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FEDERAL RESERVE statistical release G.3 (402) For Immediate release CAPACITY UTILIZATION Manufacturing, Mining, Utilities, and Industrial Materials December 14,1988 9:15 a.m Capacity utilization in manufacturing, mining, and utilities increased 0.2 percentage point in November to 84.2 percent, the highest level since November 1979. The operating rate in manufacturing and utilities both rose 0.2 percentage point in November; the gain in mining was 0.6 percentage point. Within manufacturing, utilization for primary processing industries rose 0.4 percentage point in November; the rate for advanced processing increased only 0.2 percentage point. The operating rate for primary metals industries continued its recent upturn, reaching its highest level since December 1978. Since August, most of the rise in utilization for primary metals has come from increased production of steel mill products. Among advanced processing industries, both fabricated metal products and motor vehicles and parts showed operating rate gains of nearly a percentage point in November. The rise in fabricated metals reflects widespread gains while the increase in motor vehicles and parts was related to higher truck production. Utilization at producers of industrial materials increased 0.4 percentage point in November to 84.8 percent. Gains were especially strong at producers of energy materials owing to a significant rise in coal production. Capacity Utilization: Summary Percent of capacity, seasonally adjusted 1973 Series 1975 Lou 1978 -80 1982 Lov 1967 -87 1988 Avq. AUG I SEP |OCT I NO* 88.6 72. T do.9 69.5 81.5 83.8 83.7 84.0 84.2 Manufacturing Durable Nondurable 87.7 87.4 bti.d 69.9 67.9 71.8 86.5 80.6 78.7 83.5 84.0 82.3 86.4 84.0 82.5 86.2 84.3 82.9 86.4 84.5 8J.1 87^0 66.0 63.7 74.2 86.5 Mining Utilities 92.8 95.6 87.8 82.9 95.2 88.5 76.9 78.0 86.7 86.9 82.2 83.9 82.2 80.3 81.6 BO.d 82.2 81.0 92.0 70.5 89.1 63.5 82.2 84.3 84.1 84.4 84.8 Total Industry Industrial Material* CAPACITY UTILIZATION NOVEMBER DATA SEASONALLY ADJUSTED. PERCENT 110 TOTAL INDUSTRY TOTAL MATERIALS 00 70 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 — 50 110 MINING UTILITIES 00 70 1 I I I 111111I 1I 1 I — I I I l I l l l I l I I I I I 50 110 MANUFACTURING ELECTRICAL MACHINERY 00 NONDURABLE 70 1 11I 11I 1I 11I 11 1 — -V — i i i 111111111111 50 110 TEXTILE, PAPER AND CHEMICAL MATERIALS 70 — 50 — 111111111111111 1973 1976 1979 1982 1985 30 1988 1973 1976 1979 1982 1985 1988 MANUFACTURING, MINING AND UTILITIES Table 1 Capacity Utilization Monthly, seasonally adjusted, percent of capacity 1973 i 1975 I 1978 I 1982 1 19b7 I 1987 1 Series H i u h I Lov 1 -6J 1 Low | -87 I NO? |_ 1988 I dxgfa l HAR | APR | HAY 1 JUN | JUL 1 AUG 1 SEP | OCT I 1 Avq. 1 Total Industry 88.b| 1 72.11 Manufacturing 87.7| 1 Primary processing Advanced processing 1 1 bd.3| 86.01 i Durable manufacturing Stone, clay and glass products Primary metals Iron and steel, subtotal Nonferrous metals, subtotal Fabricated metal products Nonelectrical machinery Electrical machinery Motor vehicles and parts Automobiles Aerospace and misc. trana. eqp. Instrunftonts Other durables Nondurable manufacturing Food and kindred products Textile mill products Paper and products Chemicals and products Petroleum products Rubber and plastics products Other nondurable* Mining Utilities Electric utilities I 89.31 101.91 105.8| 95.6| 85.01 89.01 85.71 97. 11 1 77.01 89.21 87.71 88.81 85.8| 92-11 95.61 88.61 9S.6J 97.51 86.4| i 92.8| 95.61 98.7J 1 67.91 67.1J 67.0| 66.6| 62. 11 64.7| 68.21 63.7J 52.7| I 69.61 74.9| b9.0| • 71.81 77.6| 58.9J b7.7l 69.21 83.7| 59.5| 72.31 1 87.8| 1 82.9| 83.01 1 NOV 1 8b.9| 1 69.5| 1 81.51 82. 1| 82.4 82.7 82.9 .J.U 83.7 83.8 83.7 84.0 84.2 66.5| 1 b6.0| 65.01 69.5| 80.6| 82.21 82.7 82.9 83.3 63.3 84.0 d4.0 84.0 84.3 64.5 tto. 6 87.8 87.4 82.4 87.2 82.5 87.6 82.7 68.0 82.9 63.71 62.91 45.81 37.61 60.6| 61.31 b2.9| 66.91 47.01 36.61 70.71 77.8J o9. 1| 78.7J 78.31 79.61 78.6| 81.21 77.61 78.11 78.11 78.1| 91.71 89.41 92.41 74.21 76.5J 70.61 80.21 67.6( 68.81 71.2| 78.9J 83.51 82.21 85.01 88.51 78.91 86.91 84.81 66.0| 95.21 76.91 1 88.51 8 7.6| i 78.0| 78.21 86.7| • 86.91 88.01 1 89.1J 65. 1( 1 86.31 66.61 97-1| 100.3| 9 1 . 11 87.4| 86.01 89.9| 93-3| 93.3| 67.11 86.91 81.0| • 1 6 7.0| 85.11 86.31 92.71 81.7| 80.1 | I 87.01 60. 0| 86.9 80.7 8b. 9 81.2 87.0 81.7 d1.7 79.91 61.9| 88. 6| 88.8| 88. 31 79.4| 76. 1| 76.5| 80.41 70.2| 86.21 79.9| 82.0| 80.6 82.7 83.7 83.2 84.3 82.4 79.0 76.5 79.3 65. 8 87.6 80.0 82.4 80.9 81.9 83.7 83.5 84.1 82.3 80.1 77.3 80.5 69.3 86.6 80.2 82.2 81.6 81.8 87.5 88.0 66.6 82.9 81.4 77.4 83.8 75.3 86.4 80.3 82.2 81. / 83.0 65.8 83.0 89.5 83.1 61.6 77.4 63.3 75.3 86.2 61.0 81.3 82.3 62.1 89-5 89.7 89.3 83.8 62.4 78.2 81.5 71.4 86.7 62.5 81.4 62.3 82.3 86.8 88.2 89.6 84.0 82.7 78.4 82.0 70.7 85.8 62.5 80.9 82.5 82.4 90.9 90.9 90.8 84.1 82.9 78.1 82.6 74.2 85.8 82.9 80.7 82.9 82.1 92.0 93.4 90.0 84.2 82.9 78.5 84.5 77.0 85.8 83.2 81.0 65.61 79.81 92. 71 95.81 84.71 84.2| 88.81 86.4| 1 85.8 80.2 91.4 95.1 85.0 88.5 88.4 86.2 85.9 79.6 91.3 94.9 86.2 88.5 88.0 86.3 85.4 79.7 88.9 94.8 86.1 85.5 88. 1 85.4 65.5 79.7 88.3 *i3. 9 86.7 84.4 86.2 65. 6 66.4 60.6 90.2 95.9 88*1 85.2 88.3 85.8 6b. 4 80.4 89.3 94.8 88.6 86.0 87.8 86.1 86.2 80.1 88.4 94.4 88.8 83.8 87.3 86.4 86.4 80.6 87.7 94.8 89.1 86.1 87.3 86.2 80.6 82.3 80.8 81.2 82.5 62.2 82.2 81.6 82.2 81.0 83.2 79.3 82.2 79.7 83.5 60.6 64.9 81.5 66.4 83.9 88.9 80.3 84.4 80.8 84.6 81.0 84.8 i 1 77.71 83.01 81.61 81.5| 1 81.2| 82.81 1 83.1 92.4 85.0 83.1 78.3 65.4 76.7 85.9 83.2 81.0 86.5 84.3 85.9 Table 2 Output, Capacity, and Capacity Utilization Quarterly, seasonally adjusted Series 1987 Q3 Total Industry 131.0 Manufacturing 135.7 Primary processing Advanced processing Durable manufacturing Stone, clay and glass products Primary metals Iron and steel, subtotal Nonferrous metals, subtotal Fabricated metal products Nonelectrical machinery Electrical machinery Motor vehicles and parts A U lOfTiODt 1*38 Aerospace and misc. trans, eqp. Instruments 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 OUTPUT 1 1988 1 yi U2 U3 1 1 1 3 3 . 2 | 1 3 4 . 5 136.0 138.41 Q4 138.11139.6 1 141.5 144.0| 119.2 122.21123.0 123.9 125.81 145.d 147.61149.7 152.3 154.91 i 133.7 118.0 83.7 73.8 102.2 110.8 155.4 173.4 108.0 92.2 152.9 145.2 133.1 136.6 138.9 118.8 148.4 141.8 93. 5 1b5.7 140.7 136.91138.4 119.81121.5 90.5| 86.0 81.21 76.5 108.01104.1 114.31117.8 158.711b3.7 175-71 1/7.2 113.41110.6 102.81 92.6 152.91153.9 146.71149.0 135.41137.8 I 139.71141.4 139.01141.4 117.41116.2 146.31 149.0 144.6J146.6 94.7| 96.9 169. 1j 171.7 1U1.41143.0 100.7 104.31102.5 141.0 122. 1 87.3 75.8 109.1 119.7 169.6 179.1 117.9 109.9 151.5 151. o 138. 1 142.3 140.9 115.4 149. 1 149.5 95.9 173.4 144.5 143.31 122.51 91.81 80.21 113.7J 122. 11 174.1| 181.81 117.51 106.21 151.91 157. 1| 137.61 1 145.01 143.3| 116. 4J 151.41 154.61 94.91 175.3! 147.21 i 103.4 103.91 11 I.o 112.31114.7 111.9 115.01 130. * W L . bi 130.0 129. b 135. 1| CAPACITY 1 1988 1 Q2 01 Q3 1 1 161.3 162.21163.1 164.2 165.21 1 166.7 167.71168.9 170.2 1 7 1 . 5 | 1 139.8 140.61141.6 142.7 1 4 3 . 9 | 182.9 184.1(185.4 186.7 188. 1| 1 170.2 171.1|172.0 173.0 174.0| 146.1 147.2|147.9 148.4 148.91 102.6 101.6| 101.6 102.u 1O2.3| 9 1 . 1 8 9 . 8 | 89.2 89.3 89.51 124.1 124.61125.1 125.8 126.4} 142.3 143.0|143.8 144.6 145.51 20 5.4 2 0 6 . 7 ( 2 0 8 . 0 209.3 2 1 0 . 6 | 228.9 2 2 9 . 6 | 2 3 0 . 5 231.5 232.5| 141.2 141.7| 142.3 142.8 143.3| 148.6 149.3-1 149.8 149.9 1i>0.1| 172.1 173.21 174.2 175.3 176.41 183.3 184.91186.6 188.3 190. 11 164.0 165.8|167.3 168.6 1 6 * . 9 | i 1 161.7 163.1|164.6 166.3 168.01 172.8 174.1|175.4 176.8 178.21 126.1 126.61 127.5 128.9 130.41 153.6 154.91 156.2 157.7 159.21 169.6 170.5| 171.7 173.2 174.61 110.5 110.81 111.1 111.4 111.6| 188.8 191.31193.9 196.8 199.71 161. to 163.91• 166.2 168.6 170.91 1987 U3 1987 Q3 UTILIZATION 1968 414 Q3 Q1 1 81.2 82.11 82.4 82.8 83.8 81.4 82.31 82.7 83.2 84.0 65.3 79.7 86.91 80.11 1 60.0| 81.41 68.8| 90.41 86.7J 79.9| 76.81 76.51 80.0J 68.9| 86.9 80.7 86.8 81.5 87.4 62.4 80.4 82. 1 84.7 85.8 83.2 81.9 78.7 76.9 77.6 61.8 8 8 . 3 | 88.3 7 9 . 3 | 79.9 81.71 82.3 81.5 82.2 85.7 84.8 66.8 82.7 81.0 77.4 82.5 73.3 66.4 80.5 81.9 82.4 82.3 89.7 89.6 89.9 64.0 82.6 78.2 82.0 72.1 86.1 82.6 81.0 87.8 87.0 85.61 79.8J 92.81 95.7| 84.81 d5.4| 88.4| 86.3| 85.9 80.6 91.1 95.4 85.3 87.2 88.5 86.1 85.6 79.7 89.5 94.5 86.3 86.1 88.1 85.7 86.3 80.4 89.3 95.1 88.5 85.0 87.8 66.1 76.5 80.7 81. b 81.0 82.4 77.8 75.7 75.7 76.5 62.0 88.6 79.2 81.2 85.7 80.4 94.2 96.b 83.6 84.b 1 129.0 128.4|127.7 127.0 126.21 78.0 81.21 80.3 81.5 82.3 138. B 139.4(139.8 152.9 154.0J154.8 1 140. 1 155.4 140.41 156.1| 60.5 65.1 60.61 82.0 8 2 . 2 | 84.0 79.9 83.5 81.9 86.6 Note. Data for output are percentages of 1977 output as shown in the Federal Reserve's seasonally adjusted Indexes of industrial production. Capacity is also expressed as a percentage of Q4 1977 actual output. Capacity utilization percentages are calculated as ratios of production to capacity. INDUSTRIAL MATERIALS Table 3 Capacity Utilization Monthly, seasonally adjusted, percent of capacity Series Industrial Materials Durable goods materials Metal materials Raw steel Aluminum Nondurable goods materials Textile, paper, and chemical materials Pulp and paper materials Chemical materials Energy materials 1973 I 1975 1 1978 1 1982 | 1967 1 1987 | Low J - 8 0 1 Low l -87 | MOV | . -1288 I Hivih I AYQ. I HAE I I 92.0) I 1 91.81 I 99.2| 1 106.01 95.71 1 1 91.11 I 92.8| 1 98.41 92.51 I 1 94.6| 1 I 70.5| 1 1 64.41 1 67.11 1 66.41 73.01 1 1 66.7| 1 64.8| 1 70.6J 64.4) 1 1 86.91 1 I 89.11 1 1 89.81 1 93.61 1 98.91 97.4| I 1 86.11 1 89.41 1 97.31 87.9| I 1 94.01 J 1 68.51 I 1 o0.9l 1 45.71 1 36.11 58.8| 1 1 70.71 1 68.8| I 79.9| 63.51 1 1 82.31 1 I 82.21 I 1 1 79.0| t 77.71 1 1 80.21 87.3J J 1 1 83.41 1 83.81 I 91.71 81.01 I 1 1 89.01 J I 82.9| 1 , I AUG I SEP I OCT 1 A P E I HAT NOV 82.4 82.9 83.0 83.2 84.4 84.3 84.1 84.4 84.8 79.01 1 83.31 79.1 79.7 80.8 80.7 81.7 81.4 81.9 82.3 b2.7 78.3 79.3 82.1 UO.tf 84.9 83.4 86.0 87.1 87.4 89.7| 94.81 I 86.5 99.2 83.4 99.5 89.7 98.8 87.5 99.5 *5.1 9d.O 97.5 100.8 100.5 100.3 90.8 99.8 89.01 1 91.01 I 98.7| 88.6| 1 88.3 88.7 87.7 87.4 d8.9 dd.8 88.2 88.7 89.0 89.9 90.1 88.8 88.6 90.4 90.3 89.5 90.0 90.2 97.8 87.5 98.1 88.0 98.1 86.9 97.1 100.0 87.0 b8.8 9e.4 89.0 97.9 88.3 98.2 89.1 84.1 84.5 83.3 84.¥ do.6 85.1 84.7 65.71 1 86.2 85.$ Table 4 Output, Capacity, and Capacity Utilization Quarterly, seasonally adjusted UUlJfUI Series Industrial Materials Durable goods materials 1987 U3 Q4 1988 Q1 83.8 Raw steel Aluminum 77.0 83.6 91.4( 8 6 . 2 1 79.5» 7 7 . 7 88.41 9 2 . 5 1 1 Textile, paper and chemical materials Pulp and paper materials Chemical materials Energy materials Q3 1 1 1 122.51122.5 124.0 126.5| 1 1 1 1 125.7 130.31131.5 134. 1 137.11 119.2 Metal materials Nondurable goods materials 1 02 128.2 130.11129.4 1 130.5 133.01131.6 J 144.6 145.11145.7 130.2 135.51 133.5 100.0 88.1 92.71 1987 Q3 85.91 97.2J 1 4 1 1 102.11100.9 100.6 102.4| gj 1987 Q3 1988 Q1 02 Q3 81.U 82.9| 82.5 83.0 84. 3 76.7 I I 79.11 79.4 80.4 81. 6 80.8 84.8 Q4 I 109.4 90.8 94.4 144.7 1 132.4 135.3| 1 145.9 148.91 1J5.7 1J9.bJ 02 147. 81 148.5 149.3 150.1 1 1 1 163.9 164.7| 165.7 166.8 167.9 1 1 130.4 132.91 1988 01 147.2 1 77. 1 94.8 04 144.4 145.1 150.9 120.1 1 108.91 108.8 1 89.4| 88.7 93.91 94.3 1 1 145.61 146.8 1 145.41 146.7 1 146.2\ 147.6 152.01 153-5 1 1 119.7 109.1 109.4 76.5 84.01 79.2 88.7 96./ 84.8 86.6 88.91 94.11 1 1 89.3| 1 91.5| 1 99.2J 89. 11 1 1 88.7 95.5 148.3 149.8 I 88.6 148.5 150.2 I 90.4 149.2 150.7 155.4 157.3 99.6 86.3 119.4 119. 1 83.3 87.5 98.1 96. 8 86.9 99.2 100, 5 88.1 87.9 88. 7 89.7 89.2 90. 1 98.7 87.0 97.8 87.3 98. 8 88. 7 85.21 84.3 84.2 86. 0 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 raties 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 rates. Groupings. Estimates of capacity and industrial production for manufacturing industries are aggregated to primary processing and advanced processing industries, to durable 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 govern men t-owned-and-operated ordnance facilities. Industrial materials are items produced and used as inputs by manufacturing plants, mines, and utilities. Industrial materials include many of the items Included In t ' e primary processing grouping of manufacturing, as well as some of the output of the advanced processing industries, mines, and utilities—such as iron ere 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 1989. At 9:15 a.m. on January 18, February 15, March 16, April 14, May 15, June 15, July 14, August 16, September 15, October 17, November 14, and December 15.