Industrial Production and Capacity Utilization - G.17

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Release Date: January 17, 2018
Revision of Industrial Production and Capacity Utilization Notice Below

Industrial production rose 0.9 percent in December even though manufacturing output only edged up 0.1 percent. Revisions to mining and utilities altered the pattern of growth for October and November, but the level of the overall index in November was little changed. For the fourth quarter as a whole, total industrial production jumped 8.2 percent at an annual rate after being held down in the third quarter by Hurricanes Harvey and Irma. At 107.5 percent of its 2012 average, the index has increased 3.6 percent since December 2016 for its largest calendar-year gain since 2010.

The gain in manufacturing output in December was its fourth consecutive monthly increase. The output of utilities advanced 5.6 percent for the month, while the index for mining moved up 1.6 percent. Capacity utilization for the industrial sector was 77.9 percent, a rate that is 2.0 percentage points below its long-run (1972–2016) average.

Industrial Production and Capacity Utilization: Summary
Seasonally adjusted
Industrial production 2012=100 Percent change
2017 2017 Dec. '16 to
Dec. '17
July[r] Aug.[r] Sept.[r] Oct.[r] Nov.[r] Dec.[p] July[r] Aug.[r] Sept.[r] Oct.[r] Nov.[r] Dec.[p]
Total index 105.0 104.6 104.8 106.6 106.5 107.5 -.2 -.4 .2 1.8 -.1 .9 3.6
Previous estimates 105.1 104.6 104.9 106.1 106.4 -.1 -.4 .3 1.2 .2
Major market groups
Final Products 101.6 101.6 102.0 103.1 102.7 103.5 -.3 .0 .4 1.1 -.4 .8 2.4
Consumer goods 105.0 105.0 105.0 106.4 105.6 106.7 -.1 .0 .0 1.3 -.7 1.0 1.5
Business equipment 100.8 100.7 102.3 103.5 103.7 103.9 -1.1 -.1 1.6 1.2 .1 .2 4.2
Nonindustrial supplies 105.0 104.5 105.0 106.0 106.0 106.4 -.2 -.5 .5 1.0 .0 .4 1.5
Construction 110.0 109.0 111.0 111.7 112.5 112.5 -.3 -.9 1.8 .7 .7 .0 3.2
Materials 107.6 106.8 106.7 109.4 109.6 110.8 -.2 -.7 -.1 2.6 .1 1.1 5.2
Major industry groups
Manufacturing (see note below) 103.2 103.0 103.1 104.6 104.9 105.0 -.3 -.2 .1 1.5 .3 .1 2.4
Previous estimates 103.2 103.0 103.2 104.7 104.8 -.3 -.2 .2 1.4 .2
Mining 109.2 108.1 109.7 111.6 111.8 113.6 -.3 -1.0 1.5 1.7 .1 1.6 11.5
Utilities 104.1 102.8 101.5 105.6 102.3 108.1 .5 -1.2 -1.3 4.1 -3.1 5.6 1.8
Capacity utilization Percent of capacity Capacity
growth
Average
1972-
2016 		1988-
89
high 		1990-
91
low 		1994-
95
high
2009
low
2016
Dec.
2017 Dec. '16 to
Dec. '17
July[r] Aug.[r] Sept.[r] Oct.[r] Nov.[r] Dec.[p]
Total industry 79.9 85.2 78.8 85.0 66.7 76.0 76.4 76.0 76.1 77.4 77.2 77.9 1.1
Previous estimates 76.5 76.1 76.2 77.0 77.1
Manufacturing (see note below) 78.4 85.6 77.3 84.6 63.7 75.2 75.3 75.1 75.2 76.3 76.4 76.4 .7
Previous estimates 75.3 75.1 75.2 76.3 76.4
Mining 87.0 86.1 83.8 88.6 78.4 79.0 83.3 82.2 83.2 84.5 84.4 85.6 2.8
Utilities 85.6 93.2 84.7 93.2 78.1 79.5 77.6 76.6 75.6 78.7 76.2 80.4 .6
Stage-of-process groups
Crude 86.1 87.7 84.5 90.1 76.3 79.6 83.1 81.5 80.9 83.8 83.8 85.0 2.8
Primary and semifinished 80.5 86.5 78.1 87.8 63.8 75.9 75.5 75.2 75.1 76.5 76.4 77.2 .5
Finished 76.9 83.4 77.3 80.6 66.7 74.9 74.9 75.0 75.6 76.0 75.8 75.9 .8
r Revised. p Preliminary.
Market Groups

The output of consumer goods rose 1.0 percent in December, primarily as a result of advances in durables and consumer energy products. Business equipment registered a gain of 0.2 percent, led by an increase of 1.1 percent for transit equipment. The index for defense and space equipment climbed 0.7 percent. The output of construction supplies was unchanged, and the index for business supplies rose 0.5 percent. The production of materials moved up 1.1 percent on the strength of a 2.7 percent gain for energy materials; the indexes for durable and nondurable materials were unchanged.

Industry Groups

In December, manufacturing output edged up 0.1 percent and was 2.4 percent above its year-earlier level. In the fourth quarter, the index for manufacturing moved up at an annual rate of 7.0 percent. The gain in manufacturing in December reflected increases of 0.3 percent and 0.2 percent in the indexes for durables and for other manufacturing (publishing and logging), respectively; the index for nondurables edged down 0.1 percent. Within durables, gains were widespread, with the largest advance, 2.0 percent, registered by motor vehicles and parts. Among nondurables, increases for most major industries were offset by declines in petroleum and coal products, in chemicals, and in plastics and rubber products.

The output of mines rose 1.6 percent in December primarily because of a gain posted by oil and gas extraction; the index was up 11.5 percent from its year-earlier level. In the fourth quarter, mining output advanced at an annual rate of 12.7 percent after being held down by the hurricanes in the third quarter.

Capacity utilization in manufacturing was unchanged at 76.4 percent in December and remained 2.0 percentage points below its long-run average. Utilization for durables edged up 0.1 percentage point to 76.1 percent, and the operating rate for nondurables edged down 0.1 percentage point to 77.9 percent. The operating rate for mines rose 1.2 percentage points to 85.6 percent, and the rate for utilities jumped 4.2 percentage points to 80.4 percent.

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 around the end of the first quarter of 2018. New annual benchmark data for 2016 will be incorporated for manufacturing, as will other annual data, including information on the mining of metallic and nonmetallic minerals (except fuels). The updated IP indexes 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 2017 from the U.S. Census Bureau's Quarterly Survey of Plant Capacity Utilization 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.

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Last Update: January 17, 2018