EconoIndicators

Industrial Production At a Glance

• Industrial Production Index: 107.3
• (Base year 2002, Seasonally Adjusted)
• Monthly Change: Up 1.4 (1.3%)
• Manufacturing Change: Up 0.6%
• Mining Change: Up 1.6%
• Utilities Change: Up 0.4%
• Capacity Utilization: 76.4%
• Long Run Average Capacity Utilization: 81%

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

FEDERAL RESERVE STATISTICAL RELEASE

G.17 (419) For release at 9:15 a.m. (EST)
November 17, 2008

Industrial Production and Capacity Utilization

Industrial production increased 1.3 percent in October after a downwardly revised decline of 3.7 percent
in September. The revision to September output resulted, in part, from a larger estimate of the impact of
Hurricanes Gustav and Ike on the chemical industry. Manufacturing production, which dropped 3.7 percent in
September, rose 0.6 percent in October. The output of mines advanced 6.1 percent, as most crude oil and
natural gas operations in the Gulf of Mexico were brought back online after the hurricanes. The output of
utilities rose 0.4 percent.

Industrial production in September and October was substantially affected by the hurricanes and a strike
in the commercial aircraft industry. Excluding these special factors, total industrial production is
estimated to have fallen around 2/3 percent in both September and October. The hurricane-related
disruptions, which are now estimated to have been larger than previously reported, lowered the change in
total industrial production in September about 2-1/2 percentage points, and the return to operation in
October of most of the affected facilities boosted the change in output about 2 percentage points. The
strike in the commercial aircraft industry reduced industrial production 1/2 percentage point in September
and an additional 0.1 percentage point in October.

At 107.3 percent of its 2002 average, total industrial production in October was 4.1 percent below its
level of a year earlier. The capacity utilization rate for total industry rose to 76.4 percent in October,
a level 4.6 percentage points below its average level from 1972 to 2007.

Market Groups
————-

The production of consumer goods increased 1.3 percent in October. The output of durable goods moved down
2.1 percent, while the output of nondurable goods rose 2.2 percent. Among consumer durable goods, the
index for automotive products dropped 3.6 percent. The production of appliances, furniture, and carpeting
fell 1.1 percent, and the output of home electronics edged down 0.2 percent. The output of miscellaneous
goods declined 0.7 percent. Among consumer nondurable goods, the production of consumer energy products
jumped 6.9 percent, as the output of gasoline and distillate fuels recovered after the hurricanes.
Non-energy consumer nondurable goods increased 0.3 percent. The indexes for foods and tobacco and for
paper products moved higher, while the indexes for chemical products and for clothing decreased.

The output of business equipment fell 2.2 percent in October. The production of transit equipment, after
plunging more than 30 percent in September, fell an additional 10 percent in October because of the effects
of the strike in the commercial aircraft industry, which concluded around the end of the month. The index
for industrial and other equipment moved down 1.7 percent, partly because of declines in construction
machinery and in office furniture. The index for information processing equipment edged down 0.2 percent
after a decline of 0.9 percent in September.

The output of defense and space equipment increased 1.0 percent in October after having fallen 2.0 percent
in September; military shipbuilding had been curtailed in September by the hurricanes in the Gulf region.
On net, output in October was little changed from its level 12 months earlier.

Among nonindustrial supplies, the production of construction supplies decreased 1.1 percent in October,
partly because of drops in construction steel and in architectural and structural metals. The index for
business supplies rose 0.7 percent but was more than 4 percent below its year-earlier level.

The output of materials gained 2.3 percent in October. The ongoing recovery after the hurricanes in
natural gas and crude oil extraction contributed to an increase of 5.2 percent in the production of energy
materials. The production of durable materials dropped 1.7 percent, with declines in all its major
components. The production of nondurable materials rose 4.6 percent after a drop of 8.8 percent in
September. In October, the index for textile materials fell 1.0 percent, the index for paper materials
declined 0.7 percent, and the index for chemical materials increased 10.6 percent. The gain in chemical
materials followed a drop of 15.8 percent in September. Large decreases in organic chemicals and plastic
resins contributed significantly to the September plunge. Although the drop for organic chemicals was
mostly hurricane related, only a portion of the drop for resins was attributable to the storms.

Industry Groups
—————

Manufacturing output rose 0.6 percent in October after a decline of 3.7 percent in September. Excluding
the effects of the hurricanes and the aircraft strike, factory production is estimated to have declined
about 1 percent in both months. The factory operating rate stood at 73.8 percent in October and was about
6 percentage points below its 1972-2007 average. The production of durable goods industries decreased 1.8
percent in October, with declines widespread among its components. In addition to a particularly large
drop in primary metals, which was due to lower production of iron and steel, decreases also occurred in
most other durable goods industries. Only the index for electrical equipment, appliances, and components
moved up. The production of nondurable goods rose 3.1 percent after a decline of 4.5 percent in September.
The results for its major components were mixed in October. The output of petroleum and coal products
jumped 9.9 percent, as refinery output recovered from the post-hurricane levels. Gains were also recorded
in food, beverage, and tobacco products and in chemicals. However, the indexes for textile and product
mills, apparel and leather, paper, printing, and plastics and rubber products all declined.

The index for other manufacturing (that is, industries formerly considered manufacturing but not
classified as manufacturing under the North American Industry Classification System, or NAICS), which
consists of publishing and logging declined 0.4 percent in October, its tenth consecutive monthly decrease.

Capacity utilization rates at industries grouped by stage of process were as follows: At the crude stage,
utilization recovered 5.5 percentage points in October, to 85.6 percent, a rate 1.0 percentage point below
its 1972-2007 average; for the primary and semifinished stages, utilization moved back up 0.6 percentage
point, to 76.5 percent, a rate 5.7 percentage points below its long-run average; and for the finished
stage, utilization declined 0.6 percentage point, to 72.7 percent, a rate 5.0 percentage points below its
long-run average.

Notice

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 in late March of 2009. The revised IP indexes will
incorporate data from selected editions of the U.S. Census Bureau’s 2007 Current Industrial Reports.
Detailed data from the 2007 Economic Census, however, are not expected to be available. Annual data from
the U.S. Geological Survey regarding metallic and nonmetallic minerals (except fuels) for 2007 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 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 from the Census Bureau’s Quarterly
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 G17 - October 2008 [PDF]

Industrial Production G17 - October 2008 [Text]

Source: Federal Reserve Board