INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION
Industrial production edged down 0.1 percent in October, held down by a 3.4 percent drop in the output of utilities. Utility output, which had been at elevated levels over the summer, fell back as temperatures returned to more normal levels. Manufacturing output bounced back 0.3 percent, regaining only some of the 0.6 percent loss in September. At 128.3 of its 1992 average, industrial production in October was 1.4 percent higher than it was in October 1997. Capacity utilization fell 0.4 percentage point, to 80.6 percent, 1-1/2 percentage points below its 1967-97 average.
INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION: SUMMARY
Seasonally adjusted
| Index, 1992=100 | Percent change
| 1998 | 1998 | Oct. 97 to
Industrial Production | July Aug. Sept. Oct. | July Aug. Sept. Oct. | Oct. 98
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| | |
Total index | 127.2 129.1 128.4 128.3 | -.2 1.5 -.5 -.1 | 1.4
Previous estimates | 127.0 129.0 128.7 | -.4 1.6 -.3 |
| | |
Major market groups: | | |
Products, total | 120.7 122.7 121.8 121.6 | -.4 1.7 -.8 -.2 | 1.2
Consumer goods | 114.4 116.3 115.4 115.2 | -.8 1.7 -.8 -.1 | -.6
Business equipment | 149.3 154.5 153.3 153.6 | -.9 3.5 -.8 .2 | 5.5
Construction supplies | 128.0 129.1 127.5 128.0 | 1.2 .9 -1.2 .4 | 5.6
Materials | 137.6 139.2 139.1 139.0 | .0 1.2 -.1 .0 | 1.7
| | |
Major industry groups: | | |
Manufacturing | 129.6 131.8 131.0 131.4 | -.3 1.7 -.6 .3 | 1.8
Durable | 146.4 152.3 150.9 151.8 | -.8 4.0 -.9 .6 | 4.3
Nondurable | 112.3 111.3 110.9 110.9 | .3 -.9 -.3 -.1 | -1.2
Mining | 106.3 105.9 104.8 103.6 | .2 -.4 -1.0 -1.1 | -2.1
Utilities | 118.5 118.9 120.7 116.6 | -.1 .4 1.5 -3.4 | -.2
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| | Capacity
| Percent of Capacity | Growth
| Average 1982 1988-89 1997 | 1998 | Oct. 97 to
Capacity Utilization | 1967-97 Low High Oct. | July Aug. Sept. Oct. | Oct. 98
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| | |
Total industry | 82.1 71.1 85.4 83.0 | 80.7 81.7 81.0 80.6 | 4.4
Previous estimates | | 80.6 81.6 81.1 |
| | |
Manufacturing | 81.1 69.0 85.7 81.9 | 79.2 80.3 79.5 79.4 | 5.0
Advanced processing | 80.5 70.4 84.2 80.2 | 77.0 78.7 77.9 77.9 | 5.8
Primary processing | 82.4 66.2 88.9 85.7 | 84.3 83.9 83.0 82.8 | 3.1
Mining | 87.5 80.3 88.0 89.6 | 89.5 89.0 88.0 86.9 | .9
Utilities | 87.3 75.9 92.6 92.0 | 92.6 92.9 94.2 90.9 | 1.0
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Note: Estimates for October are preliminary. Estimates from July to September are revised.
Market Groups
The output of consumer goods edged down 0.1 percent in October after having dropped a downward-revised 0.8 percent in September. The production of durable consumer goods in October was buoyed by a 2.9 percent increase in automotive products as well as an increase in appliances that recovered a bit of September's 7 percent loss. The output of nondurable goods (excluding energy for consumers) was unchanged in October; consumer energy products fell 3.7 percent, a drop that reflected lower residential demand for electricity.
The production of business equipment edged up in October, with another drop in the output of industrial equipment offset by increases in information processing equipment and motor vehicles. The production of farm equipment fell again and is down almost 6 percent from a year ago. Commercial aircraft production, which had been nearly flat at a high level during the first part of the year, rose again last month.
The output of construction supplies increased 0.4 percent, regaining some of its September loss. Production in this category had climbed rapidly between December of last year and August, buoyed by the strength in homebuilding activity. The production of materials has been nearly flat over the past two months. The production of basic metals fell again after having dropped nearly 3 percent in September; iron and steel production has tumbled more than 8 percent over the past two months. In contrast, production of semiconductors and other electronic components picked up noticeably in October; semiconductor output had decelerated earlier this year, and October's increase is the largest since January.
Industry Groups
Manufacturing output increased 0.3 percent in October after having dropped 0.6 percent in September. An increase in motor vehicle assemblies from 12.7 million units (annual rate) in September to 13 million units (annual rate) in October accounted for part of the gain. But increases were fairly widespread within other durable goods industries, especially furniture, fabricated metal products, computers, and semiconductors. A notable exception was the iron and steel industry in which output fell again in October after having contracted sharply in September. The recent weakness in nondurables-- production has fallen almost 1-1/2 percent in the past three months-- has been widespread, including the apparel, chemical, paper, and petroleum industries. In October, mining production declined for the third straight month, pulled down by decreased oil and gas drilling and extraction resulting from weak crude oil prices.
The factory operating rate fell 0.1 percentage point in October, to 79.4 percent--more than 2-1/2 percentage points below the level it had reached in January. Utilization rates for both primary- and advanced-processing industries have fallen this year. Industries that have experienced especially large declines include primary metals, petroleum products, and mining.
Revision of Industrial Production and Capacity Utilization
On November 24, the Federal Reserve will publish revisions to
its measures of industrial production (IP), capacity, capacity
utilization, and industrial use of electric power. The revisions will
begin with 1992 and will incorporate updated source data for more
recent years.
This regular updating of source data for IP will include
annual data from the Bureau of the Census's 1996 Annual Survey of
Manufactures and from selected editions of its 1997 Current Industrial
Reports. Annual data from the Department of the Interior on metallic
and nonmetallic minerals (except fuels) for 1996 and 1997 will also be
introduced. The updating will also include revisions to the monthly
indicators for each industry (physical product data, production-worker
hours, or electric power usage) and revised seasonal factors. In
addition, the revision will introduce improved measures of production
for semiconductors, coal, lawn and garden equipment, and aircraft.
Capacity and capacity utilization will be revised to
incorporate preliminary data from the Census Bureau's 1997 Survey of
Plant Capacity. The statistics on the industrial use of electric
power will incorporate more complete reports received from utilities
for the past few years as well as data from the 1996 Annual Survey of
Manufactures.
Once the revision is published, the revised data will be
available on the the Board's web site,
http://www.federalreserve.gov/releases/g17, and on diskettes from
Publications Services (telephone 202-452-3245). The revised data will
also be available through the Economic Bulletin Board of the
Department of Commerce; for information about the Bulletin Board, call
202-482-1986. Further information on these revisions is available
from the Board's Industrial Output Section (telephone 202-452-3197).
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