Industrial Production and Capacity Utilization - G.17
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In February, total industrial production decreased 2.2 percent. Manufacturing output and mining production fell 3.1 percent and 5.4 percent, respectively; the output of utilities increased 7.4 percent.
The severe winter weather in the south central region of the country in mid-February accounted for the bulk of the declines in output for the month. Most notably, some petroleum refineries, petrochemical facilities, and plastic resin plants suffered damage from the deep freeze and were offline for the rest of the month. Excluding the effects of the winter weather would have resulted in an index for manufacturing that fell about 1/2 percent and in an index for mining that rose about 1/2 percent. Both indexes would have remained below their pre-pandemic (February 2020) levels.
At 104.7 percent of its 2012 average, total industrial production in February was 4.2 percent lower than its year-earlier level. Capacity utilization for the industrial sector decreased 1.7 percentage points in February to 73.8 percent, a rate that is 5.8 percentage points below its long-run (1972–2020) average.
Industrial Production and Capacity Utilization: Summary
|Industrial production||2012=100||Percent change|
|2020||2021||2020||2021|| Feb. '20 to
|Major market groups|
|Major industry groups|
|Manufacturing (see note below)||99.4||100.9||101.8||102.6||103.8||100.7||.1||1.4||1.0||.7||1.2||-3.1||-4.1|
|Capacity utilization||Percent of capacity|| Capacity
|2020||2021|| Feb. '20 to
|Manufacturing (see note below)||78.1||85.5||77.3||84.6||63.7||75.2||71.4||72.4||73.1||73.7||74.6||72.3||-.3|
|Primary and semifinished||80.1||86.4||78.1||87.8||63.9||75.0||70.7||72.0||71.8||72.7||73.2||73.0||.2|
Most market groups posted losses in February, with the largest decrease of 14.5 percent coming from chemical materials as a result of the shutdowns at plants producing petrochemicals and plastic resins. Consumer energy products posted the only noteworthy increase, jumping 5.6 percent on a surge in utility output.
Manufacturing output decreased 3.1 percent in February. The indexes for durable, nondurable, and other (publishing and logging) manufacturing fell 2.6 percent, 3.7 percent, and 0.5 percent, respectively. Among durables, many industries experienced decreases of between 1 and 3 percent. The largest drop, 8.3 percent, was posted by motor vehicles and parts, while the only increases were recorded by primary metals and by aerospace and miscellaneous transportation equipment. The cutback in the output of motor vehicles and parts, which reflected both a global shortage of semiconductors and the severe weather, reduced overall manufacturing output about 1/2 percent. Among nondurables, most industries recorded losses. The largest reductions occurred in those industries most affected by the weather: The indexes for chemicals and for petroleum and coal products decreased 7.1 percent and 4.4 percent, respectively.
The output of utilities increased 7.4 percent in February, as the extremely cold winter weather boosted demand for heating. Mining production decreased 5.4 percent; a drop of more than 6 percent for oil and natural gas extraction accounted for most of the loss. The index for oil and gas well drilling continued its climb with an advance of 6.4 percent, though it remained about 50 percent below its year-earlier level.
Capacity utilization for manufacturing decreased 2.3 percentage points in February to 72.3 percent. The operating rate for mining decreased 4.3 percentage points to 77.5 percent, while the operating rate for utilities increased 5.2 percentage points to 78.5 percent; both rates remained below their long-run averages.
The Federal Reserve Board plans to issue its annual revision to the indexes of industrial production (IP) and the related measures of capacity utilization in the first half of 2021. New annual benchmark data for manufacturing for 2017 through 2019 will be incorporated, as well as other annual data, including information on the mining of metallic and nonmetallic minerals (except fuels). The weights for market-group splits of the industry-level indexes will be updated with information from the 2012 benchmark input-output accounts from the U.S. Bureau of Economic Analysis. 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 for manufacturing through the fourth quarter of 2020 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.
 The methods used to estimate the effects on the industrial production indexes of the severe winter weather are similar to those used to estimate the effects of other major storms and are described in a Technical Q&A (https://www.federalreserve.gov/releases/g17/g17_technical_qa.htm\#hurricaneharvey2017) and a FEDS Note (https://www.federalreserve.gov/econres/notes/feds-notes/natural-disasters-and-the-measurement-of-industrial-production-hurricane-harvey-a-case-study-20171011.htm).
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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 of Selected 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