EconoIndicators

Industrial Production At a Glance

• Industrial Production Index: 114.4
• (Base year 2002)
• Monthly Change: Up 0.1%
• Manufacturing Change: Up 0.1%
• Mining Change: Up 0.2%
• Utilities Change: Down 0.1%
• Capacity Utilization: 82.1%
• Long Run Average Capacity Utilization: 81%

Technorati Tags: industrial, production, capacity, utilization, manufacturing, mining, utilities

INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION

Industrial production increased 0.1 percent in September after having been unchanged in August. At
114.4 percent of its 2002 average, total industrial production in September was 1.9 percent above its
year-earlier level. For the third quarter as a whole, industrial production rose at an annual rate of
4.0 percent, a pace that was 1/2 percentage point faster than in the previous quarter. Output in the
manufacturing sector rose 0.1 percent in September after a decline of 0.4 percent in August. The output of
utilities edged down 0.1 percent in September after a surge in August; the output at mines expanded
0.2 percent in September. Capacity utilization for total industry was unchanged, at 82.1 percent, a rate
just 0.1 percentage point above its year-earlier level but 1.1 percentage points above its 1972-2006
average.

Market Groups
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The output of consumer goods fell 0.3 percent in September; the decrease was led by both a decline in
the production of consumer durables and a pullback in the output of consumer energy products. Among
durable consumer goods, the production index for automotive products fell 2.8 percent, in part because of a
recent strike at a major motor vehicle manufacturer. Elsewhere, the production indexes for home
electronics and for appliances, furniture, and carpeting changed little, and the output of miscellaneous
durable goods declined 0.4 percent. The production of nondurable non-energy consumer goods increased
0.1 percent, as a third consecutive month of gains in the index for consumer chemical products and a
bounceback in the production of paper products more than offset lower output of foods and tobacco. After a
jump in August, the index for consumer energy goods decreased last month, as gasoline output fell.

The index for business equipment rose 0.4 percent in September. The output of transit equipment
edged up 0.2 percent. Gains in the production of civilian aircraft and related equipment offset lower
motor vehicle assemblies. The index for information processing equipment climbed 0.8 percent, and the
index for industrial and other equipment increased 0.4 percent. Gains within both of these groups were
widespread. For the third quarter as a whole, the output of business equipment rose at an annual rate of
7.0 percent, a pickup of 1-1/4 percentage points from the previous quarter. The output of defense and
space equipment moved higher in September; the increase of 5.1 percent (annual rate) for the third quarter
as a whole marked the first quarterly gain for this index since the third quarter of 2006.

In September, construction supplies declined 0.2 percent for a third consecutive month; the index is
0.7 percent below its year-earlier level. The index for business supplies rose 0.3 percent in September
because of higher output of non-energy business supplies; commercial energy products edged down.

The production of materials increased 0.2 percent in September. Within non-energy materials, the
index for durable materials edged up 0.1 percent; a drop in consumer parts that reflected lower output of
motor vehicle parts was offset by gains in the indexes for equipment parts and for other parts. Among
nondurable materials, gains in the output of chemicals more than offset declines in the output of textiles
and of paper. The output of energy materials climbed 0.4 percent.

Industry Groups
—————

Manufacturing output increased 0.1 percent in September. The factory operating rate declined 0.1
percentage point, to 80.4 percent, a rate that is 0.6 percentage point above its 1972-2006 average. The
production of durable goods dipped 0.1 percent. Decreases were recorded in motor vehicles and parts, wood
products, nonmetallic mineral products, and furniture and related products, whereas increases occurred in
miscellaneous manufacturing; electrical equipment, appliances, and components; aerospace and miscellaneous
transportation equipment; primary metals; fabricated metal products; computer and electronic products; and
machinery. The production of nondurable goods moved up 0.1 percent. Increases in the indexes for
chemicals, for printing and support, and for apparel and leather more than offset declines elsewhere. The
output of non-NAICS industries (logging and publishing) climbed 0.9 percent.

The output of utilities was little changed in September. The output of natural gas utilities decreased
0.2 percent; the output of electric utilities was unchanged. The operating rate at utilities decreased 0.2
percentage point, to 87.8 percent, a rate 1.1 percentage points above its 1972-2006 average. The output of
mines increased 0.2 percent, and the capacity utilization rate for mining rose to 90.6 percent, a rate
3.2 percentage points above its long-run average.

By stage of process, the capacity utilization for industries at the crude stage climbed 0.6 percentage
point in September, to 90.3 percent, a rate nearly 4 percentage points above its 1972-2006 average. In
contrast, the operating rate for industries at the primary and semifinished stages decreased 0.2 percentage
point, to 82.7 percent, just 0.5 percentage point above its long-run average. The operating rate for
industries at the finished stage decreased 0.1 percentage point, to 78.6 percent, 0.8 percentage point
above its long-run average.
Notice
Revision of Industrial Production and Capacity Utilization

The Federal Reserve Board plans to issue an annual revision to the index of industrial production
(IP) and the related measures of capacity and capacity utilization around the end of March 2008. The
revised IP indexes will incorporate data from the 2006 Annual Surveys of Manufactures and data from
selected editions of the 2006 Current Industrial Reports, all from the U.S. Census Bureau. Annual data
from the U.S. Geological Survey regarding metallic and nonmetallic minerals (except fuels) for 2006 will
also be incorporated. The updating will include revisions to the monthly indicator (either product data or
input data) and to seasonal factors for each industry as well as changes in the estimation methods for some
series. Any changes to methods for estimating the output of an industry will affect the index from 1972 to
the present.

After the release of the revision, later monthly releases will include new or revised indexes for a
six-month reporting window: one month of new data and revisions for the previous five months. The new
longer reporting window will allow the incorporation of additional lagging data prior to an annual
revision. The longer reporting window will cause the latest month of data shown for a few indexes to be as
many as five months earlier than the latest value for aggregate industrial production; data for detailed
production indexes are not shown in the supplement to the G.17 until either the underlying data are
available or the reporting window is closed. Currently, the data issued for only one or two of the
published indexes would be affected by this change.

Capacity and capacity utilization will be revised to incorporate data from the Census Bureau’s 2006
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.

Industrial production and capacity utilization September 2007 [Text]

Industrial production and capacity utilization September 2007 Supplemental [PDF]

Industrial production and capacity utilization September 2007 Supplemental [Text]

Source: Federal Reserve Board