EconoIndicators

Industrial Production At a Glance

• Industrial Production Index: 114.0
• (Base year 2002)
• Monthly Change: 0%
• Manufacturing Change: 0%
• Mining Change: Up 0.1%
• Utilities Change: Down 0.2%
• Capacity Utilization: 81.4%
• Long Run Average Capacity Utilization: 81%

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

INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION

Industrial production was unchanged in December; the change in the index over the previous three
months was little revised, with offsetting revisions to September and October. For the fourth quarter,
output fell 1.0 percent (annual rate), the first quarterly decrease since the fourth quarter of 2006. At
114.0 percent of its 2002 average, total industrial production in December was 1.5 percent above its
year-earlier level. Output in the manufacturing sector was unchanged in December. The output of utilities
decreased 0.2 percent in December as a result of a decline at gas utilities; the output at mines edged up
0.1 percent after an increase of 1.0 percent in November. Capacity utilization for total industry posted a
small decrease in December, to 81.4 percent, a rate slightly below its year-earlier level but 0.4
percentage point above its 1972-2006 average.

Market Groups
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The output of consumer goods edged up 0.1 percent in December, as nondurables advanced slightly but
durables decreased. Among durable consumer goods, the production index for automotive products moved up
0.2 percent after having risen 1.4 percent in November. Elsewhere the production index for home
electronics edged down 0.2 percent, and the production index for appliances, furniture, and carpeting moved
down 1.6 percent with widespread decreases among its components. After having decreased for two
consecutive months, the production of nondurable non-energy consumer goods advanced 0.5 percent in December
with gains in foods and tobacco, paper, and clothing, and a small loss in chemical products. After having
increased a revised 1.8 percent in November, the index for consumer energy goods fell 1.0 percent in
December.

The index for business equipment moved up 0.8 percent in December and advanced at an annual rate of
1.6 percent in the fourth quarter. In December, the output of transit equipment rose 2.3 percent; the gain
was concentrated in commercial aircraft. After having risen 2.1 percent in November, the index for
information processing equipment increased 0.5 percent in December; despite moderate gains in most
components, December’s rise in this index was held down by a drop in the output of communications
equipment. The index for industrial and other equipment moved up 0.4 percent; output for this sector fell
at an annual rate of 1.4 percent in the fourth quarter.

The output of defense and space equipment advanced 0.1 percent in December and was unchanged from its
year-earlier level.

In December, the index for construction supplies fell 0.9 percent, its sixth consecutive monthly
decline; the index was 2.2 percent below its year-earlier level and declined at an annual rate of 5.4
percent for the fourth quarter as a whole. The index for business supplies was unchanged in December.

The production of materials decreased 0.3 percent in December, which partially reversed its November
increase. Among non-energy materials, the index for durable materials decreased 0.4 percent in December.
A gain in equipment parts was outweighed by decreases in consumer parts and other durable materials; losses
were widespread within these categories. The output of nondurable materials moved down 0.4 percent, with
declines in all of its major subcategories.

Industry Groups
—————

Manufacturing output was unchanged in December after having increased 0.3 percent in November;
manufacturing fell at an annual rate of 1.9 percent for the fourth quarter as a whole. The factory
operating rate decreased 0.1 percentage point, to 79.7 percent, a level 0.1 percentage point below its
1972-2006 average. The production of durable goods was unchanged in December and declined at an annual
rate of 1.5 percent in the fourth quarter. The output of wood products increased 1.1 percent in December
after having declined for five consecutive months. Machinery, computer and electronic products, and
aerospace and miscellaneous transportation equipment all posted gains, whereas nonmetallic mineral products
and primary metal production posted declines of 2.1 percent and 1.0 percent respectively. The production
of nondurable goods edged down 0.1 percent after a gain of similar size in November. Gains in the indexes
for food, beverage, and tobacco products and for apparel and leather in December were more than offset by
reductions in most other categories. The output of non-NAICS industries (newspaper publishing and logging)
edged up 0.1 percent.

The output of mines increased 0.1 percent, and the capacity utilization rate for mining was unchanged at
92.1 percent, a rate 4.7 percentage points above its long-run average. The index for utilities decreased
0.2 percent in December. The output of natural gas utilities fell 3.1 percent, and the output of electric
utilities edged up 0.3 percent. The operating rate at utilities decreased 0.3 percentage point, to 86.2
percent, a level 0.5 percentage point below its 1972-2006 average.

Capacity utilization at industries grouped by stage of processing changed as follows: For the crude stage,
utilization decreased 0.3 percentage point, to 90.3 percent, a rate 3.8 percentage points above its
1972-2006 average. For the primary and semifinished stages, utilization decreased 0.4 percentage point, to
81.7 percent, a rate 0.5 percentage point below its long-run average. For the finished stage, utilization
moved up 0.3 percentage point, to 78.3 percent, a rate 0.5 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 publication 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 to the previous five months of data.
The new longer reporting window will allow the incorporation of additional lagging data before 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 G.17 - December 2007 [PDF]

Industrial Production G.17 Supplemental - December 2007 [PDF]

Industrial Production G.17 - December 2007 [Text]

Industrial Production G.17 Supplemental - December 2007 [Text]

Source: Federal Reserve Board