Industrial Production and Capacity Utilization - G.17

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Release Date: June 16, 2020
Revision of Industrial Production and Capacity Utilization Notice Below

Total industrial production increased 1.4 percent in May, as many factories resumed at least partial operations following suspensions related to COVID-19. Even so, total industrial production in May was 15.4 percent below its pre-pandemic level in February. Manufacturing output—which fell sharply in March and April—rose 3.8 percent in May; most major industries posted increases, with the largest gain registered by motor vehicles and parts. The indexes for mining and utilities declined 6.8 percent and 2.3 percent, respectively. At 92.6 percent of its 2012 average, the level of total industrial production was 15.3 percent lower in May than it was a year earlier. Capacity utilization for the industrial sector increased 0.8 percentage point to 64.8 percent in May, a rate that is 15.0 percentage points below its long-run (1972–2019) average and 1.9 percentage points below its trough during the Great Recession.

Industrial Production and Capacity Utilization: Summary
Seasonally adjusted
Industrial production 2012=100 Percent change
2019
Dec.[r] 		2020 2019
Dec.[r] 		2020 May '19 to
May '20
Jan.[r] Feb.[r] Mar.[r] Apr.[r] May[p] Jan.[r] Feb.[r] Mar.[r] Apr.[r] May[p]
       
Total index 109.7 109.2 109.4 104.4 91.3 92.6 -.4 -.4 .1 -4.6 -12.5 1.4 -15.3
Previous estimates 109.6 109.1 109.3 104.3 92.6   -.4 -.5 .1 -4.5 -11.2    
       
Major market groups
Final Products 103.3 101.9 102.8 96.6 81.9 85.2 -.8 -1.4 .9 -6.0 -15.2 3.9 -17.3
Consumer goods 105.5 104.6 105.8 99.5 86.9 90.3 -1.1 -.9 1.2 -5.9 -12.7 3.9 -14.0
Business equipment 101.3 98.4 98.1 90.4 69.6 73.7 -.5 -2.8 -.4 -7.8 -23.0 5.8 -27.1
Nonindustrial supplies 108.6 109.4 109.8 104.3 91.9 93.5 .2 .7 .3 -5.0 -11.9 1.8 -13.6
Construction 117.5 120.2 120.1 114.9 101.3 102.9 1.0 2.2 -.1 -4.3 -11.9 1.6 -11.2
Materials 115.2 115.3 114.7 111.1 99.4 98.6 -.1 .1 -.6 -3.2 -10.5 -.8 -14.0
       
Major industry groups
Manufacturing (see note below) 105.1 105.0 105.0 99.4 84.0 87.2 .2 -.1 .0 -5.3 -15.5 3.8 -16.5
Previous estimates 105.1 104.9 104.9 99.1 85.5   .2 -.1 .0 -5.5 -13.7    
Mining 133.8 135.4 133.2 130.7 122.7 114.3 .9 1.2 -1.6 -1.9 -6.1 -6.8 -14.1
Utilities 103.4 98.6 102.2 99.1 99.1 96.8 -5.7 -4.7 3.6 -3.1 .1 -2.3 -8.0

Capacity utilization Percent of capacity Capacity
growth
Average
1972-
2019 		1988-
89
high 		1990-
91
low 		1994-
95
high 		 
2009
low 		 
2019
May 		   
2019
Dec.[r] 		2020 May '19 to
May '20
Jan.[r] Feb.[r] Mar.[r] Apr.[r] May[p]
       
Total industry 79.8 85.1 78.8 85.0 66.7 77.8 77.2 76.8 76.8 73.2 64.0 64.8 1.7
Previous estimates             77.2 76.7 76.7 73.2 64.9    
       
Manufacturing (see note below) 78.2 85.5 77.3 84.6 63.7 75.4 75.3 75.1 75.1 71.1 60.0 62.2 1.1
Previous estimates             75.2 75.1 75.0 70.8 61.1    
Mining 87.2 86.3 84.3 88.6 78.3 91.3 89.2 90.2 88.5 86.6 81.2 75.4 3.9
Utilities 85.2 93.2 84.7 93.2 78.2 77.2 74.8 71.1 73.5 71.1 70.9 69.1 2.8
       
Stage-of-process groups
Crude 86.2 87.8 84.7 90.0 76.4 89.1 87.9 88.4 87.2 85.4 79.9 76.1 3.0
Primary and semifinished 80.3 86.4 78.1 87.8 63.9 76.0 74.9 74.5 74.8 71.0 62.2 63.2 1.4
Finished 76.7 83.3 77.3 80.6 66.5 74.4 74.6 73.8 74.0 70.0 58.6 61.3 1.5
[r] Revised. [p] Preliminary.
Market Groups

The major market groups posted broad-based gains in their production indexes in May, but each remained well below its pre-pandemic level. The index for consumer goods rose 3.9 percent, led by a significant rebound for automotive products.[1] The production of business equipment rose 5.8 percent and was boosted by a substantial increase in transit equipment as most factories producing motor vehicles and civilian aircraft reopened. The indexes for defense and space equipment, construction supplies, and business supplies also recorded gains. The output of materials decreased 0.8 percent, as the production of energy materials was held down by declines related to oil extraction that more than offset increases in the indexes for durable and nondurable materials.

Industry Groups

Manufacturing output rose 3.8 percent in May, but it was still 16.9 percent below its pre-pandemic level in February. The index for durable manufacturing increased 5.8 percent in May; the most sizable gain among its components was for motor vehicles and parts, where output rose substantially but also remained more than 60 percent below its February level. Durable goods industries that recorded production increases between 8 percent and 10 percent include nonmetallic mineral products, aerospace and miscellaneous transportation equipment, and furniture and related products. The index for nondurables rose 2.1 percent, with advances of around 10 percent or more for textile and product mills, for apparel and leather, for printing and support, and for plastics and rubber products. The output of other manufacturing (publishing and logging) moved up 2.5 percent.

The output of utilities fell 2.3 percent in May, as both gas and electric utilities posted losses. Mining output dropped 6.8 percent, with declines in nearly all categories. After falling nearly 28 percent in April, the index for oil and gas well drilling declined almost 37 percent further in May and was more than 63 percent below its year-earlier level. In addition, the index for crude oil extraction has fallen about 5 percent in each of the past two months.

Capacity utilization for manufacturing in May was 62.2 percent, 2.2 percentage points higher than in April but 1.5 percentage points below its recession trough of June 2009. The operating rate for durable manufacturing increased 3.1 percentage points in May to 57.1 percent but remained below its 2009 low. Capacity utilization for nondurables rose 1.4 percentage points to 68.5 percent, slightly below its 2009 low.

[1] The increase of 81.9 percent for automotive products in May was relative to a very low level in April, which suppressed its contribution to the growth in the index for consumer goods. A further explanation of the effect on aggregate growth rates from sharp changes in individual indexes is available on the Federal Reserve's website at https://www.federalreserve.gov/releases/g17/g17_technical_qa.htm#rateofchangecalculation.
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Revision of Industrial Production and Capacity Utilization

The Federal Reserve Board plans to issue its annual revision to the indexes of industrial production (IP) and the related measures of capacity utilization in the second half of 2020. New annual benchmark data for manufacturing for 2017 and 2018 will be incorporated, as well as other annual data, including information on the mining of metallic and nonmetallic minerals (except fuels). The weights for market-group splits of the industry-level indexes will be updated with information from the 2012 benchmark input-output accounts from the U.S. Bureau of Economic Analysis. 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 for manufacturing through the fourth quarter of 2019 from the U.S. Census Bureau's Quarterly Survey of Plant Capacity Utilization, 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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Last Update: June 16, 2020