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

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

Industrial Production and Capacity Utilization

Industrial production increased 0.6 percent in July after having risen 0.1 percent in both May and June. Revisions to the rates of change for recent months left the level of the index in June little changed from its previous estimate. Manufacturing output rose 0.5 percent in July, the same rate of increase as was recorded for June. In July, the output of mines increased 1.2 percent, and the output of utilities rose 1.3 percent. At 98.0 percent of its 2007 average, total industrial production in July was 4.4 percent above its year-earlier level. Capacity utilization for total industry moved up 0.4 percentage point to 79.3 percent, a rate 1.0 percentage point below its long-run (1972-2011) average.

Market Groups -------------

The production of consumer goods increased 0.6 percent in July after having decreased 0.4 percent in June. The output of durable consumer goods advanced 1.5 percent in July. Within durable consumer goods, the production of automotive products increased 1.9 percent and was 15.5 percent above its year-earlier level.

The output of home electronics moved down for a fifth consecutive month and was 5.2 percent lower than its year-earlier level. The indexes for appliances, furniture, and carpeting and for miscellaneous durable goods increased in July; both measures were higher than a year earlier. The output of consumer nondurables rose 0.3 percent in July. The production of non-energy nondurables edged up 0.1 percent, with increases for foods and tobacco and for paper products mostly offset by a decrease for chemical products. The output of consumer energy products moved up 0.8 percent as a result of higher utilities output. During the past 12 months, the index for consumer goods has risen 1.8 percent, with the production of durable consumer goods up 10.4 percent and the output of nondurable consumer goods down 0.7 percent.

The output of business equipment declined 0.1 percent in July after having jumped nearly 2 percent in June. In July, a drop of 1.9 percent in the index for industrial and other equipment outweighed substantial gains in transit equipment and in information processing equipment. Over the past 12 months, the overall index for business equipment has advanced 12.3 percent, with sizable gains in all three of its major categories.

The output of defense and space equipment rose 2.8 percent in July, as workers returned from a labor strike at a major military aircraft manufacturing facility. The gain nearly reversed the declines in the previous three months; the level of the index in July was 5.2 percent above its year-earlier level.

Among nonindustrial supplies, the output of construction supplies decreased 0.5 percent in July. The index has fallen in four of the past five months. The production of business supplies rose 0.3 percent in July after having edged down in the previous month.

The output of materials to be processed further in the industrial sector rose 1.0 percent in July after having increased 0.2 percent in June. The output of durable materials advanced 1.1 percent in July, with a jump of 4.2 percent in consumer parts and smaller improvements in its other major components. The production of nondurable materials increased 0.4 percent. Although the output of textile materials decreased 1.5 percent, all of the other major nondurable materials categories recorded gains. The index for energy materials strengthened 1.2 percent, supported by gains for natural gas and crude oil extraction, coal mining, and electricity generation.

Industry Groups ---------------

In July, manufacturing output increased 0.5 percent and was 5.0 percent above its year-earlier level. The factory operating rate moved up 0.2 percentage point in July to 77.8 percent, a level 1.0 percentage point below its long-run average.

The production index for durable goods increased 0.8 percent in July. Gains of more than 1 percent were recorded in primary metals, in computer and electronic products, in motor vehicles and parts, in aerospace and miscellaneous transportation equipment, and in miscellaneous manufacturing. Only wood products, nonmetallic mineral products, and machinery posted decreases. Capacity utilization for durable goods manufacturing was 78.6 percent, a rate 5.1 percentage points above its year- earlier level and 1.5 percentage points above its long-run average.

In July, the production of nondurables was unchanged. Increases in the production indexes for food, for paper, and for plastics and rubber products offset losses in most other categories of nondurables. The overall output of nondurables has edged up 0.5 percent in the past 12 months. Capacity utilization was unchanged in July at 78.2 percent; it remained 2.7 percentage points below its long-run average.

Production in the non-NAICS manufacturing industries (logging and publishing) was unchanged in July and has increased 0.5 percent during the past 12 months.

In July, mining output advanced 1.2 percent, with gains in oil and gas extraction, coal mining, and metal mining. Capacity utilization for mining moved up 0.9 percentage point to 90.4 percent, a rate 3.1 percentage points above its long-run average. The output of utilities increased 1.3 percent after having fallen 3.3 percent in June. The operating rate for utilities rose 0.8 percentage point in July to 75.7 percent, a rate 10.6 percentage points below its long-run average.

Capacity utilization rates in July for industries grouped by stage of process were as follows: At the crude stage, utilization gained 0.6 percentage point to 87.9 percent, a rate 1.6 percentage points above its long-run average; at the primary and semifinished stages, utilization rose 0.6 percentage point to 76.6 percent, a rate 4.5 percentage points below its long-run average; and at the finished stage, utilization edged up 0.1 percentage point to 78.5 percent, a rate 1.3 percentage points higher than its long-run average.

Source: Federal Reserve http://www.federalreserve.gov/releases/g17

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