EconoIndicators

Industrial Production At a Glance

• Industrial Production Index: 106.8
• (Base year 2002, Seasonally Adjusted)
• Monthly Change: down 0.6%
• Manufacturing Change: down 1.4%
• Mining Change: up 2.5%
• Utilities Change: up 1.6%
• Capacity Utilization: 75.4%
• Long Run Average Capacity Utilization: 81%

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

Industrial Production and Capacity Utilization

Industrial production decreased 0.6 percent in November with declines widespread across industries. The
drop in output in September was revised down, and the rebound in October was revised up, in large part
because both the decrease due to the September hurricanes and the subsequent partial recovery in October
were larger than previously reported.

Manufacturing production dropped 1.4 percent in November despite the resumption of activity in the
commercial aircraft industry after the resolution of a strike early in the month. The output of mines
advanced 2.5 percent, primarily as a result of a further post-hurricane recovery in crude oil and natural
gas operations in the Gulf of Mexico. Taken together, the rebounds after the strike and the hurricanes
added almost 1 percentage point to the change in industrial production. The output of utilities rose 1.6
percent.

At 106.1 percent of its 2002 average, total industrial production in November was 5.5 percent below its
level of a year earlier. The capacity utilization rate for total industry fell to 75.4 percent, a level
5.6 percentage points below its average level from 1972 to 2007.

Market Groups
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The production of consumer goods decreased 0.7 percent in November. The output of consumer durables fell
3.0 percent, while the output of consumer nondurables edged down 0.1 percent. Among consumer durable
goods, the decreases in production were broadly based: Automotive products dropped 2.6 percent;
appliances, furniture, and carpeting fell 4.0 percent; home electronics moved down 1.7 percent; and
miscellaneous goods declined 3.4 percent. Among consumer nondurable goods, the production of consumer
energy products edged up 0.2 percent. The index for non-energy nondurable consumer goods declined 0.2
percent, as the output of paper products decreased 0.6 percent and the other major components recorded
smaller losses.

The output of business equipment rose 3.2 percent in November. The production of transit equipment jumped
more than 40 percent after having plunged in September and October because of the strike in the commercial
aircraft industry. The index for industrial and other equipment moved down about 2 percent for a third
consecutive month; this index now stands nearly 7 percent below its year-earlier level. The index for
information processing equipment declined 0.7 percent, its sixth consecutive monthly decrease.

The output of defense and space equipment edged down 0.1 percent in November and was 2.1 percent below its
year-earlier level.

Among nonindustrial supplies, the production of construction supplies decreased 3.3 percent in November,
partly because of drops in concrete and product, stone mining and quarrying, and architectural and
structural metals. The index for business supplies fell 1.0 percent and was 5.4 percent below its
year-earlier level.

The output of materials declined 1.0 percent in November. The continued recovery in natural gas and crude
oil extraction after the September hurricanes contributed to an increase of 2.8 percent in the production
of energy materials. The production of durable materials dropped 3.0 percent, and the production of
nondurable materials slumped 3.3 percent. All major components of durable and nondurable materials
registered large declines.

Industry Groups
—————

Manufacturing output fell 1.4 percent in November. The factory operating rate moved down to 72.3 percent,
a level that was 7.4 percentage points below its 1972-2007 average. The index for durable goods industries
decreased 1.3 percent, with declines widespread among its components. The largest drop among major
industries was in primary metals, which fell more than 7 percent for a second straight month, mainly
because of lower output at steel mills. Only the index for aerospace and miscellaneous transportation
equipment moved up, but this gain of 12.8 percent reflected the return to work after the strike at a major
commercial aircraft producer. The production of nondurable goods fell 1.6 percent. Among nondurables, the
largest decline was seen in chemicals, which fell 3.6 percent. Other industries with declines of at least
2 percent included textile and product mills, plastics and rubber products, and paper.

The index for the other manufacturing category, which consists of publishing and logging, moved down 0.6
percent in November.

Capacity utilization rates in November at industries grouped by stage of process were as follows: For the
crude stage, utilization increased 0.4 percentage point, to 86.0 percent, a rate 0.6 percentage point below
its 1972-2007 average; for the primary and semifinished stages, utilization moved down 1.3 percentage
points, to 74.6 percent, a rate 7.6 percentage points below its long-run average; and for the finished
stage, utilization was unchanged at 72.4 percent, a rate 5.3 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 - November 2008 [PDF]

Industrial Production g17 - November 2008 [Text]

Source: Federal Reserve Board