INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION
Industrial production was unchanged in January as warmer than average weather led to a 4.0 percent drop in the output of utilities. Production in the manufacturing sector, moderating from the strong pace seen last fall and summer, grew 0.4 percent in December and 0.3 percent in January. Another decline in motor vehicle production slightly retarded the overall gain in factory output in January, but motor vehicle output remained at a high level. At 127.9 percent of its 1992 average, total industrial production in January was 5.5 percent higher than it was in January 1997. The rate of industrial capacity utilization edged down to 83.0 percent, still above its long-term average of 82.1 percent.
The output of consumer goods was little changed for a second consecutive month. Within the durables sector, automotive products fell back for the second consecutive month; the output of other durable consumer goods, especially appliances, rose sharply after being little changed in December. The production of nondurable consumer goods slipped 0.2 percent, reversing the December increase. A sharp drop in the residential use of utilities in January outweighed the increase in the output of non-energy nondurable consumer goods.
The growth in output of business equipment moderated recently; the rise of 0.2 percent in each of the past two months was well below the pace seen during most of 1997. The output of computers and commercial aircraft rose strongly, while output retreated for other major business equipment components, most notably industrial equipment.
The production of construction supplies increased further in January after a healthy gain in the fourth quarter of last year. The output of materials was flat in January, as moderate increases in durable and nondurable goods materials were offset by a weather-related pullback in energy materials. Among durable goods materials, the output of parts for high-technology equipment and for aircraft continued to increase rapidly; the output of parts for consumer goods, particularly for motor vehicles, declined. Among nondurable goods materials, the output of paper increased, while production in most other major groups was little changed.
Posting more moderate gains than those of last summer and fall, factories increased their output 0.4 percent in December and 0.3 percent in January. The output of durables rose just 0.3 percent as strong increases in computer and office equipment, aircraft, and electrical machinery were partially offset by a decrease in motor vehicles and parts. The production of nondurables edged up 0.2 percent; strong gains in foods, textiles, and petroleum products were nearly matched by decreases in a number of other industries.
Capacity utilization for manufacturing edged down to 82.1 percent. Utilization in advanced-processing industries decreased 0.2 percentage point to a level still around its long-run average. The operating rate in primary-processing industries was unchanged, remaining 3.7 percentage points above its long-run average.
G.17 Release Tables: