Industrial Production and Capacity Utilization - G.17
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Industrial production increased 0.5 percent in March after moving up 0.1 percent in February. The increase in March was more than accounted for by a jump of 8.6 percent in the output of utilities—the largest in the history of the index—as the demand for heating returned to seasonal norms after being suppressed by unusually warm weather in February. Manufacturing output fell 0.4 percent in March, led by a large step-down in the production of motor vehicles and parts; factory output aside from motor vehicles and parts moved down 0.2 percent. The production at mines edged up 0.1 percent. For the first quarter as a whole, industrial production rose at an annual rate of 1.5 percent. At 104.1 percent of its 2012 average, total industrial production in March was 1.5 percent above its year-earlier level. Capacity utilization for the industrial sector increased 0.4 percentage point in March to 76.1 percent, a rate that is 3.8 percentage points below its long-run (1972–2016) average.
Industrial Production and Capacity Utilization: Summary
|Industrial production||2012=100||Percent change|
|2016||2017||2016||2017|| Mar. '16 to
|Major market groups|
|Major industry groups|
(see note below)
|Capacity utilization||Percent of capacity|| Capacity
|2016||2017|| Mar. '16 to
(see note below)
|Primary and semifinished||80.5||86.5||78.1||87.8||63.8||74.6||75.2||74.8||75.9||75.0||74.6||75.6||1.0|
In March, the jump in the output of utilities contributed substantially to gains in the indexes for consumer goods, business supplies, and materials through their energy components. Among the non-energy market groups, consumer durables posted a decline of 1.7 percent as a result of large decreases for automotive products and for appliances, furniture, and carpeting. The output of consumer non-energy nondurables moved up 0.2 percent, with gains in chemical products and paper products partly offset by losses in foods and tobacco and in clothing. Despite an increase for information processing equipment, decreases for transit equipment and for industrial and other equipment caused the index for business equipment to decline 0.4 percent. The output of defense and space equipment slipped 0.2 percent. The indexes for construction supplies and non-energy business supplies moved down 0.8 percent and 0.4 percent, respectively. As a result of large increases in the previous months, the output of construction supplies rose at an annual rate of 9.5 percent for the first quarter; the index for non-energy business supplies rose 2.1 percent. The production of non-energy materials declined 0.6 percent in March, with losses in most of its components.
Manufacturing output decreased 0.4 percent in March, and the gains in January and February are now reported to have been smaller than stated earlier. The decline in the manufacturing index in March was its first loss since August 2016; nevertheless, factory output increased at an annual rate of 2.7 percent in the first quarter. The production of durables moved down 0.8 percent in March. Among its major components, only computer and electronic products registered an increase, about 1 percent, and motor vehicles and parts recorded the largest decrease, 3.0 percent. The index for nondurables edged up, as gains in petroleum and coal products, in chemicals, and in paper products offset losses elsewhere. The output of other manufacturing (publishing and logging) fell 0.4 percent.
Mining output edged up 0.1 percent in March, with continuing gains in oil and gas extraction and in drilling and support activities slightly outweighing large decreases in coal mining and in nonmetallic mineral mining. After advancing 6.6 percent at an annual rate in the fourth quarter, the index for mining jumped 12.1 percent in the first quarter.
Capacity utilization for manufacturing fell 0.3 percentage point in March to 75.3 percent, a rate that is 3.1 percentage points below its long-run average. The operating rate for durables declined 0.7 percentage point, to 74.6 percent, and was 2.3 percentage points below its long-run average. The rates for nondurables and for other manufacturing (publishing and logging), little changed in March at 77.0 percent and 63.6 percent, respectively, remained substantially below their long-run averages. Utilization for mining edged down 0.1 percentage point to 81.9 percent, and the rate for utilities jumped 6.0 percentage points to 75.7 percent.
Introduction of Reliability Estimates for Industrial Production Indexes
With the current monthly G.17 statistical release, the Federal Reserve Board began publishing estimates of the reliability of the levels and the rates of change (monthly and quarterly) of the reported production indexes for total industry, manufacturing, mining, and utilities. The reliability estimates are designed to give data users a sense of the typical range into which a statistic will likely end up after its final (fifth) revision in a monthly release. The reliability estimates are based on the revision history for the indexes back to 2008; each G.17 release will include estimates for those months and quarters for which either new or updated estimates were issued that month. A detailed explanation is available on the Board's website at https://www.federalreserve.gov/releases/g17/g17_technical_qa.htm#reliability.
The reliability estimates are issued in table 15 of the G.17 release, available on the Board's website at https://www.federalreserve.gov/releases/g17/Current/default.htm. A text file that contains the estimates is also available on the Federal Reserve's website at https://www.federalreserve.gov/releases/g17/ipdisk/revh_sa.txt.
Revision of Industrial Production and Capacity Utilization
The Federal Reserve Board issued its annual revision to the index of industrial production (IP) and the related measures of capacity utilization on March 31, 2017. New annual benchmark data for 2015 for manufacturing were incorporated, as well as other annual data, including information on the mining of metallic and nonmetallic minerals (except fuels). The updated IP indexes included 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 were changed. Modifications to the methods for estimating the output of an industry affected the index from 1972 to the present.
Capacity and capacity utilization were revised to incorporate data through the fourth quarter of 2016 from the U.S. Census Bureau's Quarterly Survey of Plant Capacity along with new data on capacity from the U.S. Geological Survey, the U.S. Department of Energy, and other organizations.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:
- Summary: Industrial Production and Capacity Utilization
- Chart 1: Industrial Production, Capacity, and Capacity Utilization
- Chart 2: Industrial Production and Capacity Utilization
- Chart 3: Industrial Production and Capacity Utilization, High Technology Industries
- Table 1: Industrial Production: Market and Industry Groups (percent change)
- Table 2: Industrial Production: Special Aggregates and Selected Detail (percent change)
- Table 3: Motor Vehicle Assemblies
- Table 4: Industrial Production Indexes: Market and Industry Group Summary
- Table 5: Industrial Production Indexes: Special Aggregates
- Table 6: Diffusion Indexes of Industrial Production
- Table 7: Capacity Utilization: Manufacturing, Mining, and Utilities
- Table 8: Industrial Capacity: Manufacturing, Mining, and Utilities (percent change)
- Table 9: Industrial Production: Gross Value of Products and Nonindustrial Supplies
- Table 10: Gross-Value-Weighted Industrial Production: Stage-of-Process Groups
- Table 11: Historical Statistics for IP, Capacity, and Utilization: Total Industry
- Table 12: Historical Statistics for IP, Capacity, and Utilization: Manufacturing
- Table 13: Historical Statistics for IP, Capacity, and Utilization: Total Industry excluding Selected High-Technology Industries
- Table 14: Historical Statistics for IP, Capacity, and Utilization: Manufacturing excluding Selected High-Technology Industries
- Table 15: Industrial Production: Reliability Estimates