

Capacity utilization for industries in the crude stage of processing rose 0.5 percentage point, to 83.1 percent, and utilization for industries in the finished goods stage rose 0.5 percentage point, to 70.5 percent. Capacity utilization for the industries in the primary and semifinished stage fell 0.6 percentage point, to 75.9 percent.

Revision of Industrial Production and Capacity Utilization

In the fall of 2003, the Federal Reserve Board will publish a revision to the index of industrial production (IP), the related measures of capacity and capacity utilization, and the data on industrial use of electric power. The updated measures will reflect the incorporation of newly available, more comprehensive source data typical of annual revisions. The updating of source data for IP in the 2003 annual revision will include annual data from the Census Bureau's 2001 Annual Survey of Manufactures and from selected editions of its 2001 and 2002 Current Industrial Reports. Annual data from the U.S. Geological Survey regarding metallic and nonmetallic minerals (except fuels) for 2001 and 2002 will also be introduced. The updating will include revisions to the monthly indicator for each industry (either physical product data, production-worker hours, or electric power usage) and revisions to seasonal factors.

Capacity and capacity utilization will be revised to incorporate preliminary data from the Census Bureau's 2002 Survey of Plant Capacity of the Bureau of the Census, which covers manufacturing, along with other new data on capacity from the U.S. Geological Survey, the Department of Energy, and other organizations. The statistics on the industrial use of electric power will incorporate additional information received from utilities for the past few years and will include some data from the 2001 Annual Survey of Manufactures.

Once the revision is published, it will be made available on the Board's web site, www.federalreserve.gov/releases/G17. The revised data will also be available through the web site of the Department of Commerce. Further information on these revisions is available from the Board's Industrial Output Section (telephone 202-452-3197).

Statistical releases

Last update: July 16, 2003, 9:15 AM