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

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

Industrial production increased 1.1 percent in November after having fallen 0.7 percent in October. The gain in November is estimated to have largely resulted from a recovery in production for industries that had been negatively affected by Hurricane Sandy, which hit the Northeast region in late October. In November, manufacturing output increased 1.1 percent after having decreased 1.0 percent in October; in addition to the storm-related rebound, a sizable rise in the production of motor vehicles and parts boosted factory output in November. The output of utilities advanced 1.0 percent, and production at mines rose 0.8 percent. At 97.5 percent of its 2007 average, total industrial production in November was 2.5 percent above its year-earlier level. Capacity utilization for total industry increased 0.7 percentage point to 78.4 percent, a rate 1.9 percentage points below its long-run (1972-2011) average.

Market Groups

The production of consumer goods rose 1.2 percent in November, reversing a decline of the same magnitude in October. The output of durable consumer goods increased 2.8 percent in November. Among durable consumer goods categories, the index for automotive products rose 3.4 percent, its first increase in five months; the indexes for home electronics; for appliances, furniture, and carpeting; and for miscellaneous goods all posted smaller increases. The production of nondurable consumer goods advanced 0.7 percent. The index for consumer energy products rose 0.9 percent after having fallen 0.7 percent in October, and the index for non-energy nondurables increased 0.7 percent in November following a decline of 1.9 percent in October. Among non-energy nondurables, the output of foods and tobacco, of clothing, and of paper products all registered sizable gains in November, while the output of chemical products edged down.

The output of business equipment moved up 1.2 percent in November and was 7.4 percent above its year-earlier level. The production of transit equipment increased 2.5 percent, and the production of industrial and other equipment rose 1.3 percent; output in both categories stepped down noticeably in October. The index for information processing equipment fell 0.4 percent in November, but it remained 4.0 percent above its year-earlier level.

The output of defense and space equipment was unchanged in November after decreasing 1.9 percent in October; however, the index stood 0.8 percent above its year-earlier level.

Among nonindustrial supplies, the output of construction supplies increased 1.4 percent in November, its largest monthly gain since February. The production of business supplies rose 0.7 percent in November following three consecutive months of declines.

The output of materials to be processed further in the industrial sector advanced 1.0 percent in November after having edged down 0.1 percent in October. The indexes for energy materials and for durable materials posted sizable gains in November, while the index for nondurable materials rose moderately. The output of durable materials increased 1.6 percent after three months of decreases. The index for consumer parts rose substantially, boosted in particular by motor vehicle-related production, and stood 17.8 percent above its year-earlier level; the output of equipment parts increased 0.3 percent in November after having moved down 0.5 percent in October. In November, the index for nondurable materials gained 0.4 percent; the indexes for textiles and for paper moved up, while the production of chemicals was unchanged. The output of energy materials rose 0.9 percent.

Industry Groups

Manufacturing output rose 1.1 percent in November following a decrease of 1.0 percent in October. Nearly all the decline in factory output in October is estimated to have been related to Hurricane Sandy, and the increase in November reflects a post- hurricane rebound in production as well as the solid advance in the output of motor vehicles and parts. Within manufacturing, increases were widespread in November across both durable and nondurable goods industries. The factory operating rate rose to 76.6 percent, a rate 2.2 percentage points below its long-run average.

The production of durable goods rose 1.6 percent in November. Output increased in all major categories of durables other than computer and electronic products, and aerospace and miscellaneous transportation equipment, which both decreased. Gains of more than 2 percent were recorded in the indexes for wood products; for primary metals; for electrical equipment, appliances, and components; for motor vehicles and parts; and for miscellaneous manufacturing. Capacity utilization for durable goods manufacturing was 76.7 percent, a rate 0.4 percentage point below its long-run average.

The output of nondurables rose 0.5 percent in November, and it was 0.6 percent above its year-earlier level. For November, most major categories of nondurables moved up, although the indexes for petroleum and coal products and for chemicals edged down. Capacity utilization for nondurable manufacturing was 77.9 percent, a rate 3.0 percentage points below its long-run average.

Production in the non-NAICS manufacturing industries (logging and publishing) rose 1.3 percent in November after having fallen 4.0 percent in October when the hurricane held down the output of publishers.

In November, mining output advanced 0.8 percent. Capacity utilization at mines moved up 0.5 percentage point to 91.1 percent, a rate 3.8 percentage points above its long-run average. The output of utilities rose 1.0 percent in November, and gains were posted for both the electric and the natural gas categories. The operating rate for utilities increased 0.6 percentage point to 75.3 percent, a rate 11.0 percentage points below its long-run average.

Capacity utilization rates in November for industries grouped by stage of process were as follows: At the crude stage, utilization increased 0.5 percentage point to 88.5 percent, a rate 2.2 percentage points above its long-run average; at the primary and semifinished stages, utilization rose 0.9 percentage point to 75.8 percent, a rate 5.3 percentage points below its long-run average; and at the finished stage, utilization moved up 0.5 percentage point to 76.8 percent, a rate 0.4 percentage point lower than 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 at the end of March 2013. The revised IP indexes will incorporate detailed data from the 2011 Annual Survey of Manufactures, conducted by the U.S. Census Bureau. Annual data from the U.S. Geological Survey regarding metallic and nonmetallic minerals (except fuels) for 2011 will also be incorporated. The update will include revisions to the monthly indicator (either product data or input data) and to seasonal factors for each industry. In addition, the estimation methods for some series may be changed. Any modifications 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 through the fourth quarter of 2012 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 U.S. Department of Energy, and other organizations.

Once the revision is published, it will be available on the Board’s website at www.federalreserve.gov/releases/G17. The 2013 release schedule, however, is available now on the website.

References and Release Dates References

The release for the annual revision that was published on March 30, 2012 is available on the Board’s website (www.federal reserve.gov/releases/g17/revisions/Current/DefaultRev.htm). A summary of the annual revision that incorporated back to 1972 production and capacity indexes reclassified according to the North American Industry Classification System is available in an article in the Federal Reserve Bulletin, vol. 89 (April 2003), pp. 151-176. A description of the aggregation methods for industrial production and capacity utilization is included in an article in the Federal Reserve Bulletin, vol. 83 (February 1997), pp. 67-92. The Federal Reserve methodology for constructing industry-level measures of capital is detailed in “Capital Stock Estimates for Manufacturing Industries: Methods and Data” by Mike Mohr and Charles Gilbert (1996), which can be obtained at: www.federalreserve.gov/releases/g17/CapitalStockDocLatest.pdf.

Industrial Production-1986 Edition contains a more detailed description of the other methods used to compile the industrial production index, plus a history of its development, a glossary of terms, and a bibliography. The major revisions to the IP indexes and capacity utilization since 1990 have been described in the Federal Reserve Bulletin (April 1990, June 1990, June 1993, March 1994, January 1995, January 1996, February 1997, February 1998, January 1999, March 2000, March 2001, March 2002, April 2003, Winter 2004, Winter 2005, March 2006, May 2007, August 2008, August 2009) or in an on-line staff study (www.federalreserve.gov/releases/g17/articles/rev2010/industrial 10.pdf).

Release Schedule

At 9:15 a.m. on

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.

2013: January 16, February 15, March 15, April 16, May 15, June 14, July 16, August 15, September 16, October 17, November 15, and December 16.

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

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.