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INDUSTRIAL PRODUCTION
AND CAPACITY UTILIZATION
Industrial production rose 0.7 percent in September, boosted by a 4.4 percent jump in the output of utilities. The growth of total output was revised upward for July, to 0.8 percent, and downward for August, to 0.5 percent; these revisions were concentrated in the sector producing materials for further processing within the industrial sector. In September the demand for electricity rebounded after decreasing in August, when unseasonably cool weather held down the need for air conditioning. Manufacturing output increased 0.4 percent, with substantial gains in the output of light trucks, computers, commercial aircraft and parts, and semiconductors. The output at mines decreased 0.5 percent. At 122.4 percent of of its 1992 average, industrial production in September was 5.5 percent higher than in September 1996. The utilization of industrial capacity rose to 84.4 percent–its highest rate since February 1995.
Market Groups
The output of consumer goods rose 0.7 percent. Much of the gain resulted from heavier use of electricity by residential users and increased output of light trucks. Elsewhere, gains in the production of clothing, paper products, and chemical products for consumer use were partially offset by a decline in appliances. The output of business equipment was unchanged in September after twelve months of steady increases. Further advances in the production of computers and commercial aircraft boosted the growth rates for information processing and transit equipment. However, the output of industrial and other equipment fell back after an unusually strong gain in August.
The production of business supplies and of materials rose about 1 percent and the output of construction supplies edged up. Durable materials advanced on the continued strength in semiconductors and a pickup in basic metals, mainly steel. Rebounds in paper, textiles, and chemicals restored the output of nondurable materials to near its July level. The output of energy materials rose sharply, principally because of the rebound in electricity generation.
Industry Groups
The increase in manufacturing production of 0.4 percent was about half the average pace of the previous two months; the increase was evenly spread between durables and nondurables. Among durables, the strongest advances came in furniture, iron and steel, computers, semiconductors, and aerospace and miscellaneous transportation equipment. The effect of these gains was blunted by a substantial loss in industrial machinery excluding computers and office equipment and by small losses in instruments and miscellaneous manufacturing. Gains in paper, chemicals, and petroleum refining boosted the output of the nondurables.
Capacity utilization for manufacturing rose 0.1 percentage point, to 83.4 percent–its highest level since April 1995. Utilization in primary processing rose 0.4 percentage point, while the rate in advanced processing declined 0.1 percentage point. The utilization rates in both the primary- processing and advanced-processing groups have gone up more than 1.0 percentage point in the past twelve months.
Industrial Production
(Seasonally Adjusted)
Percent change Sep 96 to Jul 97 Aug Sep Sep 97 Total index 0.8 0.5 0.7 5.5 Previous estimates 0.4 0.7 Major market groups Products, total 0.3 0.8 0.5 4.6 Consumer goods 0.3 0.5 0.7 3.2 Business equip 1.2 2.2 0.0 10.8 Const supplies —0.7 0.9 0.1 1.1 Materials 1.6 0.1 1.1 6.9 Major industry groups Manufacturing 0.9 0.8 0.4 5.8 Durable 1.1 1.5 0.4 8.5 Nondurable 0.7 —0.1 0.5 2.6 Mining —0.2 —1.1 —0.5 2.3 Utilities 0.9 —1.2 4.4 4.7Capacity Growth Percent of Capacity Sep 96 to Jul 97 Aug Sep Sep 97 Total industry 83.9 84.1 84.4 3.9 Previous estimates 83.6 83.9 Manufacturing 82.9 83.3 83.4 4.2 Advanced processing 81.0 81.5 81.4 5.2 Primary processing 87.3 87.3 87.7 2.3 Mining 93.8 92.6 92.0 1.1 Utilities 88.5 87.4 91.2 1.7 Capacity Utilization
October 17, 1997Federal Reserve Board
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