INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION
[2005 Revision Notice Below]

Industrial production increased 0.7 percent in November after an upward-revised gain of 1.3 percent in October. Further recoveries in petrochemical and energy-related industries affected by the hurricanes again contributed significantly to the increase in output in November. The upward revisions to the October production estimates were widespread. The largest contributor to the revision was the index for air conditioners, which was higher than previously estimated. Another notable upward revision was in the estimate of production of manufactured homes.

At 109.0 percent of its 2002 average, output in November was 2.8 percent above its year-ago level. Manufacturing output moved up 0.3 percent in November after an increase of 1.8 percent in October. The output at mines surged 4.8 percent in November after having fallen in the previous four months, and the output at utilities rose 0.3 percent. Capacity utilization for total industry increased to 80.2 percent, a rate 0.8 percentage point below its 1972-2004 average.

INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION: SUMMARY
Seasonally adjusted

Industrial production	2002=100				Percent change
	2005				2005				Nov. '04 to Nov. '05
	Aug.	Sept.	Oct.	Nov.	Aug.	Sept.	Oct.	Nov.
Total index	108.6	106.9	108.2	109.0	.3	-1.6	1.3	.7	2.8
Previous estimates	108.5	106.9	107.9		.2	-1.5	.9
Major market groups
Final Products	110.0	109.1	111.2	110.7	.3	-.8	1.9	-.4	4.0
Consumer goods	105.6	106.1	105.9	105.1	.4	.4	-.1	-.8	1.4
Business equipment	120.1	115.0	123.5	124.6	.1	-4.2	7.3	1.0	10.4
Nonindustrial supplies	108.0	108.0	108.9	109.7	.5	.0	.8	.7	4.2
Construction	108.2	109.6	112.2	112.8	.6	1.3	2.3	.5	6.7
Materials	107.4	104.2	105.0	106.9	.2	-3.0	.8	1.8	1.0
Major industry groups
Manufacturing (see note below)	109.5	108.8	110.8	111.1	.4	-.7	1.8	.3	3.9
Previous estimates	109.6	108.8	110.4		.4	-.7	1.4
Mining	99.2	89.7	89.5	93.8	-.6	-9.6	-.2	4.8	-6.1
Utilities	108.4	106.7	104.5	104.8	.3	-1.6	-2.0	.3	1.8

Market Groups

The production of consumer goods fell 0.8 percent in November. The output of consumer durables dropped 2.9 percent, largely as a result of a steep decrease in the output of automotive products. The index of consumer nondurables edged up 0.1 percent, as an increase in the energy component more than offset a decline in non-energy nondurable goods. Within non-energy nondurables, the output of clothing posted a gain of 0.9 percent and partially reversed the decline in October. All other categories of non-energy nondurables declined in November.

The production of business equipment moved up 1.0 percent, and gains in this sector were widespread. The index for industrial and other equipment moved up 0.7 percent, and the index for information processing equipment advanced 1.3 percent. The output of transit equipment increased 1.1 percent and was nearly 13 percent higher than its year-ago level. The production of defense and space equipment dropped 0.5 percent after an increase in October. A strike in the guided missiles and space vehicles industry more than accounted for the decrease in November. The index for construction supplies posted another gain in November; the increases were concentrated in industries that may have benefited from rebuilding efforts in the wake of this year�s major hurricanes. The output of business supplies moved up 0.7 percent.

The production of materials increased 1.8 percent. The index for energy materials jumped 3.8 percent, and the index for non-energy materials increased 1.1 percent. Within the durable materials component, a drop of 2.2 percent in the output of consumer parts partially offset gains in the production indexes for other durable materials. The production of equipment parts rose 2.1 percent in November, a move reflecting continued gains in the output of semiconductors and computer parts. Within the nondurable category, the output of textiles was unchanged, and the production of paper materials decreased. The output of chemical materials, which had fallen sharply in September because of the hurricanes, continued to recover and posted an increase of 5.1 percent.

Industry Groups

Manufacturing production moved up in November, and the factory operating rate held steady at 79.4 percent. Within the durable goods category, which recorded a 0.2 percent decrease, the production of motor vehicles and parts fell 4.8 percent. The indexes for wood products, fabricated metal products, furniture and related products, and miscellaneous goods also posted declines, but production rose noticeably in primary metals, nonmetallic mineral products, computer and electronic products, and aerospace and miscellaneous transportation equipment. The production of nondurable goods rose 1.1 percent, its second consecutive monthly increase. The output of petroleum and coal products jumped 5.8 percent, its first gain in five months. Apparel and leather rose 1.0 percent, but this index was down 1.9 percent over the past twelve months. The production of non-NAICS manufacturing (logging and publishing) decreased 0.8 percent.

The output of mines shot up 4.8 percent in November; the operating rate in mining moved up 3.8 percentage points, to 83.8 percent. Oil and gas extraction moved up substantially but remained more than 8 percent below its level preceding Hurricane Katrina. Increases in the output of both electric and natural gas utilities contributed to a gain of 0.3 percent in utilities output; the operating rate at utilities rose to 85.4 percent.

By stage of process, capacity utilization for industries in the crude stage of processing jumped 4.1 percentage points, to 82.6 percent, but the rate was still more than 5 percentage points below its average rate in the first half of this year. Capacity utilization for industries in the primary and semifinished stages increased 0.2 percentage point, to 82.1 percent, while the utilization rate for finished goods producers declined 0.4 percentage point, to 77.7 percent. Capacity utilization rates for the primary and semifinished stages and for the finished stage were just below their respective long-run averages.

NOTE: This release includes the results from the final survey of industrial electric power use to be conducted by the Federal Reserve Board. The rate of response to the voluntary survey had dropped significantly since the early 1990s, with coverage in 2004 nearly 40 percent lower than at its peak in 1993. A notice seeking comment on the termination of the electric power survey was published in the Federal Register on September 29, 2005; by the end of the public comment period, November 28, 2005, no comments had been received. Although the indexes of electric power use will no longer be updated, the historical indexes will remain available on the historical data page for the G.17.

Until November 2005, calculation of the monthly production indexes for twenty industries had relied on measures of their electric power use. On November 7, the Federal Reserve substituted production-worker hours for electric power use in these twenty industries for the period 1997 to the present.

Revision of Industrial Production and Capacity Utilization

On November 7, 2005, the Federal Reserve Board issued its annual revisions to the index of industrial production (IP) and to the related measures of capacity and capacity utilization. The base year for the indexes of industrial production, capacity, and electric power use was advanced to 2002.

The revisions to the IP index were principally derived from information contained in annual reports issued by the Census Bureau--namely, the 2003 Annual Survey of Manufactures, the revised data from the 2002 Census of Manufactures, and selected 2004 Current Industrial Reports. Annual data on minerals (except fuels) for 2003 and 2004 from the U.S. Geological Survey and updated deflators from the Bureau of Economic Analysis were also introduced. The updating also included revisions to the monthly indicator for each industry (either physical product data or production-worker hours) and revisions to seasonal factors.

Capacity and capacity utilization were revised to incorporate data from the Census Bureau�s 2004 Survey of Plant Capacity, which covers manufacturing, along with new data on capacity from the U.S. Geological Survey, the U.S. Department of Energy, and other organizations.

The revision is available on the Board�s website at www.federalreserve.gov/releases/G17. The revised data are also available on the website of the Department of Commerce. Further information on these revisions is available from the Board�s Industrial Output Section (telephone 202-452-3197).

NOTE: The statistics in this release cover output, capacity, and capacity utilization in the U.S. industrial sector, which is defined by the Federal Reserve to comprise manufacturing, mining, and electric and gas utilities. Mining is defined as all industries in sector 21 of the North American Industry Classification System (NAICS); electric and gas utilities are those in NAICS sectors 2211 and 2212. Manufacturing comprises NAICS manufacturing industries (sector 31-33) plus the logging industry and the newspaper, periodical, book, and directory publishing industries. Logging and publishing are classified elsewhere in NAICS (under agriculture and information respectively), but historically they were considered to be manufacturing and were included in the industrial sector under the Standard Industrial Classification (SIC) system. In December 2002 the Federal Reserve reclassified all its industrial output data from the SIC system to NAICS.

G.17 Release Tables:

Ascii	Screen reader	Summary: Industrial Production and Capacity Utilization
Chart		Chart 1: Industrial Production, Capacity, and Capacity Utilization
Chart		Chart 2: Industrial Production and Capacity Utilization
Chart		Chart 3: Industrial Production and Capacity Utilization, High Technology Industries
Ascii	Screen reader	Table 1: Industrial Production: Market and Industry Groups (percent change)
Ascii	Screen reader	Table 2: Industrial Production: Special Aggregates and Selected Detail (percent change)
Ascii	Screen reader	Table 3: Motor Vehicle Assemblies
Ascii	Screen reader	Table 4: Industrial Production Indexes: Market and Industry Group Summary
Ascii	Screen reader	Table 5: Industrial Production Indexes: Special Aggregates
Ascii	Screen reader	Table 6: Diffusion Indexes of Industrial Production
Ascii	Screen reader	Table 7: Capacity Utilization: Manufacturing, Mining, and Utilities
Ascii	Screen reader	Table 8: Industrial Capacity: Manufacturing, Mining, and Utilities (percent change)
Ascii	Screen reader	Table 9: Industrial Production: Gross Value of Products and Nonindustrial Supplies
Ascii	Screen reader	Table 10: Gross-Value-Weighted Industrial Production: Stage-of-Process Groups
Ascii	Screen reader	Table 11: Electric Power Use: Manufacturing and Mining
Ascii	Screen reader	Table 12: Historical Statistics for IP, Capacity, and Utilization: Total Industry
Ascii	Screen reader	Table 13: Historical Statistics for IP, Capacity, and Utilization: Manufacturing
Ascii	Screen reader	Table 14: Historical Statistics for IP, Capacity, and Utilization: Total Industry excluding Selected High-Technology Industries
Ascii	Screen reader	Table 15: Historical Statistics for IP, Capacity, and Utilization: Manufacturing excluding Selected High-Technology Industries

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