Industrial Production and Capacity Utilization: The 2021 Annual Revision PDF  ASCII RSS DDP

Release Date: May 28, 2021

The Federal Reserve has revised its index of industrial production (IP) and the related measures of capacity and capacity utilization. The most prominent features of the revision are an update of the base year to 2017 for the indexes, a conversion of the industry-group indexes to the 2017 North American Industry Classification System (NAICS), the incorporation of comprehensive annual production data for 2017 through 2019, and the incorporation of new survey utilization rate data for 2019 and 2020.[1]

On net, the revisions to total IP for recent years are negative. Notably, the updated rates of change are 1 to 1-1/2 percentage points lower per year from 2017 through 2019.[2] The cumulative effect of these revisions leaves the level of total IP in April 2021 about 3-1/2 percent below its late-2007 peak before the Great Recession; previously, total IP in April 2021 was slightly above its peak before the Great Recession. The incorporation of detailed data for manufacturing from the U.S. Census Bureau's 2017 Economic Census (EC) and the 2018 and 2019 Annual Surveys of Manufactures (ASMs) accounts for the majority of the differences between the current and the previously published estimates. The revisions to the rates of change for 2020 are small, and the magnitude of the sharp drop (17 percent) in total IP at the onset of the pandemic in early 2020 is very similar to the magnitude reported earlier.

Annual capacity growth is revised down about 1 percentage point, on average, from 2017 to 2019 and is little changed in 2020. After these revisions, capacity for total industry is estimated to have grown about 3 percent less between 2016 and the end of 2020 than previously estimated.

In the fourth quarter of 2020, capacity utilization for total industry stood at 73.4 percent, about 1/2 percentage point below its previous estimate and about 6-1/4 percentage points below its long-run (1972–2020) average. The utilization rate for 2019 is also about 1/2 percentage point lower than the previous estimate, but revisions to utilization rates for 2017 and 2018 are very small.

This revision incorporated newly available annual data on both output and prices. As noted earlier, the updated IP indexes incorporated new data for manufacturing from the U.S. Census Bureau's 2017 EC and the 2018 and 2019 ASMs. For publishing, the IP indexes folded in data for 2017 from the EC and data for 2018 and 2019 from the Census Bureau's Service Annual Survey. The IP index for logging is based on special calculations provided by the U.S. Forest Service that extended previously published data; the IP index incorporated new data for 2018 and 2019 and revised data for 2016 and 2017. In addition, the indexes for metallic and nonmetallic minerals were updated with revised annual data for 2015 through 2017 and with new data for 2018 and 2019 from the U.S. Geological Survey (USGS). Data on prices from the Bureau of Labor Statistics (BLS) were also incorporated into most of the manufacturing indexes.

The monthly estimates of production have been updated to include late-arriving or revised quarterly or monthly indicator data, including information from the BLS's benchmark revisions to the Current Employment Statistics. The monthly IP estimates reflect updated seasonal factors.

The revised estimates of capacity and capacity utilization incorporated data from the Census Bureau's Quarterly Survey of Plant Capacity Utilization (QSPC) for the fourth quarters of 2019 and 2020 along with new data on capacity from the USGS, the Energy Information Administration, and other organizations. The revised capacity estimates also included new data on capital spending from the 2017 EC and the 2018 and 2019 ASMs.


Industrial Production

Manufacturing output is now estimated to have risen about 1-1/4 percent in 2017 and about 3/4 percent in 2018 before falling back about 2-1/2 percent in 2019 and in 2020. The gains in factory output for 2017 and 2018 are now both estimated to be smaller than reported earlier, the fall in 2019 is now reported to be steeper, and the net decline over the course of 2020 is about the same as previously estimated. The cumulative effect of these revisions leaves manufacturing IP in April 2021 about 10 percent below its peak before the Great Recession, a difference that is about 4 percentage points larger than reported earlier.

The contour for mining output shows sharp gains in 2017 and 2018, little change in 2019, and a precipitous drop in 2020. Relative to earlier estimates, the rates of change in 2017 and 2018 are a bit stronger, whereas the estimates for 2019 and 2020 are lower by about 2 and 3 percentage points, respectively. The rates of change for utilities output are little changed by the revision.

Production by Industry Group

The output of durable goods manufacturers is now reported to have increased solidly in 2017 and 2018 before falling back in 2019 and 2020. Relative to the previous estimates, the gain in the index in 2017 is about the same, and the gain in 2018 is smaller; the drop in 2019 is now steeper, whereas the decline in 2020 is more gradual. The downward revisions for 2018 and 2019 are broadly based across durable goods industries, as is the upward revision for 2020.

The contour of the index for nondurables now shows a notable decline between 2016 and 2020; previously the index showed a net gain over this period. The rates of change are now lower in each year in the 2016–2020 period. In particular, nondurables production is now reported to have edged down in 2017, whereas it was estimated earlier to have posted a sizable gain. Within nondurables, the revisions to the rates of change were mixed, but a few indexes—principally food, beverage, and tobacco products and chemicals—had large downward revisions.

The output index for industries in scope for manufacturing IP that are not part of manufacturing under the NAICS—that is, logging and publishing—has been recording declines for several years, and it continued to fall each year in the 2017–2020 period. However, the declines are now reported to have generally been smaller in each year, particularly in 2018, than previously published.

Production by Market Group

The index for consumer goods now shows a modest net decline between 2016 and 2019, whereas it was previously reported to have increased somewhat; the index now falls a bit more in 2020 than published earlier. The rate of change for business equipment is revised up in 2017 and then revised down notably for 2018 through 2020. There are downward revisions to the rates of change for most recent years in both construction supplies and business supplies. Relative to earlier reports, the index for materials increased less in 2017 and 2018, and it decreased more in 2019; the decline in 2020 is little changed. On net, there are downward revisions for both the energy and non-energy components.


Total industrial capacity rose modestly, on net, between 2017 and 2020, driven by increases in capacity for both mining and utilities; the overall gain in this period is significantly smaller than published earlier. Notably, capacity is now reported to have declined about 1 percent in 2017, whereas it was previously reported to have increased by about the same amount. Capacity grew about 1-1/2 percent in 2019, was unchanged in 2020, and is expected to increase about 1/2 percent in 2021.

Manufacturing capacity is now reported to have contracted close to 1/2 percent per year, on average, from 2017 to 2020, with a particularly sizable contraction in 2017. The new contour contrasts with the previous path, which showed a considerable net gain over the 2017–2020 period. Downward revisions to capacity growth are widespread across durable and nondurable manufacturing industries. The one exception is transportation equipment, for which capacity growth revised upward.

Capacity at mines rose from 2017 to 2020, though by somewhat less than what was previously published, as a result of lower capacity increases in oil and gas mining. Relative to earlier reports, the growth in mining capacity was significantly smaller in 2018 and significantly higher in 2019. For 2020, capacity at mines is now reported to have expanded modestly; previously, it was reported to have contracted. The capacity measures for both electric and gas utilities are now reported to have increased more slowly between 2017 and 2020 than stated earlier.

Capacity Utilization

Capacity utilization for total industry rose in 2017 and 2018 but decreased in 2019 and 2020.[3] The recent declines resulted from a substantial reduction in the operating rate for mining and from smaller reductions in the rates for both manufacturing and utilities. Compared with earlier estimates, capacity utilization for total industry is now reported to have been about 1/2 percentage point lower for 2019 and 2020 and little changed in earlier years.

Utilization at manufacturers rose in 2017 and 2018 and then moved down in 2019 and 2020. The current readings for manufacturing utilization are noticeably higher for 2017 through 2020, as capacity revised down by more than output. Manufacturing utilization moved down 1-1/2 percentage points during 2020, leaving the utilization rate for the fourth quarter of 2020 about 4-1/4 percentage points below its long-run average. Within manufacturing, upward revisions to utilization rates are fairly widespread in both nondurables and durables, though the operating rate in the motor vehicle industry revised down noticeably.

The utilization rate for durable manufacturing was above its long-run average in 2018 but retreated to about 73 percent in the fourth quarter of 2020, 3-1/2 percentage points below its long-run average. Of the 10 major categories of durables, only 3 recorded operating rates in the fourth quarter of 2020 that were above their long-run averages. The utilization rate for nondurable manufacturing was 75.5 percent at the end of 2020, almost 4-1/2 percentage points below its long-run average. As of the fourth quarter of 2020, the operating rate for each major nondurable manufacturing industry group was below its industry-specific long-run average.

The capacity utilization rate for mining declined sharply in 2019 and 2020 as operating rates moved down throughout the sector. Relative to its previously published rate, utilization at mines for the fourth quarter of 2020 is about 9 percentage points lower, reflecting both lower production growth and higher capacity growth. At the end of 2020, the utilization rate for mining was 16.6 percentage points below its long-run average of 86.2 percent. Apart from 2018, the sector has been operating below its long-run average utilization since 2014. The operating rate for utilities has been well below its long-run average of 85.0 percent since 2008 and stood at 73.4 percent in the fourth quarter of 2020.


The IP indexes represent the level of real output relative to a base year. At the monthly frequency, movements of the indexes are based on indicators that are derived using industry-specific data from a variety of government and private sources.

The monthly production indexes are anchored to annual benchmarks that are less timely but typically based on more comprehensive data. In most cases, the annual benchmark is nominal gross output reported by the Census Bureau deflated by a suitable price index.

Annual revisions to the IP and capacity measures generally involve (1) incorporating new and revised annual benchmark data on output, prices, and value-added proportions; (2) incorporating new monthly or quarterly data that were revised or that arrived too late to be included in the regular six-month reporting window for monthly IP; (3) updating seasonal adjustment factors; (4) updating the methods used to construct the indexes; and (5) introducing changes to the industry- or market-group structure of the indexes based on changes to underlying data sources.

The current annual revision includes more innovations and updates than are typical. In particular, the current revision updates the base year of the index from 2012 to 2017, reclassifies the IP and capacity indexes from the 2012 North American Industry Classification System (NAICS) to the 2017 NAICS, updates the aggregation weights for some IP indexes to incorporate data on product shipments based on the new North American Product Classification System (NAPCS), and updates the allocations of IP industry group indexes to market groups based on the Bureau of Economic Analysis's (BEA) 2012 input-output (I-O) tables (the previous allocations were based on I-O tables through 2007).

Annual Benchmark Data on Output, Prices, and Value-Added Proportions


The annual benchmark output indexes for IP are measures of real gross output at the six-digit NAICS (2017) level. The Census Bureau provides annual figures for value added and the cost of materials for manufacturing industries, which can be summed to obtain nominal gross output. The benchmark indexes for this revision incorporated information for 2017 from the Economic Census and new information for 2018 and 2019 from the Annual Survey of Manufactures (ASM).

New annual data were also incorporated into many other indexes not in the scope of the ASM. The benchmark indexes for metallic and nonmetallic mineral mining were updated with any newly available data from 2017 through 2019 from the USGS, and the benchmark indexes for logging and for publishing were advanced through 2019 based on data from the U.S. Forest Service and from the U.S. Census Bureau, respectively.


To obtain individual benchmarks of real gross output, the measures of nominal gross output are deflated by annual price deflators. In general, the benchmark industry price deflators consist of price indexes from the BEA through 2011 that are extended through 2019 with the related producer price indexes (PPIs) from the BLS.[4] However, for a few selected industries, the annual price deflators are constructed by the Federal Reserve.[5]

Value-Added Proportions (Weights for Aggregation)

The IP system is organized as a hierarchical structure where the individual production indexes are combined using a version of the Fisher-ideal index formula to construct broader measures of production. The weights that are used to combine individual IP measures into more aggregate measures are based on the value added from the industry, calculated as gross output less cost of materials. For IP indexes that are defined at the six-digit (or more aggregate) NAICS level, the value-added weights are derived from either the Economic Census or the ASM. For IP indexes that cover only part of a six-digit NAICS industry, the aggregation weights were constructed by allocating value added (as defined by the Census Bureau) for a six-digit industry across the various components of IP that compose that industry.

The allocation of value added across each component was determined by that component's share of the industry's overall product shipments. This annual revision used data on product shipments based on the new 2017 NAPCS. Previously, data on product shipments had a classification system based on NAICS and were included as part of the Census of Manufactures or Annual Survey of Manufactures. The new classification system is coded independently of NAICS, and a concordance was required to align the recent data with the historical data used to allocate weights across IP indexes for the period before 2017. Missing values for specific NAPCS-based products were imputed where necessary. The incorporation of NAPCS is discussed in more detail below.

The Federal Reserve derives estimates of value added for the electric and gas utility industries from annual revenue and expense data issued by other organizations. For electric utilities, the measures of value added incorporate data from the Energy Information Administration of the U.S. Department of Energy and from the Edison Electric Institute. For gas utilities, the value-added estimates incorporate data from the American Gas Association. The weights for aggregation for mining industries are derived from value-added data from the Economic Census. Figures for value added for mining industries in the years between the quinquennial Economic Censuses are estimated based on both output and price changes for the industry.

The weights for aggregation, expressed as value added per unit output, were estimated with data on producer prices for the period after 2019.

Conversion to the 2017 North American Industry Classification System

Industrial production and capacity utilization are structured to follow a single-industry classification system. With this revision, the industrial production and capacity indexes were classified according to the 2017 NAICS; previously, they were classified according to the 2012 NAICS. To maintain consistent time series, the indexes were converted to 2017 NAICS for the period from 1972 forward.

For the industrial sector, the differences between the 2012 and the 2017 NAICS were relatively minor. A few IP indexes were reclassified to reflect the new NAICS structure, but no individual indexes were dropped or added because of the new structure. The reclassifications within the IP system include the following:

Crude Petroleum and Natural Gas Extraction

The crude petroleum and natural gas extraction and the natural gas liquid extraction industries were reorganized under 2017 NAICS. In the 2012 system, crude petroleum and natural gas extraction were included together in NAICS 211111. Under the 2017 system, crude petroleum extraction is its own six-digit industry (NAICS 211120) and natural gas extraction is combined with natural gas liquid extraction (NAICS 211112 in the 2012 system) into NAICS 211130. This reorganization did not affect the number of individual IP indexes. Under both the 2012 and 2017 NAICS, the IP system included three indexes for different categories of crude oil extraction, one index for natural gas extraction, one index for propane, and one index for liquefied petroleum gas.

Lead, Zinc, Copper, and Nickel Ore Mining

Two 2012 NAICS categories, lead ore and zinc ore mining (NAICS 212231) and copper ore and nickel ore mining (NAICS 212234), were combined into a single 2017 NAICS category: copper, nickel, lead, and zinc mining (NAICS 212230). This consolidation did not affect the number of IP indexes, as the IP system maintained one index for copper ore and nickel ore mining and another index for lead ore and zinc ore mining under both 2012 NAICS and 2017 NAICS.

Household Appliance Manufacturing

A single 2017 NAICS six-digit industry for major household appliance manufacturing (NAICS 335220) was formed from four different six-digit industries under 2012 NAICS: Household cooking appliances manufacturing (NAICS 335221), household refrigerator and home freezer manufacturing (NAICS 335222), household laundry equipment manufacturing (NAICS 335224), and other major household appliance manufacturing (NAICS 335228). This consolidation did not affect the number of individual IP indexes, as the IP system still includes one index for each product type within the affected categories under both 2012 NAICS and 2017 NAICS.

Adoption of the North American Product Classification System

As noted earlier, this annual revision uses data on product shipments classified by NAPCS to construct annual benchmarks and value-added weights for those IP indexes that are defined as subsets of a given six-digit NAICS industry; previously, the benchmarks and aggregation weights for these indexes were based on an industry's NAICS-based product shipments as defined in Census Bureau annual surveys or censuses. The Census Bureau introduced NAPCS with the 2017 Economic Censuses and no longer published data on the earlier basis.

Unlike the previous classification system for product shipments, the NAPCS structure is independent from the NAICS structure. Under the previous system, each industry was associated with a unique set of products, and the codes for those products were extensions of the codes for their related six-digit industries.

For IP indexes that are more disaggregate than the six-digit NAICS level, the calculations for the benchmarks and value-added weights involve summing product shipments for all products associated with the particular IP index. Under the old system, these calculations were straightforward because the products were classified based on the primary producing industry. Under NAPCS, however, the process is considerably more complicated for a few reasons. First, as noted, the NAPCS structure is independent from NAICS, so a NAPCS-NAICS crosswalk was needed. Second, because NAPCS products may be produced across multiple industries and sectors, extra care was required to map the product to the appropriate IP index. Third, the non-nested structure of NAPCS and NAICS combined with numerous instances of nondisclosed data cells introduced an additional hurdle for imputations.

Updating Market Group Allocations

The IP market groups classify industrial output according to the expected use of the output. The categories of market groups are final products (consumer goods and equipment), intermediate products that are used as inputs outside of the industrial sector (construction and business supplies), and materials that are used as inputs within the industrial sector (materials). Most industries in the IP index have their output allocated to multiple market groups. For example, a large share of ice cream production is purchased by consumers, but a sizable share is also sold to restaurants and other businesses outside the industrial sector, and hence is part of business supplies. The market group shares for the individual IP indexes are derived using relationships in the I-O tables issued by the BEA.

This revision updates the market group assignments and shares based on the 2012 I-O tables. Previously, the market groups and weights had been based on the 1997, 2002, and 2007 versions of the tables. The incorporation of the 2012 I-O tables generally affected the market group shares beginning in 2008. The shares are assumed to evolve linearly between each I-O table year and to be constant beginning with the last available year for the I-O tables.

In general, the output of an industry is not split among all of the possible market groups, just those to which a significant share (roughly 10 percent or more) of its output is destined. The I-O tables reported that a few industries sent their output to markets in amounts that surpassed that threshold for the first time in 2012. For these industries, output was allocated to the newly important market in 2012 and later years, and output was also allocated to the market in previous years, with the shares for the earlier years reflecting the relatively smaller importance in the 1997, 2002, and 2007 I-O tables.

Revised Quarterly and Monthly Data

This revision incorporated source data on production, shipments, and inventories that became available or were revised after the regular six-month reporting window for monthly IP was closed. These data were released with too great of a lag to be included with monthly IP estimates but were available for inclusion in the annual revision.

Revised Seasonal Factors

Industrial production indexes are adjusted to remove from the underlying data the predictable movements related to timing, holiday, workday, and monthly or quarterly seasonal patterns. Individual indexes are adjusted using the Census X-13ARIMA-SEATS seasonal adjustment program. The seasonal factors are based on the full history of data back to 1972, where available.

Seasonal factors for indexes based on production-worker hours were updated with data through January 2021. The updated factors for the physical-product-based indexes used data through December 2020 where available. For IP indexes based on physical product data, the seasonal adjustment procedure treated the pandemic-influenced months from March 2020 through August 2020 as additive outliers. For IP indexes that use production-worker hours as their monthly indicator, the months from April 2020 through August 2020 were specified as additive outliers.

Since the last annual revision, the seasonal adjustment process has been updated for indexes based on production-worker hours. Certain calendar configurations relating to the number of weekend days in a month and the timing of the BLS's Current Employment Statistics survey (the source for the data on production-worker hours) appeared to produce small systematic effects on the estimates of total IP. As a remedy, an adjustment to allow for trading day effects was added to the X-13 models for those indexes based on production-worker hours.

Seasonal factors for unit motor vehicle assemblies have been updated, and projections through June 2022 are available on the Board's website at These factors are based on production data through January 2021 and were revised back to January 2015. The seasonal factors explicitly incorporate the holiday schedule for the vehicle assembly lines specified in the latest collective bargaining agreements with domestic manufacturers. The seasonal factors identify production data from March through May 2020 as outliers due to the pandemic recession.

Methodological Changes to Individual Production and Capacity Indexes

Change in Frequency of Source Data for Mattress Manufacturing and for Glass Container Manufacturing

The index for mattress manufacturing (NAICS 33791) is based on data on shipments from the International Sleep Products Association (ISPA). For many years, the ISPA reported data at a monthly frequency; these reports were converted to a quarterly frequency beginning with data for 2015. With this revision, the IP index for matresses was formally updated to reflect the quarterly data beginning in 2017.

The index for glass container manufacturing (NAICS 327213) is based on production of glass containers from the Glass Packaging Institute (GPI). The GPI issued data at a monthly frequency before transitioning to a quarterly frequency several years ago. With this revision, the IP index for glass containers was formally updated to reflect the quarterly data beginning in 2012.

Change in Source Data for Electric Lighting Equipment

With this revision, the index for electric lighting equipment (NAICS 3351) is now based on production-worker hours. For the period from 2002 through 2015, the index was based on physical product data from the National Electrical Manufacturers Association that have since been discontinued.

Consolidation of Individual Indexes for Communications Equipment

Communications equipment manufacturing (NAICS 3342) is covered by numerous individual IP indexes; although the individual indexes are included in the published total for communications equipment, they are not published separately. With this revision, three indexes span NAICS 3342: One index covers all of NAICS 33421, telephone apparatus; one index covers the portion of NAICS 33422 that includes wireless system equipment; and one index combines the remaining portion (predominantly radio and television broadcasting equipment and satellites) of NAICS 33422 with all of NAICS 33429, other communications equipment manufacturing. Previously, six individual indexes covered NAICS 3342. The source data for all indexes for communications equipment come from the U.S. Census Bureau's Quarterly Survey of Plant Capacity Utilization.

Data Availability and Publication Changes

Files containing the revised data and the text and tables from this release are available on the Board's website at, as are updated data for the annual revision and for all of the regularly issued series on IP, capacity, and capacity utilization. Other changes are listed on the Board's website at

[1] The revision affected rates of change for IP from 1972 forward. When necessary to maintain consistency with any revisions to the data for 1972 and subsequent years, the levels of production for the years before 1972 were multiplied by a constant. However, the rates of change in IP for the years before 1972 were not revised. Utilization rates and capacity growth rates were revised minimally between 1968 and 1971 but were unchanged before then.
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[2] Rates of change are calculated as the percentage change in the seasonally adjusted index from the fourth quarter of the previous year to the fourth quarter of the year specified.
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[3] Unless otherwise noted, rates of capacity utilization are reported for the fourth quarter of the reference year.
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[4] The BEA price deflators were discontinued at the six-digit NAICS level after 2011. Overall, at the industry level, the BEA and PPI measures are quite similar, as the BEA used weighted product-level PPIs to derive its industry-level shipments deflator.
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[5] For selected industries, the Federal Reserve constructs price indexes from alternative sources. These industries include communications equipment (NAICS 3342), computer storage devices (NAICS 334112), semiconductors (NAICS 334413), and pharmaceuticals (NAICS 325412). Updated price indexes for data storage devices and for selected components of communications equipment will be available on the Board's website at
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G.17 Revision Release Tables:

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Last Update: May 28, 2021