Industrial Production and Capacity Utilization - G.17

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Industrial production declined 0.6 percent in November after decreasing 0.4 percent in October. In November, manufacturing production was unchanged from October. The index for utilities dropped 4.3 percent, as unusually warm weather held down the demand for heating. The index for mining fell 1.1 percent in November, with much of this decrease attributable to sizable declines for coal mining and for oil and gas well drilling and servicing. At 106.5 percent of its 2012 average, total industrial production in November was 1.2 percent below its year-earlier level. Capacity utilization for the industrial sector declined 0.5 percentage point in November to 77.0 percent, a rate that is 3.1 percentage points below its long-run (1972–2014) average.

Industrial Production and Capacity Utilization: Summary

Market Groups

Among the major market groups, only business equipment posted a gain in November. The production of consumer goods decreased 0.5 percent, as consumer durables and nondurables registered reductions of 0.2 percent and 0.6 percent, respectively. Within consumer nondurables, a gain of 0.7 percent for its non-energy component was outweighed by a drop of 4.8 percent for consumer energy products. The indexes for defense and space equipment and for construction supplies each declined 0.2 percent, while the output of business supplies moved down 0.7 percent. The index for materials fell 0.8 percent, as decreases for durable materials and energy materials were partly offset by a gain for nondurable materials.

Industry Groups

Manufacturing output was unchanged in November, as the output of nondurable goods gained 0.5 percent, but the production of durable goods declined 0.2 percent and the index for other manufacturing industries (publishing and logging) moved down 1.7 percent. Most nondurable goods industries recorded increases, with the largest gain posted by the food, beverage, and tobacco products category. Among durable goods industries, losses of 1.0 percent or more were recorded by primary metals; electrical equipment, appliances, and components; and motor vehicles and parts. The production of nonmetallic mineral products increased 1.2 percent for the largest gain among durables. Mining output declined 1.1 percent in November and was 8.2 percent below its year-earlier level, with the index for oil and gas well drilling and servicing at less than half of its year-earlier level.

The capacity utilization rate for manufacturing edged down to 76.2 percent, a rate 2.3 percentage points below its long-run average. The operating rate for durable goods manufacturing moved down 0.3 percentage point, while the operating rate for nondurable goods manufacturing moved up 0.4 percentage point. Utilization for other manufacturing (publishing and logging) decreased 0.9 percentage point. The operating rate for mines dropped 1.1 percentage points to 79.4 percent, while capacity utilization for utilities fell 3.4 percentage points to 74.5 percent.

Revision of Industrial Production and Capacity Utilization

The Federal Reserve Board plans to issue its annual revision to the index of industrial production (IP) and the related measures of capacity utilization around the end of the first quarter of 2016. New annual benchmark data for 2014 for manufacturing will be incorporated, as will other annual data, including information on the mining of metallic and nonmetallic minerals (except fuels). The updated IP indexes will include revisions to the monthly indicator (either product data or input data) and to seasonal factors for each industry. In addition, the estimation methods for some series may be changed. Any modifications to the methods for estimating the output of an industry will affect the index from 1972 to the present.

Capacity and capacity utilization will be revised to incorporate data through the fourth quarter of 2015 from the U.S. Census Bureau's Quarterly Survey of Plant Capacity along with new data on capacity from the U.S. Geological Survey, the U.S. Department of Energy, and other organizations.

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