Industrial Production and Capacity Utilization - G.17

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Industrial production expanded 0.7 percent in October after having declined 0.1 percent in September. Previously, industrial production was reported to have gained 0.2 percent in September; most of this revision resulted from lower estimated output for mining. Factory output increased 0.5 percent in October after having risen 0.3 percent in September. Production at mines climbed 2.3 percent in October, while the output of utilities edged down 0.1 percent. At 94.7 percent of its 2007 average, total industrial production for October was 3.9 percent above its year-earlier level. Capacity utilization for total industry stepped up to 77.8 percent, a rate 2.1 percentage points above its level from a year earlier but 2.6 percentage points below its long-run (1972--2010) average.

Industrial Production and Capacity Utilization: Summary

Market Groups

The output of consumer goods increased 0.5 percent in October. The production of durable consumer goods strengthened 2.1 percent, primarily owing to a jump in the output of automotive products. The production indexes for home electronics and for appliances, furniture, and carpeting also rose, while the output of miscellaneous goods fell slightly. The production of nondurable consumer goods was unchanged, as a contraction in the output of consumer energy products offset a pickup in the production of other nondurable consumer goods. The gain for non-energy nondurables reflected higher output for each of its major categories except paper products.

In October, the output of business equipment moved up 1.0 percent and was 10.2 percent above its year-earlier level. The index for transit equipment climbed 3.0 percent in October and has increased 22.2 percent over the past 12 months. The index for information processing equipment advanced 1.0 percent in October, its fourth consecutive monthly gain of 1.0 percent or more. The production of industrial and other equipment was unchanged in October but has risen 6.5 percent over the past 12 months.

The production of defense and space equipment increased 0.9 percent in October after having edged down 0.1 percent in September.

The index for construction supplies was up 0.1 percent in October and was little changed, on net, over the past three months. The output of business supplies slipped 0.1 percent in October, its third consecutive monthly decline. The decreases over recent months primarily reflected lower output of commercial energy products; the output of non-energy business supplies increased slightly in both September and October and edged down in August.

The index for materials to be further processed in the industrial sector gained 0.9 percent in October, which more than reversed its losses over the previous two months. The output of durable materials increased 0.4 percent last month and was up 6.4 percent from a year earlier. In October, among the major categories of durable materials, consumer parts slipped 0.2 percent, equipment parts advanced 0.7 percent, and other durable materials moved up 0.3 percent. The production of nondurable materials increased 0.3 percent; both textile and paper materials declined, while chemical materials edged up and other nondurable materials rose briskly. The output of energy materials climbed 1.9 percent and more than reversed its September decrease.

Industry Groups

Manufacturing output increased 0.5 percent in October and was 4.1 percent above its year-earlier level. In October, the factory operating rate moved up to 75.4 percent, a rate 11.0 percentage points above its trough in June 2009 but still 3.6 percentage points below its long-run average.

The output of durable goods increased 0.8 percent in October and has gained 7.8 percent in the past 12 months. Advances of at least 2 percent were reported in October for electrical equipment, appliances, and components; motor vehicles and parts; and aerospace and miscellaneous transportation equipment. In contrast, losses of 2 percent or more occurred for wood products and nonmetallic mineral products.

The index for nondurable manufacturing rose 0.2 percent in October. Among the major components of nondurables, the output of apparel and leather jumped 2.8 percent, and gains were also registered for food, beverage, and tobacco products; chemicals; and plastics and rubber products. Decreases were recorded for textile and product mills, paper, printing, and petroleum and coal products. The index for other manufacturing (non-NAICS), which consists of publishing and logging, declined 0.2 percent.

The output of mines climbed 2.3 percent in October, with gains in each of its major components, after having dipped 0.5 percent in September. Capacity utilization in mining moved up to 92.7 percent in October, a rate 5.3 percentage points above its long-run average. The output of utilities edged down 0.1 percent, and its operating rate declined to 77.5 percent, a rate 9.1 percentage points below its long-run average.

Capacity utilization rates in October at industries by stage of process were as follows: At the crude stage, utilization increased 1.5 percentage points to 89.9 percent, a rate 3.5 percentage points above its long-run average; at the primary and semifinished stages, utilization edged down 0.1 percentage point to 74.0 percent, a rate 7.3 percentage points below its long-run average; and at the finished stage, utilization rose 0.7 percentage point to 77.2 percent, a rate 0.1 percentage point below its long-run average.

Revision of Industrial Production and Capacity Utilization

The Federal Reserve Board plans to issue its annual revision to the index of industrial production (IP) and the related measures of capacity utilization in late March 2012. The revised IP indexes will incorporate detailed data from the 2010 Annual Survey of Manufactures, conducted by the U.S. Census Bureau. Annual data from the U.S. Geological Survey regarding metallic and nonmetallic minerals (except fuels) for 2010 will also be incorporated. The update 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 through the fourth quarter of 2011 from the Census Bureau's Quarterly Survey of Plant Capacity, which covers manufacturing, along with new data on capacity from the U.S. Geological Survey, the Department of Energy, and other organizations.

Once the revision is published, it will be available on the Board's website at www.federalreserve.gov/releases/G17. Further information on the revision can be obtained from the Board's Industrial Output Section (telephone number 202-452-3197).

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