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RESERVE statistical release f
yfr\

G.17 (419) Supplement

For release at 9:15 a.m. (EST)
November 30,1994

INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION (A REVISION)
The Federal Reserve index of industrial production (IP) and the related measures of capacity and
utilization have been revised for the period 1991 to date. An important aspect of the revision is the updating of the
weights used in constructing the indexes. Beginning with January 1992, the weights used for adding up the
individual series are now derived from value added by industries in 1992, rather than in 1987. The new estimates
of production also incorporate preliminary results of the 1992 Census of Manufactures, annual physical data on
mining for 1992 and 1993, and updated monthly source data, seasonal factors, and productivity relationships.
The revisions to capacity and utilization reflect the new IP indexes, updated manufacturing capital
stocks, and new information provided mainly by trade associations on physical capacity and utilization for selected
industries.1 The updated capital stocks incorporate new data on actual manufacturing investment in 1992 and
revised estimates of investment in 1993 and 1994 based on surveys of capital spending plans by manufacturers.
For the third quarter of 1994, the revised production index is 118.8 percent of output in 1987,
compared with 118.4 percent reported previously (table I).2 The revised capacity index is 140.9 percent of output
in 1987, compared with 140.0 percent reported previously. As a result, the rate of capacity utilization—-the ratio of
production to capacity—has been revised down about a third of a percentage point to an estimated 84.3 percent in
the third quarter of 1994 (chart). For October, industrial utilization is 84.6 percent, the highest rate since April
1989.
The IP index now shows stronger growth in 1991 and 1992 and slower growth in 1993 and 1994
(table 3). The upward revision to IP growth in 1992 reflects largely the incorporation of the new Census of
Manufactures data, The slower growth now shown for the past two years is due chiefly to the introduction of 1992
value-added weights.
The new 1992 weights have substantially reduced the relative share of output of computers in the total
indexes, a reduction that follows from the rapid decline in the relative price of computing power between 1987 and
1992. The smaller weight now given to the fast-growing computer industry explains, in large part, the slower
growth in 1993 and 1994 shown by the revised indexes for business equipment and for total manufacturing (table
4). By contrast, indexes for these groups excluding computers are largely unaffected by the shift to 1992 valuation.
The revisions to the special aggregates that exclude computers indicate that the picture of industrial activity during
the past two years has been little changed, on balance, by the revision.
Annual industrial capacity growth has beenrevisedup for 1991,1992, and 1993; and capacity
utilization by the fourth quarter of 1993 is unchangedfromthe earlier estimate (tables 5 and 6). The faster growth
of capacity through 1993 reflects the upwardlyrevisedgains in IP for these yeare, on balance,., as well as a faster
1. Although the revisions of the individual capacity indexes and utilization rates begin in 1991, small revisions to some
aggregates go back to 1987 for technical reasons. This aspect to the revision is discussed below.
2. Thefiguresfor August through October of this year are subject to further revision in the upcoming monthly statistical
releases.



rate of capital formation by manufacturers. Capital stock estimates have been raised, in large part, because the
1992 Census of Manufactures shows investment spending by manufacturers to have been stronger than survey data
had previously indicated.
The average upward revision to capacity growth for total manufacturing is relatively small. As with
the production index, the use of 1992 value-added weights reduces the contribution made by the rapidly expanding
computer industry to aggregate indexes. The upward revision to growth of capacity for manufacturing excluding
the computer industry, however, is noticeable in each year since 1990.
Capacity utilization in manufacturing by the third quarter of this year is 83.6 percent, 0.4 percentage
point lower than the rate previously reported. Although figures for some of the individual series changed
noticeably, the revised estimates for the major aggregates on balance are not appreciably different from the earlier
ones. Among primary-processing industries, operating rates are now estimated to have been slightly higher. The
rubber and plastics products, stone, clay and glass, paper, and fabricated metals industries contributed to the
increase; downward revisions to operating rates in the primary chemical, petroleum, and textiles industries largely
offset those increases. Among advanced processors, overall utilization is lower because of downward revisions in
a number of industries, especially printing and publishing and furniture and fixtures.
Capacity estimates for mining and utilities are little changed. Utilization rates in mining and in gas
utilities for the third quarter of 1994 are higher than the estimates reported earlier, whereas the operating rate for
electric utilities is essentially unchanged.
TECHNICAL ASPECTS OF THE REVISION
Value-Added Weights for 1992
The 1992 Censuses of Manufactures and Mineral Industries provided measures of value added by
individual manufacturing and mining industries in 1992. Value-added estimates for electric and gas utilities were
compiled from income and expense information published by the Department of Energy, the Edison Electric
Institute, and the American Gas Association. Total industrial value added was $1.7 trillion in 1992, of which
durable manufacturing contributed 45 percent; nondurable manufacturing, 40 percent; mining, 7 percent and
utilities, 8 percent (table 7).
The ratio of value added in an industry to total value added in manufacturing, mining, and utilities
indicates the proportionate contribution of that industry to total industrial production. These 1992 proportions
have been used in this revision to update the weights used to combine the production indexes beginning in 1992.
Updating weights allows for using reasonably current price relationships to determine the relative importance of
series in the index.
The index of industrial production is a linked Laspeyres quantity index. Value added for 1987
continues to provide the base weights to calculate annual growth from 1987 to 1992. Census measures of value
added for 1992 determine the base weights for 1992 forward. Indexes based on the 1992 weight base have been
linked to 1987-based indexes at the beginning of 1992 to form a continuous time series expressed as percentages of
output in 1987.
As indicated above, the most notable effect of the introduction of 1992 weights is to reduce the effect
of the rapidly rising output of the computer and office equipment industry (SIC 357) on total industrial production
since 1992. Previously, the proportion of SIC 357 in total IP, which was based on 1987 price relationships, had
grown from 2.3 percent in 1987 to 3.7 percent in 1992 and to 4.7 percent in 1993. The proportion for SIC 357
based on 1992 Census measures of value added, however, is only about half the proportion before the revision:
1.7 percent in 1992 and 2.2 percent in 1993. The reduced weight of SIC 357 in the total index reflects the decline
in the cost of computing power between 1987 and 1992.
Changes in Series Structure
The series structure of the index of industrial production, which comprises 255 individual series,
remains essentially unchanged. One series was added, and one was deleted beginning in 1992. First, the
2




"Business vehicles" series, which was formerly an individual IP series based on heavy and medium trucks and a
share of light trucks, has been separated into two individual series, one for medium and heavy trucks and the other
for business light trucks. Each of these series is based on monthly assemblies in units. The weight associated with
medium and heavy truck production in the index reflects the higher prices of these vehicles relative to prices for
light trucks.
Second, the separate series for metal barrels has been deleted because the Census Bureau eliminated
its quarterly Current Industrial Report for metal barrels. A single monthly series based on shipments of metal cans
now represents all of SIC 341—metal cans and shipping containers. The annual levels of this series are adjusted to
reflect production of cans, barrels, and other metal shipping containers.
Weights, Linking, and Utilization
The value-added proportions for 1987 and 1992 that are applied to the individual capacity indexes
when they are summed into aggregate indexes for the period since 1987 are the same weights that are used to •
combine series in the production index. The linking of each index to form a continuous time series expressed as a
percentage of 1987 output involves finding a constant, called a link factor, that shifts the level of the 1992-based
index to the level of the 1987-based index in the January 1992 link period. Output and capacity indexes for each
series are independently linked, and the link factor for each is independently calculated. For the most part, the link
factors for output and capacity are nearly the same. When they differ, such differences can affect the level of
utilization. In particular, linking tends to raise or lower utilization rates when the relative prices (and the
value-added weights) of series, such as computers, certain metals, or crude oil, change significantly.
To avoid any distortion of utilization rates caused by linking in January 1992, the level of linked
capacity in 1992 is raised or lowered relative to linked output so that the final utilization rate in 1992 is restored to
the appropriate, unlinked rate. The adjustment to capacity is then distributed evenly between the appropriate 1987
and 1992 levels so that the "correct" utilization rates are shown for the base years and no discontinuities in capacity
result.

Data Availability and Publication Changes
Diskettes containing either historical data (through 1985) or more recent data (1986 to those most
recently published in the G.17 statistical release) are availablefromPublications Services, Board of
Governors of the Federal Reserve System, Washington, DC 20551 (202-452-3245). Files containing the
revised data and the text and tablesfromthis release are also available through the Economic Bulletin
Board of the Department of Commerce; for information, call 202-482-1986,
A document with printed tables of the revised estimates of series shown in the G. 17 release is
available upon written request to the Industrial Output Section, Mail Stop 82, Division of Research and
Statistics, Board of Governors of the Federal Reserve System, Washington, DC 20551.




3

Industrial output, capacity, and utilization
Ratio scale, 1987 output = 100

145

Capacity
135
125

h

115

h

105

k

95 h-

85

75

1980

1982

1984

1986

1988

1990

1992

1994

Percent of capacity

90

—, 90

Utilization

85

80

H 75

70




J

1980

I

1982

L

J
1984

1986

1988

4

I
1990

1992

J

1994

L

70

Table 1
INDUSTRIAL PRODUCTION, CAPACITY AND UTILIZATION: 1987-19941
TOTAL INDUSTRY
Seasonally ad usted
Annual2

Jan.

Feb.

Mar.

Apr.

May

June

_ML

Aug.

Sep.

Oct.

Nov.

Dec.

Q1

Q2

Q3

-.3
.3
.3
-.5
-.5
-.3
.2
.0

1.4
.2
-.5
.5
-.9
.9
.6
.8

.4
.0
.9
.3
-1.0
.6
.1
.9

.5
.8
.0
-.7
.5
.5
.0
.1

.6
-.3
-.3
.7
.8
.5
-.2
.5

.9
.0
-.3
.2
.9
-.3
.3
.6

.4
.6
-1.0
-.2
.3
.9
.4
.2

.3
.6
.5
.3
.1
-.1
.2
.7

-.2
-.5
-.4
.0
.9
.2
.3
.0

1.3
.3
-.4
-.5
-.1
.6
.1
.6

.1
.6
.4
-1.3
.0
1.0
.9

.7
6
7
-4
_4
5
9

5.5
3.8
3.9
2.1
-6.1
.9
5.1
7.1

8.1
3.0
.3
1.1
1.7
5.8
.7
6.0

5.2
2.9
-4.4
1.6
6.3
3.4
3.3
5.0

Industrial
Production
1987
1988
1989
1990
1991
1992
1993
1994

96.5
103.2
106.6
105.5
104.0
104.9
110.6
114.7

97.9
103.4
106.2
106.1
103.1
105.8
111.3
115.6

98.2
103.4
107.1
106.4
102.1
106.4
111.4
116.6

98.8
104.3
107.1
105.7
102.6
106.9
111.4
116.7

99.4
104.0
106.7
106.5
103.5
107.5
111.1
117.4

100.3
104.0
106.4
106.7
104.4
107.2
111.5
118.0

100.6
104.6
105.3
106.5
104.7
108.1
112.0
118.2

100.9
105.2
105.8
106.8
104.8
108.0
112.2
119.1

100.7
104.7
105.4
106.8
105.7
108.2
112.5
119.1

102.1
105.0
105.0
106.3
105.6
108.8
112.7
119.8

102.2
105.6
105.4
105.0
105.6
109.9
113.7

102.8
106.3
106.1
104.5
105.2
110.4
114.7

97.5
103.3
106.6
106.0
103.1
105.7
111.1
115.7

99,5
104.1
106.7
106.3
103.5
107.2
111.3
117.4

100.8
104.8
105.5
106.7
105.1
108.1
112.2
118.8

102.3
105.6
105.5
105.3
105.5
109.7
113.7

100.0
104.4
106.0
106.0
104.3
107.6
112.0

Capacity
1987
1988
1989
1990
1991
1992
1993
1994

121.6
123.9
125.7
128.1
130.5
133.0
135.8
138.7

121.8
124.1
125.9
128.3
130.7
133.3
136.1
139.0

122.0
124.2
126.1
128.5
130.9
133.5
136.3
139.3

122.2
124.4
126.3
128.7
131.1
133.7
136.5
139.7

122.4
124.5
126.5
128.9
131.3
134.0
136.8
140.0

122.6
124.7
126.7
129.1
131.5
134.2
137.0
140.3

122.8
124.8
126.9
129.3
131.7
134.4
137.2
140.6

123.0
125.0
127.1
129.5
132.0
134.7
137.5
140.9

123.2
125.1
127.3
129.7
132.2
134.9
137.7
141.3

123.4
125.3
127.5
129.9
132.4
135.1
137.9
141.6

123.6
125.4
127.7
130.1
132.6
135.4
138.2

123.8
125.5
127.9
130.3
132.8
135.6
138.4

121.8
124.1
125.9
128.3
130.7
133.3
136.1
139.0

122.4
124.5
126.5
128.9
131.3
134.0
136.8
140.0

123.0
125.0
127.1
129.5
132.0
134.7
137.5
140.9

123.6
125.4
127.7
130.1
132.6
135.4
138.2

122.7
124.7
126.8
129.2
131.6
134.3
137.1

Utilization
1987
1988
1939
1990
1991
1992
1993
1994

79.3
83.2
84.8
82.4
79.7
78.8
81.5
82.7

80.3
83.3
84.3
82.7
78.9
79.4
81.8
83.2

80.5
83.2
84.9
82.8
78.0
79.7
81.7
83.7

80.8
83.8
84.8
82.1
78.3
80.0
81.6
83.6

81.2
83.5
84.3
82.6
78.8
80.3
81.2
83.8

81.8
83.4
83.9
82.6
79.4
79.9
81.4
84.1

81.9
83.8
83.0
82.4
79.5
80.4
81.6
84.1

82.0
84.2
83.3
82.5
79.4
80.2
81.6
84.5

81.8
83.7
82.8
82.4
80.0
80.2
81.7
84.3

82.7
83.8
82.3
81.8
79.8
80.6
81.7
84.6

82.7
84.2
82.5
80.7
79.6
81.2
82.3

83.1
84.6
82.9
80.2
79.2
81.5
82.9

80.1
83.3
84.7
82.6
78.9
79.3
81.7
83.2

81.3
83.6
84.3
82.5
78.8
80.0
81.4
83.8

81.9
83.9
83.0
82.4
79.6
80.3
81.6
84.3

82.8
84.2
82.6
80.9
79.6
81.1
82.3

81.5
83.7
83.7
82.1
79.2
80.2
81.7

Year
Industrial
Production,
Percent
Chang®
1987
1988
1989
1990
1991
1992
1993
1994

1. Estimates from August 1994 through October 1994 are subject to further revision in ih& upcoming monthly releases.
2. Annual averages of industrial production are calculated from not seasonally adjusted indexes.




5

Q4

6.5
3.0
-.2
-5.2
1.5
6.2
5.3 !

4.9
4.4
1.5
.0
-1.7
3.2
4.1

Table 2
INDUSTRIAL PRODUCTION, CAPACITY AND UTILIZATION: 1987-19941
MANUFACTURING
Seasonally ad usted
Annual2

Jan.

Feb.

Mar.

Apr.

May

June

July

Aug,

Sep.

Oct.

Nov.

Dec.

Q1

Q2

Q3

Q4

Industrial
Production,
Percent
Change
1987
1988
1989
1990
1991
1992
1993
1994

-.6
.2
.8
-.1
-.8
-.2
.5
-.3

1.7
.1
-.9
.9
-.9
1.0
.5
.8

.5
.2
.6
.4
-1.1
.7
.1
1.1

.4
.7
.2
-.9
.6
.4
.1
.3

.7
-.1
-.5
.5
.7
.5
-.2
.5

.9
.0
-.2
.0
1.0
-.2
.2
.3

.4
.5
-1.2
-.3
.4
.9
.5
.4

.0
.4
.4
.5
.2
.0
.1
.9

.2
.0
-.4
-.1
1.1
.1
.4
.0

1.0
.1
-.5
-.6
-.1
.5
.1
.7

.4
.9
.3
-1.2
-.1
1.1
1.1

.6
.6
.2
-.5
-.2
.4
1.1

6.3
3.6
4.3
3.7
-9.3
2.4
6.1
7.2

8.6
3.3
-.3
.2
1.3
6.0
1.3
7.3

5.6
3.0
-5.3
1.0
7.6
4.1
2.9
5.4

6.8
4.4
-1.3
-5.5
2.1
6.0
6.4

Industrial
Production
1987
1988
1989
1990
1991
1992
1993
1994

96.2
103.2
107.7
105.5
103.6
105.1
111.5
115.8

97.8
103.4
106.7
106.5
102.7
106.1
112.0
116.7

98.3
103.6
107.3
107.0
101.6
106.9
112.2
118.0

98.7
104.3
107.6
106.0
102.1
107.3
112.3
118.4

99.4
104.2
107.1
106.6
102.8
107.8
112.1
119.0

100.3
104.2
106.8
106.6
103.9
107.7
112.3
119.3

100.7
104.7
105.5
106.3
104.4
108.6
112.9
119.8

100.7
105.1
106.0
106.9
104.5
108.6
112.9
120.8

100.9
105.2
105.6
106.8
105.7
108.7
113.4
120.9

102.0
105.3
105.1
106.2
105.5
109.3
113.6
121.8

102.4
106.2
105.4
104.9
105.4
110.5
114.8

103.0
106.8
105.6
104.4
105.3
110.9
116.1

97.4
103.4
107.2
106.3
102.6
106.0
111.9
116.8

99.4
104.2
107.2
106.4
103.0
107.6
112.3
118.9

100.8
105.0
105.7
106.6
104.9
108.7
113.1
120.5

102.5
106.1
105.4
105.1
105.4
110.3
114.8

104.7
106.4
106.1
103.9
108.0
112.9

Capacity
1987
1988
1989
1990
1991
1992
1993
1994

121.2
124.1
126.5
129.4
132.1
134.9
138.2
141.6

121.5
124.3
126.7
129.6
132.3
135.2
138.5
142.0

121.7
124.5
127.0
129.8
132.5
135.5
138.8
142.3

121.9
124.7
127.2
130.1
132.8
135.7
139.1
142.7

122.2
124.9
127.4
130.3
133.0
136.0
139.3
143.1

122.4
125.1
127.7
130.5
133.2
136.3
139.6
143.4

122.7
125.3
127.9
130.7
133.5
136.6
139.9
143.8

122.9
125.5
128.2
130.9
133.7
136.8
140.2
144.2

123.2
125.7
128.4
131.2
133.9
137.1
140.4
144.5

123.4
125.9
128.7
131.4
134.2
137.4
140.7
144.9

123.7
126.0
128.9
131.6
134.4
137.7
141.0

123.9
126.2
129.2
131.8
134.6
137.9
141.3

121.5
124.3
126.7
129.6
132.3
135.2
138.5
142.0

122.2
124.9
127.4
130.3
133.0
136.0
139.3
143.1

122.9
125.5
128.2
130.9
133.7
136.8
140.2
144.2

123.7
126.0
128.9
131.6
134.4
137.7
141.0

122.6
125.2
127.8
130.6
133.4
136.4
139J

79.3
83.2
85.2
81.6
78.4
77.9
80.7
81.8

80.5
83.1
84.2
82.2
77.6
78.5
80.9
82.2

80.7
83.2
84.6
82.4
76.6
78.9
80.8
82.9

80.9
83.6
84.6
81.5
76.9
79.0
80.8
83.0

81.3
83.4
84.0
81.8
77.3
79.3
80.5
83.2

81.9
83.3
83.7
81.7
78.0
79.0
80.5
83.2

82.1
83.6
82.5
81.3
78.2
79.5
80.7
83.3

81.9
83.8
82.7
81.6
78.2
79.4
80.6
83.8

81.9
83.7
82.2
81.4
78.9
79.3
80.8
83.6

82.6
83.7
81.7
80.8
78.7
79.6
80.7
84.0

82.8
84.3
81.8
79.7
78.4
80.3
81.4

83.1
84.6
81.8
79.2
78.2
80.4
82.2

80.2
83.2
84.6
82.0
77.6
78.4
80.8
82.3

81.4
83.5
84.1
81.7
77.4
79.1
80.6
83.1

82.0
83.7
82.5
81.4
78.4
79.4
80.7
83.6

Year

Utilization
1987
1988
1989
1990
1991
1992
1993
1994

1. Estimates from August 1994 through October 1994 are subject to further revision in the upcoming monthly releases.
2. Annual averages of industrial production are calculated from not seasonally adjusted indexes.




6

82.8
84.2
81.7
79.9
78.4!
80.1 I
81.4

6.0

I

4.7
1.6
-.3

S -2.0
!
!

3.9
4.5

ioo.o

81.6
83.6
83.2
81.3
78.0
79.2
80.9

Table 3
RATES OF GROWTH IN INDUSTRIAL PRODUCTION, BY MAJOR MARKET GROUPS, 1990-19941
Difference between
revised and earlier indexes
(percentage nnintsj

Revised index
(percent)
1990

1991

1992

1993

1994

1990

1991

1992

1993

1994

-.2

.2

4.0

3.6

6.0

.0

.5

.8

-.6

-.5

-.4
-.1
-1.8
-6.3
-117
-5.4
.1

-.1
.6
2.5
5.4
5.3
5.4
1.8

4.3
4.6
3.4
6.5
11.9
2.3
2.6

2.9
2.8
2.1
8.2
11.5
5.4
.7

5.1
4.7
3.5
5.0
4.3
5.6
3.1

.0
.0
.0
.0
.0
.0
.0

.5
.7
.2
.4
.3
.5
.2

.4
.5
.2
.1
.2
.2
.2

-1.0
-1.0
.3
-.9
-1.1
-.5
.9

-.8
-1.3
-.7
1.2
2.3
.2
-1.2

2.3
3.0
-1.4
6.2
7.0
-2.2
-.9

-2.0
.8
-€.7
4.5
7.9
-5.3
-8.1

6.3
9.0
3.5
16.5
1.1
6.7
-6.0

3.9
6.9
6.0
10.6
-2.7
11.8
-9.8

6.5
10.0
9.9
13.6
-1.5
13.6
-11.5

.0
.0
.0
.0
.0
.0
.0

1.1
1.3
-.8
3.4
.2
-.5
.6

1.1
.3
-.1
.1
2.2
.4
4.3

-2.5
-3.0
1.8
-5.0
-4.4
1.2
-.3

-1.8
-1.4
-1.8
-2.5
2.3
2.1.
-^3.1

-1.6
-4.3
.2

-2.5
-3.6
-1.9

3.3
4.3
2.8

3.4
6.2
1.9

6.5
7.9
5.6

.0
.0
.0

.0
.9
-.7

.2
.9
-.1

-.7
.3
-1.1

.9
2.1
.1

.2
-1
.7
.2

.7
.9
.7
.2

3.7
6.2
2.1
-.1

4.6
7.4
4.0
-.9

7.5
10.2
5.3
3.1

.0
.0
.0
.0

.6
1.2
-.5
.3

1.5
2.8
.0
-.2

-.2
-.8
.2
.1

.0
-.3
-.1
.4

Total excluding:
Computer and office equipment

-.5

•~

3.4

3.1

5.7

Business equipment excluding:
Computer and office equipment

1.5

-.4

5.3

3.8

8.8

.3

.5

Item
Total index
Products, total
Final products
Consumer goods
Durable
Automotive products
Other durable goods
Nondurable
Equipment, total
Business equipment
Industrial
Information processing & related
Transit
Other
Defense and space equipment
Intermediate products
Construction supplies
Business supplies
Materials
Durable
Nondurable
Energy

JEECIALAgCREgATES
.•»

.0

1.1

.6

1.5

1. Growth rates are calculated as the percent change in the seasonally adjusted index from the fourth quarter of the previous year to the fourth
quarter of the year specified in the column heading. For 1994, the growth rates are calculated from the fourth quarter of 1993 to the third
quarter of 1994.




Table 4
RATES OF GROWTH IN INDUSTRIAL PRODUCTION, BY INDUSTRY GROUPS, 1990-19941

SIC

Item

1990

Revised index
(percent)
1992
1991

DIffefencelllBetweenl
revised and earlier indexes
(percentage points)
1991
1992
T993

1993

*"~!l994" •""''" 1990

.5

1994

-.2

.2

4.0

3.6

6.0

.0

.8

-.6

-.5

-.2

,2

4.6

4.2

6.6

.0

.5

1.0

-.8

-.6

Primary processing
Advanced processing

-1.2
.2

-.6
.6

3.8
5.0

5.1
3.7

5.6
7.1

.0
.0

.1
.7

1.0
1.0

.1
-1J

.3
-1.0

Durable
24
Lumber and products
25
Furniture and fixtures
Stone, day, and glass products 32

-.7
-8.5
-4.2
-3.3

.0
-.2
-1.0
-6.8

5.8
7.3
5.5
5.7

6.3
5.7
4.5
5.0

8.2
3.0
10.8
4.6

.0
.0
.0
.0

.9
-.9
.2
-.1

1.5
-1.1
1.8
.6

-1.4

.7

~1J
-.3

-.3
1.6
.3
2.3

33
Primary metals
Iron and steel
331,2
Raw steel
333-6,9
Nonferrous
34
Fabricated metal products
Industrial machinery
and equipment
35
Computer and office equip.
357
Electncal machinery
36

.9
2.9
5.6
-2.0
-3.0

-2.9
-5.2
-8.2
.6
-1.4

1.1
1.6
1.7
.3
4.5

6.8
8.2
5.9
5.1
4.9

5.1
1.2
-1.1
10.5
8.6

.0
.0
.0
.0
.0

.5
.0
.0
1.3
.9

.3
.3
.0
.1
3.5

-.7
-1.2
.0
.4
-.7

2.4
.7
.0
4.1
.1

1.7
11.0
-.2

-1.2
5.6
4.0

11.3
30.6
11.4

14.1
33.5
13.1

13.4
17.9
17.2

.0
.0
.0

1.5
3.6
1.5

-2.0
-1.2
6.2

-3.3
-.4
2.2

-2.4
-2.7
-.6

37
Transportation equipment
Motor vehicles and parts
371
Autos and light trucks
Aerospace and misc.
372-6,9
Instruments
38
39
Miscellaneous

-1.2
-7.2
-11.1
4.1
2.0
-1.1

1.2
10.2
12.7
-5.8
.7
.5

2.3
11.7
8.8
-6.3
.5
.6

.5
14.0
14.9
-14.4
-2.1
3.8

.1
3.9
1.4
-5.3
4.6
7.5

.0
.0
.0
.0
.0
.0

.6
.8
.4
.4
1.2
-.2

2.5
1.2
-2.4
3.7
.5
-.1

-3.1
-2.6
-2.1
-3.6
.7
1.7

1.0
.1
.7
2.1
.3
2.7

20
21
22
23
26

.4
1.7
.0
-5.2
-4.6
2.6

.5
.8
-12.1
5.6
5.9
1.8

3.2
1.9
10.0
4.4
.0
-.4

1.8
2.1
-15.5
1.4
-1.2
7.2

4.7
2.9
22.1
4.2
3.6
2.7

.0
.0
.0
.0
.0
.0

.0
-.2
-2.6
-1.1
1.5
.6

.4
.0
.3
-.7
-.1
-.5

.3
1.5
.0
-.2
.5
1.6

-.9
-1.3
1.7
-1.5
-1.0
-.9

27
28
29
30
31

-.7
1.4
-.1
.6
-7.5

-2.4
.5
-2.0
3.2
-5.7

2.1
4.4
3.3
8.4
5.3

-.2
3.0
2.5
6.0
-4.8

3.5
5.2
-1.4
9.8
-.3

.0
.0
.0
.0
.0

-.3
-.2
-1.1
2.0
-1.4

-1.0
1.1
-.2
3.5
5.2

-1.4
.7
-.1
1.2
-1.4

-1.0
-1.8
.7
-.3
.6

2.6
4.4
1.4
3.0

6

-3.1
.2
-2.5
-3.3
-5.1

.3
5.8
-.7
-.6
4.8

-.8
.7
-3.3
-.9
2.7

2.5
-4.4
9.2
1.4
5.7

.0
.0
.0
.0
.0

.3
-.3
.0
.2
2.4

.8
.7
.0
.5
4.2

.0
-5.8
-.1
.4
.7

1.0
3.8
.3
.7
2.3

-2.0
-.6
-6.8

2.6
1.5
6.8

1.9
1.9
1.9

1.1
.6
3.2

2.8
3.6
-.2

.0
.0
.0

.2
.3
-.1

.0
-.2
.6

.2
.2
.4

-.2
-1.0
2.4

-.6

.0

3.8

3.5

6.3

.0

A

1.2

-.1

-.1

Total index
Manufacturing

Nondurable
Foods
Tobacco products
Textile mill products
Apparel products
Paper and products
Printing and publishing
Chemicals and products
Petroleum products
Rubber and plastics products
Leather and products
Mining
Metal mining
Coal mining
Oil and gas extraction
Stone and earth minerals
Utilities
Electric
Gas

10
12
13 !
14 i
491,3pt
492,3pt

3PEaALAQQREOATES
i/tanufaeturing excluding:
Computer and office equipment

1. Growth rates are calculated as the percent change in the seasonally adjusted index from the fourth quarter of the previous year to the fourth
quarter of the year specified in the column heading. For 1994, the growth rates are calculated from the fourth quarter of 1993 to the third
quarter of 1994.




8

Table 5
RATES OF GROWTH IN CAPACITY, BY INDUSTRY GROUPS, 1990-1994 1

sic'

Item

1990

Revised index
(oercentt
1991
1992

1993

1994

1990

HDitference between
revised and earlier indexes
(DercentaaeDomts^
1991
1992
1993

1994

Total index

1-9

1.9

2.1

2.1

2,5

.0

.2

4

.2

.0

Manufacturing

2.1

2.1

2.4

2.4

2.9

.0

.2

.4

.2

.0

Primary processing
Advanced processing

1.7
2.2

1.2
2.5

1.4
2.9

1.4
2.8

1.8
3.3

:0
-.1

.1
.3

.4
.5

.3
.1

.7
-3

Durable
24
Lumber and products
25 I
Furniture and fixtures
Stone, day, and glass products 32

2.1
.6
2.2
.6

2.5
-.3
.9
.2

2.6
.3
1.6
.5

2.6
.7
2.4
1.0

3.3
1.3
2.7|
1.4 |

.0
.0
.0
-.1

.7
-.4
.2
-.1

.5
.1
.8
-.4

.0
.0
1.1
-.1

-.3
.6
1.4
.4

.0
.0
.0
.2
.0

.4
.0
.0
1.0
.5

.4
.0
-.4
.8
1.1

.6
.9
-1.7
.1
1.1

.8
1.3
-1.9
.1
1.1

Primary metals
33 |
Iron and steel
331,2
Raw steel
]
Nonferrous
333-6,9
Fabricated metal products
34
Industrial machinery
|
and equipment
35
Computer and office equip.
357
Electncal machinery
36

.6
.9
.0
.2
.3

-.6
-1.2
-1.6
.4
.4

-1.0
-2.3
-2.6
.7
.9

-.6
-1.0

-3.7
.0
.9

.3 !
.5
-2.7
-.1
.9

4.7
15.3
3.6

5.5
15.4
5.7

4.8
15.6
6.6

4.4
14.4
7.5

5.3
15.1
8.9

.0
.0
.0

.2
1.0
3.0

-.5
2.2
3.7

-1.5
.4
2.5

-<3.9
-5.9
2.1

Transportation equipment
37 !
Motor vehicles and parts
371 |
Autos and light trucks
Aerospace and misc.
372-6,9
Instruments
38
Miscellaneous
39

1.1
1.5
.8
.7
1.3
1.6

1.3
3.0
1.0
-.2
1.2
1.5

1.5
3.2
2.4
-.3
1.2
3.5

.5
2.5
.8
-1.6
1.3
3.2

1.4
3.9
3.4
-1.3
1.4
3.4

.1
.4
.0
-.1
.0
.0

.5
1.3
.0
-.1
-.1
-.2

-.5
-.3
-2.4
-.7
-.2
1.8

-.8
-1.1
-2.9
-.6
-.2
1.6

.3
-.5
-1.5
1.0
.1
2.0

20
21
22
23
26!

2.1
1.4
-.4
1.6
.1
3.0

1.7
1.9
-.5
.5
-.4
2.3

2.2
2.2
-.7
1.2
.9
1.9

2.2
2.2
1.0
1.7
.0
1.6

2.3
2.1
.7
2.0
.3
1.7

.0
.0
.0
.0
.0
.1

-.3
-.2
-.1
-.5
.1
-.1

.4
-.3
-.3
.2
1.7
.1

.5
-.3
1.4
.0
.8
.0

.4
-.7
1.0
.0
1.0
.2

27
28
29
30
31

2.9
2.6
.9
4.0
-3.5

1.3
2.6
-.8
3.5
-3.8

1.7
3.5
-1.3
4.4
-2.4

1.7
3.3
-.5
4.4
-2.7

1.3
3.6
-.4
4.6
-2.4

.0
.1
.0
.0
.0

-.3
-.3
.0
.1
-.3

1.0
.9
.0
1.1
1.2

1.0
.9
.0
1.4
1.1

.2
1.1
.0
1.8
1.7

10
12
13
14

-1.2
5.1
2.1
-2.6
-.1

-.3
2.3
2.1
-1.0
-.5

-1.1
2.5
1.0
-2.1
.5

-1.4
1.7
1.1
-2.4
.0

-.5
.8
1.1
-1.1
-.2

.2
-.2
.0
.4
.0

.3
.1
.0
.5
.0

-.1
.9
.0
-.2
.7

-.3
.2
.0
-.4
.1

.1
-1.7
.1
.4
-.4

2.4
3.2
.0

1.3

491,3pt
492,3pt

•1.8
.0

1.2
1.5
0

1.1
1.4
.0

1.2
1.4
.2

.0
.0
.0

-.1
.0
.0

.0
.0
.0

.1
.0
.0

-.1
-.2
.3

Total exdudina:
Computer and office equipment

1.5

1.5

1.8

1.8

2.2

Manufacturing excluding:
Computer and office equipment

1.6

1.6

2.1

2.1

2.5

.0

.2

.7

.5

.7

Nondurable
Foods
Tobacco products
Textile mill products
Apparel products
Paper and products
Printing and publishing
Chemicals and products
Petroleum products
Rubber and plastics products
Leather and products
Mining
Metal mining
Coal mining
Oil and gas extraction
Stone and earth minerals
Utilities
Electric
Gas

SPiCIALAQQREQATlES

1. Growth rates are calculated as the percent change in the seasonally adjusted index from the fourth quarter of the previous year to the fourth
quarter of the year specified in the column heading. For 1994, the growth rates are calculated from the fourth quarter of 1993 to the third
quarter of 1994.
Note—Primary processing manufacturing includes textile mill products, paper and products, industrial chemicals, synthetic materials, and
fertilizers, petroleum products, rubber and plastics products, lumber and products, primary metals, fabricated metals, and stone, clay, and glass
products. Advanced processing manufacturing includes foods, tobacco products, apparel products, printing and publishing, chemical products and
other agricultural chemicals, leather and products, furniture and fixtures, industrial and commercial machinery and computer equipment, electrical
machinery, transportation equipment, instruments, and miscellaneous manufactures.




9

Table 6
REVISED AND EARLIER CAPACITY UTILIZATION RATES, BY INDUSTRY GROUPS
Percent of capacity, seasonally adjusted
Revised index

Difference between
revised and earlier indexes
(percentage points)
19901991
1992
1993
Low
Q4
Q4

19671993
Ave.

1988' 1989
High

19901991
Low

1992
Q4

1993
Q4

1994
Q3

Total index

81.9

84.9

78.0

81.1

82.3

84.3

-.1

.6

.0

-.3

Manufacturing

81.2

85.2

76.6

80.1

81.4

83.6

.0

.7

-.1

-4

Primary processing
Advanced processing

82.3
80.7

89.0
83.5

77.9
76.2

82.8
79.0

85.8
79.7

88.1
81.8

-.2
.2

.5
.9

.4
-.2

.1
-6

Durable
Lumber and products
24
25
Furniture and fixtures
Stone, clay, and glass products 32

79.1
83.1
81.7
77.9

84.0
93.3
86.8
83.8

73.7
76.3
71.0
71.5

78.0
86.0
78.3
76.4

80.8
90.4
79.9
79.4

83.4
91.4
84.5
81.3

-.1
.2
-.6
-.1

1.1
-1.3
.7
.9

.1
-.7
-1.1
.8

.0
-.1
-1.8
1.9

80.0
79.7
79.3
80.8
77.3

92.8
95.7
92.7
88.7
82.0

74.0
72.1
71.4
75.0
71.8

81.9
82.3
82.1
81.4
76.6

88.0
90.0
90.3
85.6
79.7

91.0
90.1
91.1
92.3
84.1

-.4
.0
.0
-.8
-.2

-.3
.3
.3
-.9
2.1

-1.4
-1.6
1.9
-.7
.9

-.4
-2.0
3.2
1.8
.3

80.9
80.6
80.4

84.0
84.4
84.9

72.5
64.5
76.6

77.6
74.2
80.3

84.9
86.6
84.5

89.5
88.0
89.0

1.1
1.1
-.8

.4
-.2
.7

-.8
-.8
.4

.2
1.0
-1.2

75.0
75.7
75.7
82.1
75.5

84.4
85.1
89.1
88.4
81.2
80.1

70.2
57.6
53.3
79.4
76.7
73.5

75.6
75.9
75.8
75.3
77.4
73.4

75.6
84.4
86.4
65.5
74.7
73.8

74.7
84.1
84.6
63.5
76.5
75.9

-.3
.3
-.3
.9
.6
.6

2.5
1.0
-.1
4.1
1.5
-1.5

.8
.0
.8
1.3
2.1
-1.4

1.2
.4
2.1
1.9
2.3
-1.0

20
21
22
23
26

83.5
82.3
91.3
86.1
81.1
89.7

86.7
83.3
102.4
92.1
84.2
94.8

80.4
80.5
77.1
78.9
75.1
86.5

82.8
81.1
90.4
88.8
80.1
87.7

82.4
81.0
75.6
88.5
79.1
92.5

83.9
81.5
87.4
89.9
81.0
93.2

.0
-.3
-2.2
.4
.2
.2

.0
.2
-2.1
-1.2
-.4
.0

-.2
1.5
-2.9
-1.3
-.7
1.3

-1.0
1.2
-3.1
-2.3
-1.9
.6

27
23
29
30
31

86.3
80.0
85.5
83.9
82.0

92.3
85.9
88.5
90.5
83.8

78.7
78.9
83.7
78.4
74.7

80.2
80.9
89.1
86.1
84.1

78.7
80.7
91.8
87.5
82.4

80.0
81.6
91.1
90.6
83.6

.2
-.4
-.8
.1
-1.7

-1.5
.1
-1.2
3.5
2.2

^3.5
-.1
-1.4
3.4
.2

-4.3
-1.8
-.9
2.2
-.5

10
12
13
14

87.3
78.2
86.9
88.0
84.2

86.5
87.9
91.4
86.1
90.0

86.0
80.6
82.9
86.8
79.4

87.6
85.9
83.1
89.1
84.3

88.1
85.1
79.5
90.5
86.6

89.9
81.9
84.2
91.9
90.5

-.8
.6
.0
-1.1
1.6

.1
.0
.0
-.8
48

.3
-^5.1
-.1
-.1
5.4

.9
-1.3
-1
.1
7.3

491,3pt
492,3pt

86.7
88.8
82.5

92.6
94.8
85.5

83.2
86.5
68.3

86.4
88.1
80.4

86.5
87.4
82.9

87.5
88.9
82.6

.1
.2
.0

.2
.1
.3

.4
.3
.6

.3
-.2
1.9

Jot®! excluding:
Computer ana office equipment

81.6

85.0

78.3

81.1

82.1

84.2

-2

Manufacturing excluding:
Computer and office equipment

80.9

85.3

77.0

80.3

81.4

83.5

-.1

item

SIC

Primary metals
33
Iron and steel
331.2 I
Raw steel
Nonferrdus
333-6,9 1
Fabricated metal products
34
Industrial machinery
and equipment
35
Computer and office equip.
357'
Electncal machinery
36 |
Transportation equipment
37!
Motor vehicles and parts
371 I
Autos and light trucks
Aerospace and misc.
372-6,9 |
Instruments
38
39
Miscellaneous
Nondurable
Foods
Tobacco products
Textile mill products
Apparel products
Paper and products
Printing and publishing
Chemicals and products
Petroleum products
Rubber and plastics products
Leather and products
Mining
Metal mining
Coal mining
Oil and gas extraction
Stone and earth minerals
Utilities
Electric
Gas

1994
Q3

SPECIAL AGQREQATES
-.3
.6

.2

1. Series begins in 1977.
Note—The "high" columns refer to periods in which utilization generally peaked; the low" columns refer to recession years in which utilization
generally bottomed out. The monthly highs and lows are specific to each series, and ail did not occur in the same month.




10

-.3

Table 7
VALUE ADDED AND ANNUAL PROPORTIONS IN INDUSTRIAL PRODUCTION, BY INDUSTRY GROUPS
Revised
1992
1992
value-added
IP
proportion
index

Previous
1992
_
IP
proportion

IP
proportion

100.0

100.0

100.0

100.0

100.0

107.6

100.0

84.3

84.5

84.9

84.3

85.5

108.0

85.9

Primary processing
Advanced processing

27.1
57.1

26.4
58.1

26.3
58.6

27.1
57.1

26.5
59.0

104.6
109.7

26.5
59.3

Durable
Lumber and products
24
Furniture and fixtures
25
Stone, clay, and glass products 32

46.5
2.1
1.5
2.4

46.7
1.9
1.3
2.2

47.9
1.9
1.4
2.1

46.5
2.1
1.5
2.4

45,1
2.0
1.4
2.1

109.3
95.8
99.1
95.3

46.0
2.0
1.4
2.1

Primary metals
33
Iron and steel
331,2
Raw steel
Nonferrous
333-6,9
Fabricated metal products
34
Industrial machinery
and equipment
35
Computer and office equip.
357
Electncal machinery
36

3.3
1.9
.1
1.4
5.4

3.2
1.9
.1
1.3
4.9

3.2
1.9
.1
1.3
4.9

3.3
1.9
.1
1.4
5.4

3.1
1.7
.1
1.4
5.0

101.9
105.1
101.2
97.6
98.8

3.1
1.8
.1
1.3
5.1

8.5
2.3
6.9

9.9
3.7
7.5

11.1
4.7
8.0

8.5
2.3
6.9

7.9
1.7
7.3

124.6
172.8
121.9

8.6
2.2
8.0

Transportation equipment
37
Motor vehicles and parts
371
Autos and light trucks
Aerospace and misc.
372-6,9
Instruments
38
Miscellaneous
39

9.9
4.8
2.5
5.1
5.1
1.3

9.6
4.8
2.4
4.8
5.1
1.3

9.3
5.2
2.6
4.1
4.8
1.2

9.9
4.8
2.5
5.1
5.1
1.3

9.6
4.8
2.5
4.8
5.4
1.3

105.1
107.4
101.9
103.0
106.3
106.3

9.3
5.2
2.7
4.1
5.2
1.3

20
21
22
23
26

37.8
8.8
1.0
1.8
2.3
3.6

37.8
8.9
1.0
1.8
2.0
3.7

37.0
8.6
.8
1.8
2.0
3.7

37.8
8.8
1.0
1.8
2.3
3.6

40.5
9.4
1.6
1.8
2.2
3.6

106.5
107.0
96.5
103.9
95.0
108:9

39.9
9.3
1.4
1.7
2.1
3.6

27
28
29
30
31

6.5
8.8
1.3
3.2
.3

6.1
9.4
1.3
3.3
.3

6.0
9.3
1.3
3.4
.2

6.5
8.8
1.3
3.2
.3

6.8
9.9
1.4
3.5
;3

97.2
114.7
102.1
115.6
89.0

6.6
9.9
1,4
3.6
.3

10
12
13
14

8.0
.3
1.2
5.8
.7

7.4
.5
1.3
5.1
.6

7.0
.5
1.2
4.8
.6

8.0
.3
1.2
5.8
.7

6.8
.4
1.0
4.7
.6

98.9
163.8
108.2
93.2
99.0

6.5
.4
.9
4.5
.6

7.7
6.1
1.6

8.1
6.4
1.7

8.1
6.3
1.7

7.7
6.1
1.6

7.7
6.1
1.6

111.9
111.7
112.7

7.7
6.1
1.6

__

Item

SIC

Total index
Manufacturing

Nondurable
Foods
Tobacco products
Textile mill products
Apparel products
Paper and products
Printing and publishing
Chemicals and products
Petroleum products
Rubber and plastics products
Leather and products
Minina
Metai mining
Coal mining
Oil and gas extraction
Stone and earth minerals
Utilities
Electric
Gas




491,3pt !
492,3pt

value-added
proportion

1993
_____

11

1987
value-added
proportion

1993
IP
proportion

Explanatory Note.
The statistical release of Industrial Production and Capacity Utilization reports
measures of output, capacity, and capacity utilization in manufacturing, mining, and
the electric and gas utilities industries. It also includes survey data on the use of
electric power in manufacturing and mining. Data in the release are available on-line
on the day of issue through the Economic Bulletin Board of the Department of
Commerce. For information, call (202) 482-1986. Diskettes containing historical
data and the data published in this release are available from the Board of Governors
of the Federal Reserve System, Publications Services, (202) 452-3245.
Industrial

Production

Coverage. The industrial production (IP) index measures output in the
manufacturing, mining, and electric and gas utilities industries. For the period since
1987, the total IP index has been constructed from 255 individual series based on the
3987 Standard Industrial Classification (SIC). These individual series are classified
and grouped in two ways: (1) market groups (shown in table 1), such as consumer
goods, equipment, intermediate products, and materials; and (2) industry groups
(shown in tables 2 and 6), such as two-digit SIC industries and major aggregates of
these industries—for example, durable and nondurable manufacturing, mining, and
utilities.
Market groups. For purposes of analysis, the individual IP series are grouped into
final products, intermediate products, and materials. Final products are assumed to be
purchased by consumers, businesses, or government for final use. Intermediate
products are expected to become inputs in nonindustrial sectors, such as
construction, agriculture, and services. Materials are industrial output requiring
further processing within the industrial sector. Total products comprise final and
intermediate products, and final products are divided into consumer goods and
equipment.
Timing. The first estimate of output for a month is published around the 15th of the
following month. The estimate is preliminary (denoted by the superscript Mp" in
tables) and subject to revision in each of the subsequent three months as new source
data become available. (Revised estimates are denoted by the superscript V in
tables.) After the fourth month, indexes are not revised further until the time of an
annual revision or a benchmark revision. The last three benchmark revisions were
published in 1990,1985, and 1976. In 1993, a revision that converted the indexes to
the 1987 SIC from 1987 forward was published.
Source data. In annual or benchmark revisions, the individual IP indexes are
constructed from a variety of source data, such as the quinquennial Censuses of
Manufactures and Mineral Industries and the Annual Survey of Manufactures.
prepared by the Bureau of the Census; the Minerals Yearbook* prepared by the
Bureau of Mines; and publications of the Department of Energy. On i monthly basis,
the individual indexes of industrial production are constructed from two main types
of source data: (i) output measured in physical units and (2) data on inputs to the
production process, from which output is inferred. Data on physical products, such as
tons of steel or barrels of oil, are obtained from private trade associations as well as
from government agencies including those listed above; data of this type are used to
estimate monthly IP where possible and appropriate. When suitable data on physical
product are unavailable, estimates of output are based on eidier production--worker
hours or electric power use by industry. Data on hours worked by production workers
are collected in the monthly establishment survey conducted by the Bureau of Labor
Statistics. The data on electric power use are described below. The factors used to
convert inputs into estimates of production arc based on historical relationships
between the inputs and the comprehensive data used to benchmark the IP indexes;
these factors also may be influenced by technological or cyclical developments.
Especially for the first and second estimates for a given month, the available source
data are limited and subject to revision.
Weights. In the index, series that measure the output of an individual industry are
weighted according to their proportion in the total value-added output of all
industries. The industrial production index, which extends back to 1919, is built in
chronological segments that are linked together to form a continuous index
expressed as a percentage of output in a comparison base year (currently 1987). Each
segment, which usually spans five years, is a Laspeyres quantity index showing
changes in quantities with prices (Census value added per unit of output) held at
base-year values for the segment For the period from 1992 to the present, IP is
aggregated on the basis of 1992 value-added weights. Hie aggregation of the index
for the 1987-91 period is based on 1987 weights, whereas 1982 weights are used for
the 1982-86 period. The other weight years in the postwar period are 1977,1972,
1967,1963,1958,1954, and 1947. Hie 1992 value-added weights used to aggregate
the index, as well as the previous and revised annual proportions in IP for recent
yeare, are shown in table 7 of this release.
Seasonal adjustment. Individual series are seasonally adjusted by the X-l 1ARIMA
method, developed at Statistics Canada. For series based on production-worker
hours, the current seasonal factors were estimated with data through October 1994;
for other series, the factors were estimated with data through at least June 1994. In
some cases, series were preadjusted for the effects of holidays or the business cycle
before using X~ll ARIMA. The seasonally adjusted total index is calculated by
aggregating the seasonally adjusted major market groups, mid may not precisely
equal an aggregation of the seasonally adjusted industry groups.

12


Reliability. The average revision to the \gvgl of the total IP index, without regard to
sign, between the preliminary estimate and its third revision (or from the firstand the
fourth estimates) was 0.35 percent during the 1972-92 period. The average revision
to the percent change in total IP, without regard to sign, from the first to the fourth
estimates was 0.26 percentage point during the same period. In most cases (about 85
percent), the direction of change in output indicated by the first estimate for a given
month is the same as that shown by the fourth estimate.
Rounding. In some cases, components may not add to totals because of independent
rounding. In addition"; the published percent 'changes are calculated from unrounded
indexes, and may not be the same as percent changes calculated from the rounded
indexes shown in the release.
References. Industrial Production—-1986 Edition contains a more detailed
description of the methods used to compile the index, plus a history of its
development, a glossary of terms, and a bibliography. To obtain Industrial
Production—J 986 Edition ($9.00 per copy), write to Board of Governors of the
Federal Reserve System, Publications Services, Washington, DC 20551. The 1990
and 1993 revisions were described in the Federal Reserve Bulletin, vol. 76 (April
1990), pp. 187-204 and vol. 79 (June 1993), pp. 590-605, respectively. The early
1994 revision to the index was described in the Federal Reserve Bulletin, vol 80
(March 1994), pp. 220-6. This revision to the index will be described in a
forthcoming Federal Reserve Bulletin.
Capacity

Utilization

Definition. Capacity utilization is calculated for the manufaauring, mining, and
electric and gas utilities industries. For a given industry, the utilization rate is equal to
an output index divided by a capacity index. Output is measured by seasonally
adjusted indexes of industrial production. The capacity indexes attempt to capture
the concept of sustainable practical capacity, which is defined as the greatest level of
output that a plant can maintain within the framework of a realistic work schedule,
taking account of normal downtime, and assuming sufficient availability of inputs to
operate the machinery and equipment in place, t h e 75 individual capacity indexes
are based on a variety of data, including capacity data measured in physical units
compiled by trade associations, surveys of utilization rates and investment, and
estimates of growth of the capital stock.
Groups. Estimates of capacity and utilization are available for a variety of groups,
including primary and advanced processing industries within manufacturing,
durable and nondurable manufacturing, total manufacturing, mining, utilities, and
total industry. Component industries of the primary and advanced processing groups
within manufacturing are listed in the note on tables 2 md 3 of the release,
Weights. Value-added proportions are used to weight the individual capacity
indexes in aggregations in the same manner as individual IP series are aggregated to
the total index of industrial production. Although each utilization rate is the result of
dividing an IP series by a corresponding capacity index, aggregate utilization rates
are equivalent to combinations of individual utilization rates aggregated with
proportions that reflect current capacity levels of output valued in base-period
value-added per unit of actual output.
Perspective. The historical highs and lows in capacity utilization shown in the tables
above are specific to each series and did not all occur in the same month. Industrial
plants usually operate at capacity utilization rates that are well below 100 percent:
none of the broad aggregates has ever reached 100 percent For total industry and
total manufacturing, utilization rates as high as 90 percent have been exceeded only
in wartime.
References. The b&sic methodology used to estimate capacity and utilization is
discussed in the Federal Reserve Bulletin, vol 71 (October 1985), pp. 754-66. The
1990 and 1993 revisions were described in the Federal Reserve Bulletin, vol. 76
(June 1990), pp. 412-35 and vol. 79 (June 1993), pp. 590-605, respectively. The
early 1994 revision to the index was described in the Federal Reserve Bulletin, vol.
80 (March 1994), pp. 220-6. This revision to the index will be described in a
forthcoming Federal Reserve Bulletin.
BUetric

Power

Data on electric power (expressed in kilowatt hours) are collected by the Federal
Reserve District Banks from electric utilities and also from manufacturing and
mining establishments that generate electric power for their own use (cogenerators).
The indexes of power use shown in table 9 are sums of kilowatt hours used by an
industry or industry group expressed as a percentage of that industry's or group's
usage in 1987. The first column of the table shows, for reference, electric power use
in billions of kilowatt hours as reported by manufacturing and mining industries in
the 1987 censuses of those industries. The supplementary group, "Total, less nuclear
nondefense," is shown separately because the nondefense nuclear material series
(part of SIC 2819) accounts for a disproportionately large part of total electric power
use. Because the value-added proportion for this industry in total IP is considerably
smaller than its share of total electric power use, excluding this component from total
power use facilitates comparisons with total IP.
Release Schedule for late 1994 and 1995
At 9:15 a.m. on December 14,1994, January 17,1995, February 15, March 15, April
14, May 16, June 15, July 14, August 15, September 15, October 17, November 15,
and December 14.







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Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102