View original document

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

FEDERAL RESERVE statistical release

'4
'•

G.17 (419)

•

•

c

Ror release at 9:15 a.m. (EST)
November 30,1995

INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION (ANNUAL REVISION)
The Federal Reserve's index of industrial production (IP) and its related measures of capacity and
utilization for January 1991 onward have been revised. This revision has lowered growth in the total IP index for
1993 and raised it for 1994. For 1995, the level of the revised total IP index is, on balance, about the same as
previously reported. Capacity growth has been revised upward a fraction of a percentage point so that the rate of
capacity utilization last summer is now estimated to be slightly lower than was previously reported. The latest data
continue to paint the same broad picture of recovery in industrial activity from the 1990 recession through 1994,
followed by a slowdown in early 1995 (chart 1). The weights used since 1992 to aggregate the series continue to
be proportions based on value added by industries in 1992. The production and capacity indexes continue to be
expressed as percentages of output in 1987.
Revised monthly, quarterly, and annual data for total industry and for manufacturing are shown on
tables 1 and 2. For the third quarter of 1995, the revised production index is 122.5 percent of output in 1987, the
same as reported previously. The revised capacity index is 146.4 percent of output in 1987, compared with
145.8 percent reported previously. As a result, the rate of capacity utilization—the ratio of production to
capacity—has been revised downward 0.4 percentage point, to an estimated 83.6 percent in the third quarter of
1995.
The new estimates of production incorporate additional or updated figures from the 1992 Census of
Manufactures, preliminary results of the 1993 Annual Survey of Manufactures, annual physical data on mining for
1994, annual data for 1994 reported in selected Current Industrial Reports published by the Bureau of the Census,
and updated monthly source data. Seasonal factors based on the X-l 1 ARIMA model were calculated through
mid-1995, and the productivity relationships that are applied to input-based estimates were updated.
The IP index now shows slower growth in 1993 and faster growth in 1994 (table 3). The downward
revision to IP growth for 1993 is largely a result of incorporating the data from the Annual Survey of
Manufactures. The faster growth now shown for 1994 is due to the new annual and monthly data. Despite
noticeable changes in some component series, the indexes for the output of business equipment and durable
materials continue to show the strong upward trends beginning in 1991 (chart 2). The indexes for consumer
durables and construction supplies still show a substantial falloff from the beginning of 1995, although the
production of consumer durables is now estimated to have dropped from a higher level.
Among the major industry groupings, the bulk of the revisions to 1993 and 1994 were concentrated in
manufacturing (table 4). Most notably, the growth in output of computer and office equipment was revised down
sharply in 1993 and raised significantly in 1994 and 1995. Elsewhere, noticeable downward revisions to growth in
1993 occurred in electrical machinery and chemicals. Growth rates for these industries were revised up in 1994.
The small downward Revision to growth in 1995 reflected sizable revisions to both mining and utilities as well as a
slight reduction in the growth in manufacturing.
The revisions to capacity and utilization incorporate the new IP indexes, preliminary survey data on
manufacturing utilization rates (typically at the two-digit level) for the fourth quarters of 1993 and 1994 from the




1. Industrial production, capacity, and utilization
Ratio scale, 1987 output = 100
—| 160

160
Revised
Previous
150

H 150

140

140
Capacity

130

130

125

125

120

120

115

115

Production

110

110

105

105

100

100

95

95

90
1985

1986

J

1987

L

1988

J

1989

L__L
1990

1991

J

1992

1993

J

I

1994

1995

L

90
1996

Percent of capacity

86

86

Utilization
84

84

82

-H 82

80

80

78

78

76

1985

rT1986




4987

J 1988 I1989

1 9 . , , 1991
90,,

J

L

1992

1993

J

1994

1995

L

f996

76

Bureau of the Census, and updated information on physical capacity and utilization in selected industries for 1994
and 1995 as reported mainly by trade associations. For most manufacturing industries, the annual growth in the
capacity estimates is related to the growth in the industry's capital input. The revised capital input estimates
incorporate investment data from the 1993 Annual Survey of Manufactures and updated results from the 1995
Investment Plans Survey by the Bureau of the Census.
Annual growth in industrial capacity has been revised up a bit over the 1991-95 period. As before,
sharp increases in actual and planned investment spending led to an estimated acceleration of capacity growth in
1994 and 1995. The upward revision occurred in 1994 and was concentrated in durable goods manufacturing,
notably for steel, motor vehicles and parts, and office and computing equipment (table 5). Survey results suggest
that operating rates in the computer industry were much lower than those previously estimated and, given the
revised estimates for production, imply that capacity growth was much higher. Among nondurable goods, capacity
growth was revised upward for textiles, apparel, and paper products but was revised downward for chemicals and
products.
As a result of the revisions to the production and capacity indexes, capacity utilization—the ratio of
output to capacity—is a fraction of a percentage point lower than the earlier estimate for 1993-1995 (table 6). For
the third quarter of this year, capacity utilization in manufacturing is 82.7 percent, 0.3 percentage point lower than
the rate previously reported. Besides the large downward revision in utilization for computers, downward revisions
occurred for plastics materials and electrical machinery industries. Within manufacturing, the downward revision
to utilization is sizable both for durable manufacturing and for advanced-processing industries. Among
primary-processing industries, operating rates were altered little, on balance, in 1994 and 1995; upward revisions to
primary metals and to petroleum products offset downward revisions in other categories.
Capacity and utilization estimates for mining are little changed overall. The utilization rate for
utilities was raised largely because the North American Electric Reliability Council reported slower growth in
generating capacity. The strong demand for electricity to operate air conditioners during last summer's heat wave
raised the operating rate at electric utilities to a relatively high level.
TECHNICAL ASPECTS OF THE REVISION
The revision to the IP index and measures of capacity involved some small modifications to
value-added weights, changes in series structure, and updated capital measures.
Weighting of the Indexes
To combine individual series into market or industry aggregates, the individual indexes are multiplied
by their proportionate contribution to industrial value added in 1992. As in the revision a year ago, the 1992
Census of Manufactures and the 1992 Census of Mineral Industries were used for 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.
Although the overall 1992 value-added weights were essentially unchanged in this revision, the
weights of some series were modified to reflect small revisions to value added as initially reported in the 1992
preliminary Census of Manufactures and Mineral Industries. In addition, weights for detailed series (typically
product series or series split according to market group) below the four-digit Standard Industrial Classification
(SIC) level were adjusted to reflect some data, not available for the previous revision, on the 1992 value of
product.
This revision updates the supplementary series on the gross value of products. The gross value series
are derived from production indexes for products, and they exclude materials series to avoid double counting.
Formerly in 1987 dollars, the gross value series are now expressed in 1992 dollars. The dollar weights that are
applied to individual manufacturing series are derived from the value of products figures from the 1992 Census of
Manufactures.
3



Changes in Series Structure
The series structure of the index of industrial production, which now comprises 260 individual series,
remains basically the same. To improve coverage and reliability, a net of five series were added and source data for
three other series were modified. With the changes, the proportion of IP series derived from physical product data
rises, in 1992 value-added terms, 2 percentage points, to 41 percent.
Industrial organic chemicals (SIC 286), formerly an input-based series, is now derived from quarterly
production data, reported by the National Petroleum Refiners Association. These data cover major petrochemicals,
such as benzene, ethylene, propylene, and styrene.
The service industry machines industry (SIC 358) was formerly represented by three unpublished
series. Now, the industry's largest four-digit component, heating and refrigeration equipment (SIC 3585), is shown
separately and constructed from six individual IP series, four of which are new. The following measures have been
added to the series on room air conditioners and unitary air conditioners: (1) an estimate of air conditioners for
motor vehicles that uses motor vehicle assemblies as a monthly indicator and that is based on the annual output in
units reported by the Census Bureau, (2) an index for warm air furnaces based on data in units reported by the Gas
Appliance Manufacturers Association, (3) an estimate of commercial heating and cooling equipment developed
from annual output in units reported by the Census Bureau; and (4) an estimate of compressors, condensers, and
other parts for heating and cooling equipment (including home appliances) based on unit output of the assembled
equipment.
Plumbing and heating products (SIC 343), which had been covered by one input-based series, has
been split into three series. They are plumbing fixtures (SIC 3431,2), which is based on monthly kilowatt hours,
and two series that cover SIC 3433: (1) boilers, unit heaters, and furnaces, except warm air, a series based on units
reported by the Gas Appliance Manufacturers Association, and (2) burners and parts for boilers, water heaters, and
furnaces, a series based on source data for related IP indexes
The monthly series on household audio and video equipment (SIC 3651) is now based solely on units
of direct-view color television sets, with screens that measure at least 19 inches as reported by the Electronic
Industries Association, less comparable imports. Monochromatic TVs and smaller color TVs are no longer
produced in the United States.
Formerly, the output of carpets (SIC 227) was represented by two series based on shipments of woven
and tufted carpets. Because the Carpet and Rug Institute has discontinued issuing data on woven carpets, this
small series has been dropped. In the IP index, the carpet industry is now represented only by production of tufted
carpets, which accounts for the bulk of carpet output.
Revised Electric Power Data
Monthly data on sales of electric power to three-digit industry groups, along with estimates of the
trends in output per kilowatt-hour, are used to indicate the monthly change in output for many individual industrial
production series. Revised data on the sales of electric power to industries since 1990 have been introduced in this
revision. Seasonal factors for the electric power data were reestimated, based on data through March 1995. These
kilowatt-hour data are part of a major revision of the electric power series back to 1972. The new estimates more
accurately account for cogeneration and are benchmarked to electric power use reported in the Census and Annual
Survey of Manufactures. Following the completion of review and documentation, the revised electric power series
will be published in a supplement to Industrial Production and Capacity Utilization, Federal Reserve Statistical
Release, G. 17.
Updated Capita! Measures
Although the basic methodology used by the Federal Reserve to estimate capacity and utilization
remains essentially the same, the capital measures used to calculate many series on manufacturing capacity have
been reconfigured. Formerly, the real net stocks of diverse assets, such as computers, metalworking machinery,
and industrial buildings, were summed to obtain an industry's total net capital stock. In this revision, a different
4



method of aggregation was used to estimate industry capital input. The new capital input measures are calculated
using a Tornqvist index number formula. This formula weights growth rates in the net stocks of individual assets
by an estimate of that asset's share of the aggregate marginal product of the industry's capital. l

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 available from Publications Services, Board of
Governors of the Federal Reserve System, Washington, DC 20551 (202-452-3245). Files containing the
revised data and the text and tables from this 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 will
be sent to subscribers to the release. It is also 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.

1. This method is the similar to the one used by the Bureau of Labor Statistics to calculate multifactor productivity. The
BLS capital input measures are documented in appendix C of Trends in Multifactor Productivity, 1948-81, Bulletin 2178
(U.S. Department of Labor, Bureau of Labor Statistics, 1983). For an early application of this method, see L. R.
Christensen and D. W. Jorgenson, "The Measurement of U.S. Real Capital Input, 1929-67," Review of Income and Wealth,
Series 15, (December 1969), pp. 293-320.
5



2. Industrial production by market group
Durable Materials

Business Equipment
Index, 1987=100

Index, 1987=100
170

170
H 160

h

H 160

H 150

H 150

H 140

h

H 140

H 130

H 130

H 120

H 120

h

H 110

H 110

100
1989

1991

1993

100

1995

Consumer Durables

1989

1991

1993

Construction Supplies
Index, 1987=100

H 125

Index, 1987=100

H 125

h

H 115

H 115

H 105

1991




1993

h-

H 95

1989

1995

h

1995

1989

6

H 105

1991

1993

1995

Table 1
INDUSTRIAL PRODUCTION, CAPACITY AND UTILIZATION: 1983-19951
TOTAL INDUSTRY
Seasonally adjusted
Jan.

Feb.

Mar.

Apr.

May

June

.3
.3
-.5
-.5
-.1
.3
.4
.3

.2
-.5
.5
-1.0
.6
.4
.8
-.1

.0
.9
.3
-.8
.9
.0
.8
.1

.8
.0
-.7
.3
.7
.2
.3
-.4

-.3
-.3
.7
.8
.5
-.5
.5
.0

.0
-.3
.2
1.1
-.3
.2
.5
.1

.6
-1.0
-.2
.2
.8
.6
.2
.1

.6
.5
.3
.3
-.2
.0
.5
1.1

Industrial
Production
1988
1989
1990
1991
1992
1993
1994
1995

103.2
106.6
105.5
104.0
105.0
110.4
114.6
121.8

103.4
106.2
106.1
102.9
105.6
110.8
115.5
121.7

103.4
107.1
106.4
102.1
106.5
110.8
116.4
121.9

104.3
107.1
105.7
102.4
107.3
111.1
116.8
121.4

104.0
106.7
106.5
103.2
107.8
110.6
117.5
121.3

104.0
106.4
106.7
104.3
107.5
110.8
118.1
121.4

104.6
105.3
106.5
104.5
108.4
111.4
118.4
121.5

Capacity
1988
1989
1990
1991
1992
1993
1994
1995

123.9
125.7
128.1
130.5
132.9
135.8
138.7
143.2

124.1
125.9
128.3
130.7
133.2
136.0
139.1
143.6

124.2
126.1
128.5
130.9
133.4
136.3
139.5
144.1

124.4
126.3
128.7
131.1
133.6
136.5
139.8
144.5

124.5
126.5
128.9
131.3
133.9
136.7
140.2
145.0

124.7
126.7
129.1
131.5
134.1
137.0
140.5
145.5

83.2
84.8
82.4
79.7
78.9
81.3
82.6
85.1

83.3
84.3
82.7
78.7
79.3
81.5
83.0
84.7

83.2
84.9
82.8
78.0
79.9
81.4
83.5
84.6

83.8
84.8
82.1
78.1
80.3
81.4
83.6
84.0

83.5
84.3
82.6
78.6
80.5
80.9
83.8
83.7

83.4
83.9
82.6
79.3
80.2
80.9
84.0
83.5

Year
Industrial
Production,
Percent
Change
1988
!.
1989
1990
1991
1992
1993
1994
1995

Utilization
1988
1989
1990
1991
1992
1993
1994
1995

- ^ . ^Sep^

01

Q2

Q3

Q4

Annual2

.6 ! 3.8
.7
3.9
-.4
2.1
-.5
-8A
.2
.8
.9
3.7
.8
8.4
3.9

3.0
.3
1.1
1.1
7.0
.5
7.0
-1.4

2.9
-4.4
1.6
6.7
3.1
3.2
4.6
3.6

3.0
-.2
-5.2
2.0
4.9
5.5
6.4

4.4
1.5
.0
-1.8
3.4
3.5
5.9

103.3
106.6
106.0
103.0
105.7
110.7
115.5
121.8

104.1
106.7
106.3
103.3
107.5
110.8
117.5
121.4

104.8
105.5
106.7
105.0
108.3
111.7
118.8
122.5

105.6
105.5
105.3
105.5
109.7
113.2
120.6

104.4
106.0
106.0
104.2
107.7
111.5
118.1

125.5
127.9
130.3
132.7
135.5
138.4
142.8 |

124.1
125.9
128.3
130.7
133.2
136.0
139.1
143.7

124.5
126.5
128.9
131.3
133.9
136.7
140.2
145.0

125.0
127.1
129.5
131.9
134.6
137.5
141.3
146.4

125.4
127.7
130.1
132.5
135.3
138.2
142.4

124.7
126.8
129.2
131.6
134.2
137.1
140.8

84.6!
82.9
80.2
79.2
81.2
82.4
85.1

83.3
84.7
82.6
78.8
79.4
81.4
83.0
84.8

83.9
83.0
82.4
79.6
80.5
81.2
84.1
83.6

84.2
82.6
80.9
79.6
81.0
81.9
84.7

83.7
83.7
82.1
79.2
80.3
81.4
83.9

Oct.

Nov.

-.5
-.4
.0
.8
.2
.7
.1
.1

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

.6
.4
-1.3
-.1
.6
.7
.5

105.2
105.8
106.8
104.8
108.2
111.4
118.9
122.9

104.7
105.4
106.8
105.7
108.4
112.2
119.1
123.0

105.0
105.0
106.3
105.8
109.2
112.3
119.9
122.5

105.6
105.4
105.0
105.6
109.8
113.1
120.5

106.3
106.1
104.5
105.1
110.0
114.1
121.5

124.8
126.9
129.3
131.7
134.3
137.2
140.9
145.9

125.0
127.1
129.5
131.9
134.6
137.5
141.3
146.4

125.1
127.3
129.7
132.1
134.8
137.7
141.7
146.9

125.3
127.5
129.9
132.3
135.1
137.9
142.0
147.3

125.4
127.7
130.1
132.5
135.3
138.2
142.4

83.8
83.0
82.4
79.4
80.7
81.2
84.0
83.3

84.2
83.3
82.5
79.4
80.4
81.1
84.2
83.9

83.7
82.8
82.4
80.0
80.4
81.5
84.0
83.7

83.8
82.3
81.8
79.9
80.8
81.4
84.4
83.2

84.2
82.5
80.7
79.7
81.2
81.8
84.6

-JifiL „

Dec.

1. Estimates from August 1995 through October 1995 are subject to further revision in the upcoming monthly releases.
2. Annual averages of industrial production are calculated from not seasonally adjusted
indexes.




83.6
84.3
82.5 £.
78.7
80.3
81.0
83.8
83.7

Table 2
INDUSTRIAL PRODUCTION, CAPACITY AND UTILIZATION: 1988-19951
MANUFACTURING
Seasonally ad usted
Jan.

Feb.

Mar.

Apr.

May

June

July

Aug.

Sep.

Oct.

Nov.

Dec.

Q1

Q2

Q3

Q4

Annual2

.2
.8
-.1
-.9
.1
.8
.2
.3

.1
-.9
.9
-.9
.8
.3
.9
-.2

.2
.6
.4
-.9
.9
.0
1.0
.1

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

-.1
-.5
.5
.7
.6
-.4
.6
-.3

.0
-.2
.0
1.3
.0
.0
.3
.1

.5
-1.2
-.3
.3
.8
.6
.4
.0

.4
.4
.5
.3
-.1
-.1
.6
.9

.0
-.4
-.1
1.0
.1
.9
.2
.5

.1
-.5
-.6
.1
.6
.0
.9
-.3

.9
.3
-1.2
-.2
.6
.8
.6

.6
.2
-.5
-.4
.0
1.1
.9

3.6
4.3
3.7
-9.8
2.3
4.6
8.9
3.9

3.3
-.3
.2
1.0
7.6
1.2
8.5
-2.2

3.0
-5.3
1.0
8.1
3.8
3.0
5.1
3.1

4.4
-1.3
-5.5
2.5
4.3
6.0
7.9

4.7
1.6
-.3
-2.1
4.2
3.9
6.6

Industrial
Production
1988
1989
1990
1991
1992
1993
1994
1995

103.2
107.7
105.5
103.4
105.1
111.2
115.5
124.1

103.4
106.7
106.5
102.5
105.9
111.5
116.6
123.9

103.6
107.3
107.0
101.5
106.9
111.5
117.8
124.0

104.3
107.6
106.0
101.8
107.6
112.0
118.5
123.5

104.2
107.1
106.6
102.5
108.2
111.6
119.1
123.2

104.2
106.8
106.6
103.8
108.1
111.6
119.5
123.3

104.7
105.5
106.3
104.2
109.0
112.3
120.0
123.3

105.1
106.0
106.9
104.5
108.9
112.2
120.7
124.5

105.2
105.6
106.8
105.6
109.0
113.2
120.9
125.0

105.3
105.1
106.2
105.7
109.7
113.2
122.0
124.7

106.2
105.4
104.9
105.5
110.4
114.1
122.7

106.8
105.6
104.4
105.1
110.3
115.3
123.8

103.4
107.2
106.3
102.5
106.0
111.4
116.6
124.0

104.2
107.2
106.4
102.7
108.0
111.7
119.0
123.3

105.0
105.7
106.6
104.8
109.0
112.5
120.5
124.3

106.1
105.4
105.1
105.4
110.1
114.2
122.8

104.7
106.4
106.1
103.8
108.2
112.3
119.7

Capacity
1988
1989
1990
1991
1992
1993
1994
1995

124.1
126.5
129.4
132.0
134.6
138.0
141.5
146.6

124.3
126.7
129.6
132.2
134.9
138.2
141.9
147.2

124.5
127.0
129.8
132.5
135.2
138.5
142.3
147.7

124.7
127.2
130.1
132.7
135.5
138.8
142.7
148.2

124.9
127.4
130.3
132.9
135.7
139.1
143.1
148.7

125.1
127.7
130.5
133.1
136.0
139.4
143.6
149.2

125.3
127.9
130.7
133.3
136.3
139.7
144.0
149.8

125.5
128.2
130.9
133.5
136.6
139.9
144.4
150.3

125.7
128.4
131.2
133.7
136.8
140.2
144.9
150.9

125.9
128.7
131.4
133.9
137.1
140.5
145.3
151.4

126.0
128.9
131.6
134.2
137.4
140.8
145.7

126.2
129.2
131.8
134.4
137.7
141.1
146.2

124.3
126.7
129.6
132.2
134.9
138.2
141.9
147.2

124.9
127.4
130.3
132.9
135.7
139.1
143.1
148.7

125.5
128.2
130.9
133.5
136.6
139.9
144.4
150.3

126.0
128.9
131.6
134.2
137.4
140.8
145.7

125.2
127.8
130.6
133.2
136.1
139.5
143.8

Utilization
1988
1989
1990
1991
1992
1993
1994
1995

83.2
85.2
81.6
78.3
78.1
80.6
81.7
84.6

83.1
84.2
82.2
77.5
78.5
80.6
82.2
84.2

83.2
84.6
82.4
76.6
79.1
80.5
82.8
84.0

83.6
84.6
81.5
76.8
79.4
80.7
83.0
83.3

83.4
84.0
81.8
77.2
79.7
80.2
83.2
82.8

83.3
83.7
81.7
78.0
79.5
80.0
83.2
82.6

83.6
82.5
81.3
78.2
80.0
80.4
83.3
82.3

83.8
82.7
81.6
78.3
79.8
80.2
83.6
82.8

83.7
82.2
81.4
78.9
79.7
80.7
83.5
82.9

83.7
81.7
80.8
78.9
80.0
80.6
83.9
82.3

84.3
81.8
79.7
78.6
80.3
81.0
84.2

84.6
81.8
79.2
78.2
80.1
81.7
84.7

83.2
84.6
82.0
77.5
78.6
80.6
82.2
84.3

83.5
84.1
81.7
77.3
79.6
80.3
83.2
82.9

83.7
82.5
81.4
78.5
79.8
80.4
83.4
82.7

84.2
81.7
79.9
78.6
80.2
81.1
84.3

83.6
83.2
81.3
78.0
79.5
80.6
83.3

Year
Industrial
Production,
Percent
Change
1988
1989
1990
1991
1992
1993
1994
1995

1. Estimates from August 1995 through October 1995 are subject to further revision in the upcoming monthly releases.
2. Annual averages of industrial production are calculated from not seasonally adjusted indexes.




8

Table 3
RATES OF GROWTH IN INDUSTRIAL PRODUCTION, BY MAJOR MARKET GROUPS, 1991-19951
i

Difference between
revised and earlier indexes
foercentaaeooints*

Revised index
foercenti
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

"~

1991

1992

1993

1994

1995

1991

1992

1993

1994

1995

.2

4.0

3.2

6.6

2.0

.0

.0

-.4

.6

-.2

-.3
.3
2.7
5.9
6.7
5.3
1.8

4.1
4.4
3.4
6.9
11.4
3.2
2.6

2.5
2.5
1.9
10.6
14.4
7.3
-.2

5.6
5.4
4.1
6.1
7.3
4.9
3.5

1.6
2.4
1.0
-2.5
-2.4
-2.5
2.0

-.2
-.3
.2
.5
1.4
->1
.0

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

-.4
-.3
-.2
2.4
2.9
1.9
-.9

.6
.8
.7
1.0
.0
1.8
.6

-.5
-.5
-.4
.6
1.3
.0
-.6

-2.8
.1
-6.9
3.7
5.8
-5.4
-9.3

5.8
8.2
4.4
14.9
.5
4.8
-5.8

3.5
5.9
5.9
7.5
.9
10.0
-7.0

7.5
11.4
8.6
17.8
2.6
7.9
-10.4

4.4
6.3
4.0
13.2
-2.3
-3.2
-6.6

-.8
-.7
-.2
-.8
-2.1
-.1
-1.2

-.5
-.8
.9
-1.6
-.6
-1.9
.2

-.4
-1.0
-.1
-3.1
3.6
-1.8
2.8

1.1
1.8
-.1
4.1
2.4
-2.5
-1.0

-.6
-.4
-.7
.6
-3.0
-1.2
-1.1

-2.2
-3.6
-1.4

3.2
4.0
2.7

2.6
6.0
.6

6.3
8.0
5.3

-.8
-2.5
.3

.3
.0
.5

-.1
-.3
-.1

-.8
-.2
-1.3

.0
-.4
.2

-.5
-.2
-.6

.9
1.5
.4
.1

3.7
6.2
2.3
.0

4.2
7.2
2.3
-.5

8.1
11.2
6.9
1.9

2.6
4.6
-2.2
2.3

.2
.6
-.3
-.1

.0
.0
.2
.1

-.4
-.2
-1.7
.4

.6
.5
1.3
.1

.2
.2
1.1
-1.0

.0

3.3

2.8

6.1

1.2

.0

-.1

-.3

.5

-.4

-1.2

4.8

3.5

8.6

1.7

-.8

-.5

-.3

.7

-1.3

SPECIAL AGGREGATES
Total excluding:
Computer and office equipment
Business equipment 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 1995, the growth rates are calculated from the fourth quarter of 1994 to the third
quarter of 1995.




9

Table 4
RATES OF GROWTH IN INDUSTRIAL PRODUCTION, BY INDUSTRY GROUPS, 1991-19951

Item

SIC l

Total index

1991

Revised index
(percent)
1992
1993

.2

4.0

1994

1995 I

6.6

3.2

2.0

1991

Difference between
revised and earlier indexes
(percentage points)
1992
1993
1994

.0

.0

-.4

1995

.6

-.2

.3

4.5

3.7

7.6

1.6

A

-.1

-.5

.7

-.1

-.6
.6

4.0
4.7

4.3
3.4

7.0
7.8

-1.7
3.0

.0
.0

.2
-.3

-.8
-.3

.6
.7

.5
-.3

.0
-.5
-.5
-5.7

5.5
5.8
4.9
3.8

6.2
3.9
5.2
4.2

9.3
5.7
7.3
4.0

3.3
-2.0
-3.0
-1.8

.0
-.3
.5
1.1

-.3
-1.5
-.6
-1.9

-.1
-1.8
.7
-.8

.8
1.6
-.7
-1.5

.0
1.0
-2.3
.5

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
Electrical machinery
36

-3.1
-5.4
-8.5
.4
-1.8

1.0
1.1
1.6
.9
5.1

7.5
9.1
5.8
5.4
3.9

9.8
8.3
6.4
11.8
8.4

-4.3
-3.0
.4
-6.0
.8

-.2
-.2
-.3
-.2
-.4

-.1
-.5
-.1
.6
.6

.7
.9
-.1
.3
-1.0

1.0
.7
.0
1.4
.8

.5
1.7
1.2
-1.1
-.5

-1.6
5.5
5.3

10.4
28.0
9.9

12.9
26.7
8.2

14.9
29.6
17.7

10.7
32.7
12.5

-.4
-.1
1.3

-.9
-2.6
-1.5

-1.2
-6.8
-4.9

1.7
9.4
1.2

1.8
4.6
-.5

Transportation equipment
Motor vehicles and parts
Autos and light trucks
Aerospace and misc.
Instruments
Miscellaneous

372-6,9
38
39

.8
10.0
12.3
-6.3
.0
.3

2.9
10.7
8.8
-4.3
1.0
2.1

4.9
16.8
15.7
-7.9
-1.1
6.0

3.2
8.6
6.0
-4.1
4.0
6.2

-3.3
-3.4
-3.9
-3.2
.9
.0

-.4
-.2
-.4
-.5
-.7
-.2

.6
-1.0
.0
2.0
.5
1.5

4.4
2.8
.8
6.5
1.0
2.2

.7
.7
-.1
1.5
.8
.1

-.5
1.5
2.1
-3.8
.2
1.4

20
21
22
23
26

.8
.9
-11.8
5.0
5.8
2.0

3.2
1.6
5.6
6.3
.9
.4

.9
2.6
-19.6
4.6
1.3
6.8

5.5
3.6
24.7
5.0
4.0
4.2

-.6
1.2
4.3
-6.3
-9.1
-2.6

.1
.1
.3
-.6
-.1
.2

.0
-.3
-4.4
1.9
.9
.8

-.9
.5
-4.1
3.2
2.5
-.4

.5
.1
-2.2
-.5
1.3
.3

-.2
-1.1
4.5
2.2
.6
-.7

27
28
29
30
31

-1.9
.2
-1.6
3.4
-4.5

2.3
4.4
3.6
8.7
5.1

-1.4
-1.0
3.1
6.7
-2.6

2.6
7.0
.0
10.4
-3.2

-1.1
1.4
2.7
-1.6
-9.4

.5
-.3
.4
.2
1.2

.2
.0
.3
.3
-.2

-1.2
-4.0
.6
.7
2.2

.0
2.3
-.4
.3
-1.7

.4
-1.0
1.6
.1
1.5

10
12
13
14

-3.1
-.4
-2.0
-3.5
-4.5

.3
6.1
-.5
-.5
4.5

-.5
2.5
-3.2
-.6
2.9

1.2
-2.8
9.1
-.7
6.4

.4
7.5
.5
-1.0
4.8

.0
-.6
.5
-.2
.6

.0
.3
.2
.1
-.3

.3
1.8
.1
.3
.2

.4
2.3
-.1
.4
-.4

-1.4
-.9
1.1
-2.1
-1.5

491,3pt
492,3pt

2.7
1.6
7.0

2.0
1.9
2.1

1.5
.9
3.9

.2
1.8
-6.0

9.1
8.4
11.9

.1
.1
.2

.1
.0
.2

.4
.3
.7

.0
-.1
.0

-1.1
-1.1
-.9

.0

3.7

3.2

7.0

.6

.0

-.1

-.3

.5

-.2

Manufacturing
Primary processing
Advanced processing
Durable
Lumber and products
Furniture and fixtures
Stone, clay, and glass products

37
371

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

24
25
32

SPECIAL AGGREGATES
Manufacturingexcludinq:
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 1995, the growth rates are calculated from the fourth quarter of 1994 to the third
quarter of 1995.




10

Table 5
RATES OF GROWTH IN CAPACITY, BY INDUSTRY GROUPS, 1991-19951

I
SIC I

Item

1991

Revised index
(percent)
1992
1993

!
1994

Difference between
revised and earlier indexes
(oercentaaeDOints)
1992
1993
1994

1995

1991

1.8

2.1

2.1

3.1

3.6

-.1

.0

.0

.4

.0

1.9

2.4

2.5

3.5

4.1

-.2

.0

.1

.5

.1

Primary processing
Advanced processing

1.2
2.4

1.4
2.9

1.5
2.9

2.2
4.1

2.6
4.7

.0
-.1

.0
.0

.1
.1

.2
.6

-.1
.1

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

2.3
.0
.5
.6

2.5
.6
.9
.7

3.1
1.2
1.9
.3

4.6
.9
1.9
.9

5.3
1.6
2.7
1.4

-.2
.3
-.4
.4

-.1
.3
-.7
.2

.5
.5
-.5
-.7

.9
-.6
-.9
-.7

.1
-.9
.3
-.2

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

-.8
-1.2
-1.6
.1
-.2

-1.2
-2.3
-3.0
.4
.3

-.3
-1.0
-4.2
.5
1.1

1.8
2.8
.9
.6
1.9

1.5
2.0
.9
1.0
2.0

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

-.2
.0
-.4
-.3
-.6

.3
.0
-.5
.5
.2

1.2
1.7
3.1
.6
.9

-1.7
-2.3
-3.1
-.9
.3

5.1
14.1
4.8

4.1
14.0
6.4

5.8
18.6
7.3

8.7
24.9
9.7

9.9
25.0
12.0

-.4
-1.3
-.9

-.7
-1.6
-.2

1.4
4.2
-.2

3.0
9.5
.2

.3
3.4
.1

372-6,9
38
39

1.5
2.9
1.0
-.1
1.2
2.6

2.0
3.8
2.4
.2
1.3
4.8

2.0
4.5
2.7
-.8
.9
3.7

3.4
6.6
5.8
-.3
.9
3.9

3.1
5.8
3.9
-.1
1.0
4.0

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

.5
.6
.0
.5
.1
1.3

1.5
2.0
1.9
.8
-.4
.5

1.6
2.2
1.2
.9
-.5
.3

.3
-.1
-.8
.7
-.3
2.2

20
21
22
23
26

1.8
1.7
-2.1
1.5
-.5
2.7

2.3
2.2
-1.0
2.5
2.1
2.3

1.8
2.1
.4
3.4
2.5
2.2

2.1
2.0
2.5
3.1
1.0
2.1

2.5
2.0
2.6
3.1 i
1.0
2.6!

.1
-.2
-1.6
1.0
-.1
.4

.1
.0
-.3
1.3
1.2
.4

-.4
-.1
-.6
1.7
2.5
.6

-.2
-.1
2.0
1.0
.5
.3

.1
-.3
1.0
.7
-.2
.3

27!
28 i
29
30
31

.3
3.1
-.8
3.5
-4.3

.9
4.0
-1.3
4.2
-2.7

-.8
2.6
-.5
4.1
-2.2

1.6
2.2
.3
4.6
-2.5

2.3
2.4 I
.5
6.5
-1.7

-.5
.5
.0
.0
-.5

-.8
.5
.0
-.2
-.3

-2.5
-.7
.0
-.3
.5

.5
-1.5
.7
-.1
-.3

1.5
-1.3
.1
1.5
1.2

10
12
13
14

-.3
2.2
2.1
-1.0
-.5

-1.1
2.5
1.0
-2.1
.5

-1.0
1.7
1.1
-1.9
.8

-.1
-.4
1.1
-.6
1.5

.1
.3
1.1
-.6
2.6

.0
-.1
.0
.0
.0

.0
.0
.0
.0
.0

.4
.0
.0
.5
.8

.1
-.9
.0
.0
1.7

.2
.2
.0
-.1
2.6

491,3pt
492,3pt

1.3
1.8
.0

1.2
1.5
.0

.6
.7
.2

.5
.5
.5

.9
1.0
.6!

.0
.0
.0

.0
.0
.0

-.5
-.7
.2

-.7
-1.0
.2

-.5
-.6
.0

Total excluding:
Computer anaoffice equipment

1.4

1.9

1.8

2.5

3.0

—. i

Manufacturingexcluding:
Computer and office equipment

1.6

2.1

2.1

2.9

3.4

.0

.2

-.1

Total index
Manufacturing

Transportation equipment
Motor vehicles and parts
Autos and light trucks
Aerospace and misc.
Instruments
Miscellaneous

37
371

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

1995

SPECIAL AGGREGATES
.0
.0

.0

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 1995, the growth rates are calculated from the fourth quarter of 1994 to the third
quarter of 1995.
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.




11

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

Ditterence between
revised and earlier indexes
(percentage points)
19911992
1993
1994
Low
Q4
Q4

"~™~

19671994
Ave.

19891990
, Hiah_

19911992
Low

1993
Q4

1994
Q4

1995

Total index

81.8

84.9

78.0

81.9

84.7

83.6

.0

-.4

-.2

-A

Manufacturing

81.1

85.2

76.6

81.1

84.3

82.7

.0

-.4

-.2

-.3

82.4
80.5

89.0
83.5

77.9
76.1

85.2
79.3

89.3
82.1

86.4
81.1

.0
.0

-.6
-.4

-.2
-.4

2
-.6

78.9
83.0
81.5
78.0

84.0
91.1
84.7
83.8

73.7
76.1
72.2
71.0

80.2
86.4
81.7
78.4

83.8
90.6
86.0
80.8

82.6
88.0
82.9
78.8

-.1
-.3
1.2
-.5

-.5
-4.0
1.8
-1.0

-.7
-2.1
2.1
-1.8

-.7
-.7
1.1
-1.3

80.3
80.0
79.6
81.1
77.2

92.8
95.7
89.9
88.5
82.0

74.2
72.0
71.5
75.2
71.3

88.4
90.1
90.6
86.2
79.7

95.3
94.9
95.5
95.8
84.8

91.3
90.9
95.4
90.7
84.5

.2
-.1
.1
.2
-.4

.4
.1
.3
.6
.1

.1
-.9
-2.7
1.2
-.1

1.6
1.1
.3
1.1
-.1

80.6
80.2
80.3

84.0
80.0
84.2

71.8
64.5
77.0

82.5
79.5
81.6

87.2
82.5
87.7

87.6
85.6
87.6

-.7
-.1
1.5

-2.4
-7.1
-2.8

-3.7
-7.7
-2.2

-2.9
-8.3
-2.6

37
371

74.8
76.0

372-6,9
38
39

74.9
81.8
75.1

84.4
85.1
89.1
88.4
80.8
79.8

69.7
56.6
55.6
75.6
76.4
72.1

77.4
83.6
85.0
70.4
75.6
74.1

77.3
85.1
85.2
67.8
78.0
75.8

73.8
79.7
80.8
66.2
78.5
73.4

-.5
-1.0
-2.1
1.2
-.3
-.8

1.8
-.8
-1.4
4.9
.9
.3

1.2
-2.1
-2.4
5.2
1.9
.2

.7
-1.0
-.4
3.0
2.8
-.4

20
21
22|
23
26

83.4
82.2
90.8
86.1
80.9
89.8

86.7
83.3
102.4
92.1
82.3
94.6

80.3
80.8
76.7
78.8
75.0
86.7

82.0
81.6
71.1
88.9
78.9
91.9

84.7
82.9
86.5
90.5
81.3
93.8

82.8
82.3
86.3
84.3
74.8
90.1

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

-.4
.6
-4.5
.4
-.2
-.6

.1
.7
-9.0
-.9
.3
-.6-

.0
.0
-7.9
.3
.6
-1.3

27
23
29
30
31

86.0
79.9
85.4
84.1
82.0

90.4
85.5
91.4
90.5
84.9

78.9
78.5
84.6
78.0
76.0

81.2
77.1
93.0
88.8
85.4

82.0
80.7
92.7
93.7
84.8

79.9
80.1
94.1
88.0
79.5

.7
-.4
.9
-.4
1.3

2.5
-3.6
1.2
1.4
3.1

2.2
-.7
.2
1.8
1.9

1.5
-.6
1.2
.8
1.8

10
12
13
14

87.6
78.5
86.7
88.4
84.3

89.5
88.8
93.5
90.7
90.0

85.6
80.0
82.6
86.0
79.4

88.1
86.4
80.2
90.3
86.2

89.3
84.4
86.6
90.2
90.3

89.5
88.6
86.2
90.0
91.6

-.1
-.6
.3
.1
.0

.0
1.3
.7
-.2
-.5

.3
4.0
.7
.3
-2.4

-.8
3.6
1.4
-1.1
-5.3

491,3pt
492,3pt

86.5
88.5
82.3

92.6
94.8
85.5

83.1
84.4
71.2

87.3
88.3
83.6

87.1
89.5
78.2

92.2
94.3
84.7

-.1
-.4
-.2

.9
.9
.7

1.4
1.7
.6

1.2
1.5
.1

Total excluding:
Computer and office equipment

81.5

85.0

78.3

81.9

84.7

83.5

-.2

.0

-.2

Manufacturingexcluding:
Computer ana office equipment

80.7

85.3

76.9

81.0

84.2

82.4

-.4

-.2

-.3

Item

SIC I

Primary processing
Advanced processing
Durable
Lumber and products
Furniture and fixtures
Stone, clay, and glass products

24
25
32

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
Electrical machinery
36
Transportation equipment
Motor vehicles and parts
Autos and light trucks
Aerospace and misc.
Instruments
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
Metalmining
Coal mining
Oil and gas extraction
Stone and earth minerals
Utilities
Electric
Gas

!

1995

SPECIAL AGGREGATES

.0

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 all did not occur in the same month.




12

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
1992, the total IP index has been constructed from 260 individual series based on die
1987 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 "p" 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 "r" 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.
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 a monthly basis,
the individual indexes of industrial production are constructed from two main types
of source data: (1) 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 either 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 are 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. The 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. The 1992 value-added weights used to aggregate
the index are shown in the first column of tables 1, 2, and 6, in the "Value added"
column under the heading "1992."
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 1995;
for other series, the factors were estimated with data through at least June 1995. 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, and may not precisely
equal an aggregation of the seasonally adjusted industry groups.
Reliability. The average revision to the ky^l of the total IP index, without regard to
sign, between the preliminary estimate and its third revision (or from the first and 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. 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—1986 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. The later 1994 revision to the index was described in the
Federal Reserve Bulletin, vol. 81 (January 1995), pp. 16-26. This revision to the
index will be described in the January 1996 Federal Reserve Bulletin.
Capacity Utilization
Definition. Capacity utilization is calculated for the manufacturing, 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. The 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 input.
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 die note on tables 2 and 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. The implied proportions of individual industry
operating rates in the rate for total industry for the most recent year are shown in the
first column of table 3.
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 basic 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. The later 1994 revision to the index was described in the
Federal Reserve Bulletin, vol. 81 (January 1995), pp. 16-26. This revison will be
decribed in the January 1996 Federal Reserve Bulletin.
Electric 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 1995
At 9:15 a.m. on January 17, February 15, March 15, April 14, May 16, June 15, July
14, August 15, September 15, October 17, November 15, and December 14.

13

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