U.S. July Industrial Production and Capacity Report (Text)

Following is the text of the U.S. industrial production and capacity utilization report for July.

Industrial production advanced 0.9 percent in July. Although the index was revised down in April, primarily as a result of a downward revision to the output of utilities, stronger manufacturing output led to upward revisions to production in both May and June. Manufacturing output rose 0.6 percent in July, as the index for motor vehicles and parts jumped 5.2 percent and production elsewhere moved up 0.3 percent.

The output of mines advanced 1.1 percent, and the output of utilities increased 2.8 percent, as the extreme heat during the month boosted air conditioning usage. At 94.2 percent of its 2007 average, total industrial production for July was 3.7 percentage points above its year-earlier level. The capacity utilization rate for total industry climbed to 77.5 percent, a rate 2.2 percentage points above the rate from a year earlier but 2.9 percentage points below its long-run (1972-2010) average.

Market Groups

Production increased for all of the major market groups in July. The output of consumer goods advanced 1.1 percent; even so, it was only 1.3 percent above its year-earlier level. Consumer durables recorded a gain of 3.6 percent. Automotive products posted a jump of 5.9 percent to lead the increase in durables, as motor vehicle output rebounded after the supply chain disruptions that resulted from the earthquake in Japan. Output also increased for the other major components of durable goods, with gains of nearly 1 percent or more in both home electronics and miscellaneous goods. The output of nondurable consumer goods rose 0.5 percent. Most of the increase of 1.5 percent in consumer energy products reflected the jump in utility output. The production of other nondurables edged up 0.1 percent, as a gain in foods and tobacco was mostly offset by decreases in clothing and chemical products.

The production of business equipment increased 0.6 percent in July and has gained 8.5 percent in the past 12 months. All of the major components of business equipment are substantially above their levels of a year earlier. In July, the indexes for information processing equipment and transit equipment rose 1.0 percent and 2.5 percent, respectively, while the index for industrial and other equipment decreased 0.4 percent.

In July, the index for defense and space equipment increased 0.6 percent after having fallen 1.1 percent in June. Production for this market group has advanced, on net, since the end of last year, though at a slower pace than during 2010.

The output of construction supplies increased 0.3 percent in July, its second small monthly gain following a large jump in May. Over the past 12 months, the index for construction supplies has moved up 4.4 percent; nevertheless, the index in July remained more than 20 percent below its average level during 2007. The production of business supplies gained 0.8 percent in July; even so, it has increased only 1.3 percent during the past 12 months and has reversed little of the decline from late 2007 to early 2009.

The production of materials to be further processed in the industrial sector rose 0.9 percent in July. The output of durable materials increased 0.7 percent and was up for a third consecutive month. Consumer parts recorded an increase of 1.0 percent in July after having moved up 2.8 percent in June. The output of equipment parts declined 0.2 percent after gains in May and June of 1.3 percent and 1.0 percent, respectively; the production of equipment parts has advanced 10.6 percent in the past 12 months. The output of nondurable materials edged up 0.1 percent in July. Although the indexes for both textile and paper materials increased about 3/4 percent, the output of chemical materials only edged up, and the output of other nondurable materials fell. The output of energy materials rose 1.6 percent, with advances in the extraction of both natural gas and crude oil accompanied by an increase in the output of utilities.

Industry Groups

Manufacturing output increased 0.6 percent in July following gains of 0.2 percent in both May and June. Capacity utilization for manufacturing in July was 75.0 percent, a rate 10.6 percentage points above its trough in June 2009 but still 4.0 percentage points below its long-run average.

The production index for durable goods manufacturing rose 1.0 percent in July, its largest increase since jumping 1.7 percent in January. Among the major durable goods industries, the largest gain was posted in motor vehicles and parts; in addition, primary metals and aerospace and miscellaneous transportation equipment both rose more than 1.0 percent. The only decreases last month were posted by electrical equipment, appliances, and components and by miscellaneous manufacturing. The overall index for durable manufacturing was 6.6 percent above its year-earlier level.

The index for nondurable manufacturing increased 0.3 percent in July. The largest increases were for food, beverage, and tobacco products; printing and support; and plastics and rubber products, while the only decreases were recorded for apparel and leather products and for chemicals. Nondurable manufacturing stood at 1.7 percent above its year-earlier level.

The production index for mining increased 1.1 percent in July; its gains averaged about 1.0 percent during the preceding four months. Capacity utilization in mining rose to 90.3 percent, a rate 2.9 percentage points above its long-run average. The increase in output of 2.8 percent for utilities boosted its operating rate to 81.0 percent, but utilization remained 5.6 percentage points below its long-run average.

Capacity utilization rates in July at industries grouped by stage of process were as follows: At the crude stage, utilization increased 0.7 percentage point to 88.5 percent, a rate 2.1 percentage points above its long-run average; at the primary and semifinished stages, utilization rose 0.7 percentage point to 74.7 percent, a rate 6.6 percentage points below its long-run average; and at the finished stage, utilization increased 0.5 percentage point to 76.3 percent, a rate 1.0 percentage point below its long-run average. Explanatory Note

The Industrial Production and Capacity Utilization statistical release, which is published around the middle of the month, reports measures of output, capacity, and capacity utilization in manufacturing, mining, and the electric and gas utilities industries. More detailed descriptions of industrial production and capacity utilization are available on the Board’s website at www.federalreserve.gov/releases/G17. In addition, the website includes files containing data shown in the release, more detailed series that are published in a monthly supplement to the G.17, and historical data. Instructions on searching for and downloading specific series are provided as well.

Industrial Production

Release Schedule

At 9:15 a.m. on 2011: January 14, February 16, March 17, April 15, May 17, June 15, July 15, August 16, September 15, October 17, November 16, and December 15.

2012: January 18, February 15, March 16, April 17, May 16, June 15, July 17, August 15, September 14, October 16, November 16, and December 14.

http://www.federalreserve.gov/releases/g17

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