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FEDERAL RESERVE statistical release •^SfS^ G.3 (402) For Immediate release CAPACITY UTILIZATION Manufacturing, Mining, Utilities, ana matismai August 16, 1988 Capacity utilization in manufacturing, mining, and utilities rose 0.4 percentage point in July to 83.5 percent, the largest increase since November. Increases were widespread throughout the industrial sector, with notable strength at materials industries. Utilization at primary processing industries more than reversed its June decline and returned to near its level at the end of last year. The operating rate for advanced processing industries continued to steadily advance in July, reaching 82 percent. Operating rates for both durable and nondurable goods industries increased in July. Utilization rates at primary metals industries and at producers of aerospace and miscellaneous transportation equipment posted strong gains, rebounding from declines in June. The operating rate in primary metals reached 89.5 percent in July, its highest level since July 1979. Utilization at manufacturers of nonelectrical machinery rose nearly 1 percentage point to 82.6 percent, 6.8 percentage points above its level a year ago. The operating rate at nondurable manufacturers posted its first sizable gain since late last year. Utilization rates for the paper and textile industries, which had been very high at the end of 1987, eased perceptibly during the first half of 1988. Utilization at producers of industrial materials increased 0.8 percentage point in July to 84.2 percent. The rise in the operating rate for this grouping reflected both the strength in primary processing industries as well as continued increases in utilization at mines. Capacity Utilization: Summary Percent of capacity, seasonally adjusted iy Series High Low /d -80 riitjh Lov -87 Avg. 1988 APR | HAY | JUN ] JU1* 8b.b 72.1 8b.9 69.5 81.5 82.7 82.9 83.1 83.5 Manufacturing Durable Nondurable 87.7 87.4 88.8 6*.9 67,9 71.8 8o.b 86.3 87.0 66.0 63.7 74.2 80.6 78.7 83.5 82.9 80.9 85.9 83.2 81.8 85.3 83.2 81.7 85.4 83.7 82.3 85.8 Mining Utilities 92.8 95.6 87.8 82.9 95.2 8a.b 76.9 78.0 86.7 86.9 - 82.3 79.3 81.1 80.2 81.7 82. 1 82.3 82-:> 70.5 89.1 6d.5 82.2 82.9 83.2 83.4 84.2 Total Industry Industrial Materials CAPACITY UTILIZATION JULY DATA SEASONALLY ADJUSTED, PERCENT 110 TOTAL INDUSTRY TOTAL MATERIALS 90 70 50 110 MINING UTILITIES 90 70 MANUFACTURING 50 110 MANUFACTURING ELECTRICAL MACHINERY 90 NONDURABLE f DURABLE \ 70 / 50 110 RAW STEEL TEXTILE, PAPER AND CHEMICAL MATERIALS 90 70 50 30 73 1976 1979 1982 1985 1988 1973 1976 1979 1982 1985 1988 MANUFACTURING, MINING AND UTILITIES Capacity Utilization Monthly, seasonally adjusted, percent of capacity 1975 1 197b 1 198^ 1 1967 J 1987 1 19/3 j JUL Series | _ 1987 1988 Low | - 8 7 Low ] - 8 0 Hiu,h NOV 1 DEC 1 J A N \ J J Avq. 1 1 1 1 1 1 I 8 2 . 4| 8 2 . 5 6 2 . 1^ 82.1 8 1 . 51 8b. 72.11 69.5| 81. 1| Total Industry 86.b 1 1 1 1 82. I 82. 7 82. o 62.2 00. 80. by.91 Manufacturing b7.7 61 8 1 . 5 | oB.Oj 61 1 87. 6| 8 7 . 1 86.6 87.0 85.4J 81.71 65.0J 8 9 . 11 Primary processing 91.9 68.31 69.51 60.11 79.81 80.0 8 0 . 3 | 8 0 . 7 80.7 85. U bo.O 71.1] Advanced processing 1 1 1 80.5 8 0 . 11 8 0 . 3 79.9 78.71 78.61 8b. Durable manufacturing 67.4 63.71 b7.9l 3| B o . 61 62.9| 7 8 . 31 81.51 61.9 81. 4| 81. 5 62.2 b7.1| Stone, clay and glass products 89.3 79. 6| 79.21 88.6 8 9 . 11 8 5 . 2 8 5 . 1 45.81 97. 1 j Primary metals 1U1.9 I b 7 . 0 | 7 6 . b| 77.4| 88.8 9 1 . 61 8 7 . 3 66.8 37.6J 1 0 5 . 8 1 6 6 . 6 | 1 0 0 . 31 Iron and steel, subtotal 81. 61 88.3 8 5 . 81 82.4 82.7 60.8| 8 1 . 21 Nonferrous metals, subtotal \t 5. 6 J O2. 11 9 1 . 11 78.21 79.4 8 0 . 81 8 1 . 6 8 1 . I1 7 7 . 81 b1.3| 8 7 . 41 Fabricated metal products 85.01 b4.7| 7 7 . 8| 7 8 . 5 76.' 62.91 7 8 . 11 75. 81 76.1 Nonelectrical machinery c 9 . 0 1 68.21 8 o . 0 | 75.4| 76.5 76. 5| 77. 1 77. 66.9| 7 8 . 11 6 9 . 9] 85.71 63.7J Electrical machinery 80.4 77. 7| 7 7 . 2 76.( 77.51 9 3 . 31 78.1| 4 7 . 01 97.11 5 2 . 7 | Motor vehicles and parts 70.2 63. 9 | 59. 0 60.( 36.61 1 66.5| Automobiles 1 93. 88. 88.7| 88.2 8 7 . 9» 8 8 . 7 70.71 7 7 . 71 8 7 . 11 Aerospace and misc. trans, eqp. 77.0J b 9 . 6 1 78.7| 79.9 7 8 . 5 | 7 9 . 7 80.0 77.8| 83. 0| 88. 9| Instruments b9.2| 7 4 . 9 | 82. 0 82. 61. 6 | 82.01 82.0 81. 8 1 . 01 b9.1l o7.7| 69.01 Other durables Nondurable manufacturing Food and kindred products Textile mill products Paper and products Chemicals and products Petroleum products Rubber and plastics products Other nondurables Mining Utilities Electric utilities 8b.8 1 85.8J 92.1 i 95.6J 88.6J 99.6J 97.51 86.41 1 92.8| 1 95.61 9b.7 | 71.81 77.6| 58.91 6/.71 69.21 83.7J 59.51 72.3| 1 87.8| 1 8^.91 83.0| 1 1 74.2J 76.51 70.6| 80.21 67.6| od.Bl 71.21 78.91 83. 82. 85. 88. 78. 95.21 76.91 86. 1 88. 8 7 . 61 1 76.01 78.21 1 5| 01 51 91 8 6 . 91 8 4 . 81 8 6 . 01 1 71 1 86. 91 8 8 . 01 1 85. 91 80. 3| 93.91 97. 1J 83.21 85. 3J 89.0| 87.41 65.6 79.8 92.7 95.8 84.7 84.2 88.8 86.4 76.81 81.5 1 80. 21 85.91 61.2 82.8 66. I 4| 80.31 9 3 . 31 9 7 . 01 6 6 . 51 86. 6| 8 6 . 81 86. 2 80. 7 91. 5 96. 3 86. 3 86. 7 88. 3 21 86.0 I I 80.7 81. 5| 6J». 80.0) 82.4 8 1 . 4| 64. 3 1 Ai'H 1 HAY 1 JUN 1 JUL 82.4 82.7 82.9 83.1 83.5 82.7 62.9 83.2 83.2 83.7 86.9 60.7 6b. 9 81.2 87.0 81.6 86.6 81.7 87.3 82.0 60.6 82.7 83.7 83.2 84.3 82.4 79.0 76.5 79.3 oS.8 67.b 80.0 62.4 80.9 81.9 83.7 63.5 84. 1 62.3 60.1 77.3 80.5 69.3 86.6 60.2 82.2 81.8 81.8 87.5 88.0 86.7 83.0 81.2 77.3 83.8 75.3 86.4 80.3 82.2 81.7 82.4 85.9 83.9 88.4 83.2 81.7 77.4 83.3 75.3 85.7 80.9 81.8 82.3 H8. i 66. j 85.8 60.2 91.4 95.1 85.0 68.5 88.4 66.2 65.9 79.6 91.3 94.9 86.2 66.5 86.0 66.3 85.3 80.0 88.6 94.8 85.7 85.3 88.3 85.2 85.4 80.1 89.6 92.8 85.9 84.5 88.4 85.6 79. 80. 6 82.3 81.1 81.7 82.3 82.1 85.9 82.5 86.3 • 8 7 . 0| 8 5 . 11 8 d . JJ 9 z . 71 62. 9 | 9 1 . 71 8 9 . 41 92. 4| MAR 1 80.9 90.4 94. 1 O4.'1 86.. i 85. 62.6 84.4 81.0 83.2 79.3 82.2 80.2 83.5 89.5 83.4 82.6 78.0 81.6 71.4 87. 1 81.5 81.5 85.8 84.9 85.5 1 Output, Capacity, and Capacity Utilization Quarterly, seasonally adjusted OUTPUT 1 UTILIZATION 1 1987 1 1987 1988 _23_ I 02 JUL. J Qi Q3 04 Q1 Q2 1 1 I I 1 2 8 . 2 1 3 1 . 0 133.21134 5 13b.11 160.4 161.3 162.21 163. 1 164, Total Industry 79.9 81.2 82.1 82.4 82.9 .1| I 1 1 I 1 3 3 . 2 1 3 5 . 7 138.11139 6 141.51 Manufacturing 165.6 166.7 167.7J168.9 170. 80.5 81.4 82.3| 82.7 83.1 1 1 I I 1 1 6 . 1 1 1 9 . 2 122.21123 U 123.9| Primary processing 139.0 139.8 140.6J141.6 142. 83.5 85.3 86. 9| 86.9 86.8 1 4 3 . 5 1 4 5 . 8 147.61149 7 152.11 161.6 182.9 184.11185.4 186. Advanced processing 79.0 79.7 80. 11 80.7 81.5 1 1 1 3 1 . 4 133.7 Durable manufacturing 4 141.01 169.3 170.2 171.11172.0 173 77.6 78.5 01 80.4 81.5 118.6 118.0 136.9| 138 5 121.61 Stone, clay and glass products 145.1 146.1 147.2|147.9 148 81.7 80.7 4| 62.1 82.0 119.81121 7 7. J 83.7 0 87.4J Primary metals 103.3 102.6 101.8J101.6 102 74.8 81.6 8j 84.7 85.7 90.5| 66 66. J 73.8 5 76.0J Iron and steel, subtotal 92.5 9 1 . 1 8 9 . 8 | 89.2 89 71.7 81.0 4| 85.8 85.1 81.21 76 98.0 102.2 1 106.71 Nonferrous metals, subtotal 123.7 124.1 124.61125.1 125 79.2 82.4 7| 83.2 86.4 108.01104 109.9 110.8 Fabricated metal products 141.5 142.3 143.01143.6 144 77.6 77.8 91 81.9 82.8 114.31117 8 119.8| 150.6 155.4 Nonelectrical machinery 204.1 205.4 206.71208.U 209 73.8 75.7 >.8| 78.7 81.0 156.7J163 7 169.5| 170.0 173.4 74.5 Electrical machinery 75.7 5| 76.9 77.4 175.71177 2 179. 11 2 2 8 . 1 228.9 229.6|230.5 231 1U9. 7 108.0 78.0 Motor vehicles and parts 140.7 141.2 1 4 1 . 7 | 1 4 2 . 3 142 76.5 i.O] 77.8 82.5 113.411 10 6 117.81 103. 1 9 2 . 2 6 109.91 69.7 Automobiles 147.8 148.6' 149.31149.8 149 62.0 73.3 9| 61.8 102.8| 92 152.6 152.9 89.2 Aerospace and misc. trans, eqp. 171.1 1 7 2 . 1 1 7 3 . 2 | 1 7 4 . 2 1 7 5 . . . 88.8 .3| 88.3 86.2 152.9J153 9 151.2| 14J. 1 145.z . 0 151.51 78.8 Instruments 181.6 183.3 1 8 4 . 9 1 1 8 6 . 6 1 8 8 . 3 | 79.2 ,31 79.9 80.5 146.7J149 132.2 133. 1 8 138.41 81.5 Other durables 162.2 1 6 4 . 0 165.81167.3 1 6 8 . 6 | 81.2 ,7| 82.3 82.1 135.4|137 I I 1 I 135.7 138.6 139.7| 141 4 142.2J Nondurable manufacturing 84.7 85.7 160.3 161.7 163.11164.6 166.31 6| 85.9 85.5 137.0 138.9 139.01141 4 141.2| Food and kindred products 79.9 80.4 171.6 172.8 174.11175.4 17b.8l 81 80.6 79.9 116.5 118.8 117.41116 2 115.81 Textile mill products 94.2 125.7 126.1 126.6|127.b 128.91 92.7 8) 91.1 89.8 Paper and products 141.5 14 8.4 148.31149 0 146.5| 92.6 96.6 152.4 153.6 154.9|156.2 157.7| .71 95.4 94.2 Chemicals and products 138. i. 141.8 144.6)146 6 148.8J 81.9 83.6 168.7 169.6 170.51171.7 173.2| . 8 | 85.3 85.9 94.71 9b . 9 Petroleum products 9 3 . 0 93.5 95.9| 84.4 84.6 110.1 110.5 110.8(111.1 111.4J -4J 87.2 86.1 Rubber and plastics products 162.7 165.7 7 173.6| 87.3 87.8 1d6.3 188.8 191.31193.9 196.8J 41 88.5 88.2 Other nondurables 138.4 140.7 141.41143 0 144.4[ 86.7 67.0 159.6 161.3 163.9J166.2 166.6J >.3J 86.1 85.7 I 1 J I I 9 9 . 0 1 0 0 . 7 104.31102 5 103. 8J Mining 76.3 78.0 81.2| 80.3 81.7 129.7 129.0 128.41127.7 127.0| 1 I I I 1 1UB.3 1 1 1 . 8 112.31114 7 112.81 Utilities 78.3 80.5 80 . 6 | 8 2 . 0 80.5 l 138.3 138.8.139.41139.8 140. 1J 6 3 . 4 1 2 6 . 6 1 3 0 . 2 126.61130 0 130.31 Electric utilities 85.1 82 . 2 | 8 4 . 0 83.8 ! 151.9 152.9 154.0|154.8 155.41 ta for output are percentages df 1977 output as shown in the Federal Reserve'sfceason-I 1977 actual oujtput. Capacity utilization percentages are calf ulated as ratios of production to aHy adjusted indexes of Industrial production. Capacity is also expressed as a percentage of capacity. Series 1987 1988 INDUSTRIAL MATERIALS Table 3 Capacity Utilization Monthly, seasonally adjusted, percent of capacity 1978 1982 | 1967 | 1937 | Low | -87 | JUL | i Avq. j I Series digit I 92.0j J J 91-8| Durable goods materials I 99.2| Metal materials I 106.0] Raw steel 95.7| Aluminum I I Nondurable goods materials 91.1J I T<?jtfi!e, paper, and chemical materials 92.8| i Pulp and paper materials 98.UJ Chemical materials 92.5J i Industrial Materials 70. 5| o4.4J I 67.1J J Ob.4| 73.01 1 J b6.7| I 64.8) 1 70. 6j 54.4| 1 94.b | L 86.91 Energy materials 89.1j j 68.5j 1 60.9| 93.bj i 98.9J 97.4| 1 88. 1J J 89.4J 97.31 8/.91 J 45.7J 1 36.1| 58.8| 1 70.7| J 68.6| 1 79.91 63.51 i 1 94,01 L 62.3| 1 82.21 I 1 79.01 1 77.71 80.21 87.31 I 83.4| 83.8| J 91.71 81.01 I 1 89.01 NGV 60. 6] I 1 76.5| 1 73.9| 79.5| 86.8| I J 88.4| I 90. 0J 100.5| 85. 1| J I 82.41 1986 DEC 1 JAN 1 ?Eb 1 HAB 1 Aftt 1 HAY j JUM 1 JUL 82.9 83. 83.0 HZ.6 62.4 82.9 83.2 83.4 84.2 79.0 79.7 79.3 79.1 79.7 80.9 80.8 81.6 83.3 80.1 79.3 78.3 79.3 82.0 81.4 84.6 89.7 94.8 90.3 97.1 65.7 86.5 83.4 89.7 97.9 99.2 99.5 98.8 89.0 88.8 87.3 68.3 88.7 87.9 87.6 88.2 91.0 90.6 88.3 69.9 90.1 88.7 88.6 89.3 98.7 88.6 100.6 87.8 85.7 84. 84.7 87.5 99.5 *7.8 97.8 98.1 98.1 85.7 67.5 88.0 86.9 9b.3 87.0 64.1 o4.1 84.5 83.7 85.2 86.3 L_ L Table 4 Output, Capacity, and Capacity Utilization Quarterly, seasonally adjusted Series Industrial Materials Durable goods materials - 198'1 Q3 Q2 1988 Q2 1 I 116. 5 119.2 122. 5|122.5 124. 11 1 i 1 1 122. 9 125.7 130. 3|131.5 134.21 i Metal materials 77.0 83.6 91.41 8b.2 Raw steel Aluminum 67. 6 77. 8 77.0 83.6 Textile, paper and chemical materials Pulp and paper materials Chemical materials Energy materials 68.2| 77.11 94.8| 1 1 J 124.0 128.2 130. 41129.4 130.bl I 133.0|131.6 I 137. 7 144.6 145. 11 145.7 125. 3 130.2 135. 5|133.5 1 1 9 8 . 7 100.0 102. 11100.9 J 1 130.5 146. 7 147.2 163. 1 163.9 132.4J | 145.4| 135.71 1 1 100.9| 110. 0 109.4 92. 2 94. 9 1 1988 Q1 Q2 1 I 1 147.811^8. 5 14*. 3| i I 164.7J165. 7 1bb.8| 1 i 108.91108. d 109. 11 1 89.4J 88. 7 88. 7| 93.9J 94. 3 95. 51 Q4 Q3 j 79.5i 77.7 88.41 92.5 1 Nondurable goods materials 1987 U2 90.8 94.4 J 143. 8 144.7 145.61 146.8 j 143. 4 144.4 145.4J1^6. 7 | 143. 9 145. 1 146.2J147. 6 149. 8 150.9 152.01153. 5 J 1 120. 4 120. 1 119.91119. 7 1 146. 198/ 79. 4 61.0 75. 4 76.7 70. 0 7b.5 73.b 81.9 84.8 88.6 86. 2 88.6 87. 90.4 95. 1 83. b 99.b 86.3 62. 1 83.3 1 1 j 148. 51 i 149.21 155.4J 1 ,„. 1988 Q1 U3 82.91 82.5 1 1 79.11 79.4 I 8 4 . 0 | 79.2 88.9| 94.1J 1 1 89-3] I 91.5| j 99.21 89.1| Q2 83.1 80.5 80.9 87.5 98.1 86.9 99.2 88.1 88.1 89.7 89.2 98.7 87.0 97.5 87.3 85.21 84.3 1 84.5 Explanatory Notes Definition. This release contains estimates of output, capacity, and capacity utilization for the nation's factories, mines, and electric and gas utilities. Output data are the Federal Reserve's seasonally adjusted indexes of industrial production, which express output as percentages of 1977 output. The capacity estimates are expressed as percentages of 1977 output as well. Capacity utilization percentages are calculated as ratios of production to capacity. The capacity indexes are based on a variety of data, including capacity data in physical units compiled by trade associations, private and government surveys of capacity growth and utilization rates, and estimates of capital stock growth. The concept of practical capacity is applied, which is defined as the greatest level of output that a plant can maintain within the framework of a realistic work pattern, taking account of normal downtime, and assuming sufficient availability of inputs to operate machinery and equipment in place. When the capacity indexes for individual industries are aggregated—for example to total manufacturing—no explicit account is taken of possible general equilibrium constraints such as emerging industry bottlenecks. Because of the large and heterogeneous database, changes in utilization rates may be more meaningful in the analysis of business conditions than any particular level of these rales. Groupings. Estimates of capacity and industrial production for manufacturing industries are aggregated to primary processing and advanced processing industries, to durabie and nondurable manufacturing industries, and to total manufacturing. The mining, manufacturing, and utilities estimates aggregate to the total index. Primary processing includes textile mill products, paper and products, industrial chemicals, petroleum products, rubber and plastics products, lumber and products, primary metals, fabricated metal products, and stone, clay, and glass products. Advanced processing includes foods, tobacco products, apparel products, printing and publishing, chemical products such as drugs and toiletries, leather and products, furniture and fixtures, machinery, transportation equipment, instruments, miscellaneous .manufactures, and government-owned-and-operated ordnance facilities. Industrial materials are items produced and .u.sed as inputs by manufacturing plants, mines, and utilities. Industrial materials include many of the items included in the primary processing grouping of manufacturing, as well as some of the output of the advanced processing industries, mines, and utilities—such as iron ore, crude oil, semiconductors, and electricity sold to industry. 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 mining, manufacturing, and utilities as a whole, and for total manufacturing, utilization rates as high as 90 percent have been exceeded only in wartime. Revisions. The first estimates for a month are published about the 17th of the following month. These estimates may revise in each of the next three months as new data become available. After the fourth month no further revisions are undertaken until an annual or benchmark revision. The median of the revisions in the total manufacturing utilization rate between the first and fourth estimate is 0.3 of a percentage point; that is, in about half of the cases, the absolute value of the revision from the first to the fourth estimate is less than 0.3 of a percentage point. Sources. The basic methodology used to estimate the series is discussed in Richard D. Raddock, "Revised Federal Reserve Rates of Capacity Utilization," Federal Reserve Bulletin, Vol. 71 (October 1985), pp. 754-66. Revised data for 1984-85 as well as historical utilization rates since 1967 (1948 in the case of manufacturing) are included in the statistical supplement to the September 1986 capacity utilization release. Copies may be obtained from Publications Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551 Rounding. Utilization rates are calculated from unrounded capacity and production indexes. Aggregates are derived from unrounded detailed components. Release schedule for 1988. Approximately 11 a.m. on January 19, February 18, March 17, April 17, May 18, June 16, July 18, August 16, September 16, October 17, November 16, and December 16.
