Industrial Production and Capacity Utilization for November 2000 - Statistical Data Included

Federal Reserve Bulletin, Jan, 2001

Released for publication December 15

Industrial production fell 0.2 percent in November. Manufacturing output dropped 0.5 percent, with declines in many industries. Output at utilities surged 3.6 percent in response to unseasonably cool weather, and production in mining edged up 0.1 percent. At 148.6 percent of its 1992 average, industrial production was 4.7 percent higher than in November 1999. The rate of capacity utilization for total industry fell to 81.6 percent in November, a level 1/2 percentage point below its 1967-99 average.

MARKET GROUPS

The output of consumer goods ticked up 0.1 percent in November after having fallen 0.9 percent in October. The production of durable consumer goods decreased for a second month and was again pulled down by a drop in the assembly rate of autos and light trucks. The output of other consumer durables, which dipped 0.3 percent in November, was held down by a decline in carpeting and furniture. The production of nondurable consumer goods, which gained 0.4 percent, was buoyed by a strong gain in energy products, especially utilities. Excluding energy, the output of nondurables fell 0.3 percent. Decreases in the production of paper products, food and tobacco, and clothing outweighed a gain in the output of consumer chemicals.

The output of business equipment was flat after having shown little change in October; in the three months preceding October, the gains averaged about 1 percent. The output of computer and office equipment grew 2.0 percent in November, a pace below that of the preceding six months. The 0.9 percent drop in the production of industrial equipment more than erased October's gain. In contrast, the production of transit equipment climbed 0.6 percent; the gain was led by increases in commercial aircraft and medium and heavy trucks. Production in the other business equipment group fell 3.1 percent. The output of defense and space equipment grew 2.3 percent as two strikes that had held down output came to an end.

The production of construction supplies, which has been softening in recent months, declined another 1 percent in November. The output of materials fell 1/2 percent, pulled down by declines in durables and nondurables. Within durable materials, consumer parts was hit by a substantial decline in original equipment parts for motor vehicles. Although the output of semiconductors, printed circuit boards, and other electronic components increased 1.1 percent for a second month, the move was a sharp step-down from the 5.8 percent average monthly rate in the first three quarters of the year. The drop of 0.9 percent in the output of nondurable goods materials offset the gain in October and reflected losses in many of the sector's constituent categories.

INDUSTRY GROUPS

Manufacturing output dropped 0.5 percent in November, with decreases spread about evenly across both durable and nondurable goods industries. Among durable goods, the losses were widespread, with the largest declines in primary metals, lumber and products, and stone, clay, and glass industries. After being nearly flat for the year, the output of nondurables fell 0.6 percent; production is now 0.3 percent below its November 1999 level.

The factory operating rate declined to 80.6 percent, and easing occurred within many industries. The operating rate at electric utilities rose to 95.7 percent, 6.1 percentage points above its 1967-99 average; capacity utilization at gas utilities also increased, to 84.3 percent, a level 2.3 percentage points above its long-term average. The operating rate for mining was 86.5 percent, a reading little changed since June.

REVISION OF INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION

On December 5, the Federal Reserve Board published revisions to the index of industrial production (IP), to the related measures of capacity and capacity utilization, and to the index of industrial use of electric power. The updated measures reflect both the incorporation of newly available, more comprehensive source data typical of annual revisions and, for some series, the introduction of improved compilation methods. The revision also included a refinement of the method used to aggregate the individual series in the production and capacity indexes. The new source data are for recent years, primarily 1997 through 1999, and the modified methods affected data from 1992 onward.

The updating of source data for IP included annual data from the following reports of the Bureau of the Census: the 1997 Census of Manufactures, the 1998 Annual Survey of Manufactures, and selected editions of its 1998 and 1999 Current Industrial Reports. Annual data from the U.S. Geological Survey regarding metallic and nonmetallic minerals (except fuels) for 1998 and 1999 also were introduced. The updating included revisions to the monthly indicator for each industry (either physical product data, production-worker hours, or electric power usage) and revised seasonal factors.

The revision to capacity and capacity utilization incorporated preliminary data from the 1999 Survey of Plant Capacity of the Bureau of the Census, which covers manufacturing, along with other new data on capacity from the U.S. Geological Survey, the Department of Energy, and other organizations. The statistics on the industrial use of electric power incorporated additional information received from utilities for the past few years as well as data from the 1997 Census of Manufactures and 1998 Annual Survey of Manufactures.