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FEDERAL RESERVE statistical release For release at 9:15 a.m. (EST) December 15,1989 G.3 (402) CAPACITY UTILIZATION Manufacturing, Mining, Utilities, and Industrial Materials Capacity utilization in manufacturing, mining, and utilities edged down 0.1 percentage point in November to 82.7 percent, its lowest rate since April 1988. The operating rates for both manufacturing and utilities decreased slightly in November while the rate for mining rose for the fifth consecutive month. The uptrend in mining utilization since the spring reflects the return to work of striking coal miners and, more recently, steady output for oil and gas extraction despite declining capacity. Utilization for manufacturing, at 82.7 percent in November, remained well below its September level as a major strike in the aircraft industry lasted throughout most of November. Within manufacturing, the operating rate for advanced processing industries held steady at 81.4 percent, and the rate for primary processing fell 0.3 percentage point to 85.5 percent. Although the operating rate for advanced processing as a whole was unchanged, the rates for several of its components changed markedly. Utilization for nonelectrical machinery rebounded in November after output in October had been disrupted by the California earthquake. The operating rate for aerospace and miscellaneous transportation equipment also recovered somewhat as a result of the settlement of a strike late in the month. A further slowdown at auto assembly facilities and auto parts manufacturers during November reduced utilization for the motor vehicles and parts industry, despite an increase in truck production. The operating rate for auto assemblies has been below 70 percent for most of the summer and autumn. The lower rate for primary processing resulted from drops in utilization for both primary metals, which has been affected by the slowdown in auto production, and petroleum products. The operating rate for primary metals fell for the third consecutive month to 82.1 percent. Utilization for primary metals has trended down since October 1988, when it reached a peak of 91.9 percent after climbing more than 20 percentage points since the middle of 1986. Utilization at producers of industrial materials declined 0.3 percentage point in November to 82.9 percent, with the decreases broadly based. The operating rate at producers of metal materials has fallen since August, with declines especially large at aluminum producers, where utilization had averaged near 100 percent for more than a year. Capacity Utilization: Summary Percent of capacity, seasonally adjusted Series 1973 High 1975 Low 1978 -80 High 1982 Low 1967 -68 Ave. 1989 Aug Sep Oct Nov 88.6 72.1 86.9 69.5 81.6 83.9 83.4 82.8 82.7 Manufacturing Durable manufacturing Nondurable manufacturing 87.7 87.4 88.8 69.9 67.9 71.8 86.5 86.3 87.0 68.0 63.7 74.2 80.7 78.8 83.6 84.2 82.8 86.2 83.7 82.1 85.9 82.8 80.4 86.1 82.7 80.7 85.6 Mining Utilities 92.8 95.6 87.8 82.9 95.2 88.5 76.9 78.0 86.5 86.7 82.4 80.0 83.1 80.6 83.5 81.1 83.8 80.9 Materials 92.0 70.5 89.1 68.5 82.3 83.9 83.5 83.2 82.9 Total industry CAPACITY UTILIZATION NOVEMBER DATA SEASONALLY ADJUSTED, PERCENT 110 110 TOTAL INDUSTRY TOTAL MATERIALS 90 90 70 70 50 1974 1976 1978 1980 1982 1984 1986 1988 1974 1976 1978 1980 1982 1984 1986 50 1988 110 110 MINING 4^ UnLITIES 90 . 90 70 70 MANUFACTURING 50 1974 1976 1978 1980 1982 1984 1986 1988 1974 1976 1978 1980 1982 1984 1986 50 1988 110 110 MANUFACTURING ELECTRICAL MACHINERY NONDURABLE 90 90 . 70 70 DURABLE \f NONELECTRICAL MACHINERY 50 1974 1976 1978 1980 1982 1984 1986 1988 no 1974 1976 1978 1980 1984 1986 50 1988 110 AyL TEXTILE, PAPER, AND CHEMICAL MATERIALS 1982 ALUMINUM y 90 90 ! /' \l W 70 v ^* 1976 1978 1980 1982 / v il 1 ^ V \ i >/ v TV RAW STEEL 1974 k 70 50 30 n r 1984 1986 1988 1974 1976 1978 1980 \ 1982 / 50 1984 1986 1988 30 MANUFACTURING, MINING AND UTILITIES TabSa 1 Capacity Utilization MQnthlv. seasonally adjusted. percent ofcai oacity 1973 1975 1978 -80 Low High Series High 1982 Low 1967 -88 Ave. 1988 Nov 1989 Mar Apr May Jun Jul Aug Sep NoY 88.6 72.1 86.9 69.5 81.6 84.1 83.8 84.2 84.0 84.0 83.7 83.9 83.4 82.8 82.7 87.7 69.9 86.5 68.0 80.7 84.4 84.1 84.5 84.3 84.4 84.0 84.2 83.7 82.8 82.7 91.9 86.0 68.3 71.1 89.1 85.1 65.0 69.5 82.0 80.2 88.1 82.6 86.4 83.0 86.8 83.5 88.2 83.4 86.2 83.5 86.7 82.9 86.6 83.2 86.0 82.8 85.8 81.4 85.5 81.4 87.4 89.3 101.9 105.8 95.6 85.0 89.0 85.7 97.1 67.9 67.1 67.0 66.6 62.1 64.7 68.2 63.7 52.7 78.1 82.9 81.6 83.0 83.5 90.4 90.2 90.7 84.8 82.8 78.0 85.5 76.7 85.6 83.6 81.7 32.6 83.6 85.6 84.1 87.5 83.4 85.5 77.3 83.2 72.2 86.2 83.1 79.8 83.0 82.9 87.1 85.1 89.7 82.8 86.0 77.4 84.2 75.2 86.9 83.4 80.7 82.9 82.3 84.1 80.8 88.6 83.7 86.6 77.1 82.5 73.1 87.3 83.7 81.2 82.9 82.2 84.0 80.2 89.1 83.7 86.8 77.1 80.1 69.6 87.8 84.1 81.9 82.4 81.5 85.6 82.8 89.4 83.7 86.2 76.7 75.9 61.8 88.3 83.9 81.7 82.8 82.0 86.5 83.2 91.0 83.5 86.5 77.6 78.4 65.8 87.8 82.7 81.5 82.1 81.1 85.3 82.4 89.2 82.8 85.8 77.1 77.2 70.7 86.9 81.7 81.2 80.4 81.5 84.5 82.6 87.0 82.0 83.9 76.4 75.4 69.8 77.7 81.5 81.1 80.7 69.6 74.9 69.0 63.7 62.9 45.8 37.6 60.8 61.3 62.9 66.9 47.0 36.6 70.7 77.8 69.1 78.8 78.5 79.9 79.0 81.5 78.0 78.2 78.1 78.2 77.0 89.2 87.7 86.3 86.6 97.1 100.3 91.1 87.4 86.0 89.9 93.3 93.3 87.1 88.9 81.0 88.8 85.8 92.1 95.6 88,6 99.6 97.5 86.4 71.8 77.6 58.9 67.7 69.2 83.7 59.5 72.3 87.0 85.1 88.3 92.7 82.9 91.7 89.4 92.4 74.2 76.5 70.6 80.2 67.6 68.8 71.2 78.9 83.6 82.1 85.2 88.8 79.3 86.9 85.0 86.0 86.4 81.1 88.9 93.7 89.1 84.9 87.6 85.7 86.3 80.1 90.1 93.2 88.7 86.5 85.4 87.1 86.5 80.6 92.0 92.2 88.3 86.7 85.8 87.8 86.2 80.7 92.8 91.6 87.3 86.3 86.6 86.9 86.4 80.9 92.8 91.3 87.9 87.2 87.0 87.0 86.3 80.4 92.5 92.4 88.8 87.4 86.6 86.1 86.2 80.7 92.1 92.3 88.0 36.9 86.8 85.9 85.9 80.8 92.0 92.4 86.6 87.3 86.5 86.3 86.1 81.2 91.2 92.5 87.4 88.6 86.2 85.7 85.6 Mining 92.8 87.8 95.2 76.9 86.5 83.3 81.2 82.0 81.8 81.5 82.1 82.4 83.1 83.5 83.8 Utilities Electric utilities 95.6 98.7 82.9 83.0 88.5 87.6 78.0 78.2 86.7 87.9 80.8 84.0 83.3 86.9 82.9 86.8 81.8 85.8 80.8 84.9 80.5 85.0 80.0 84.4 80.6 85.0 81.1 85.4 80.9 85.1 Qll Qlll 1988 Qlll Capacity 1989 QIV Ql Oil Qlll 1988 Qill Utilization 1989 Ql QIV Qll Qljf Total industry Manufacturing Primary processing Advanced processing Durable manufacturing Stone, clay & glass prod. Primary metals Iron and steel Nonferrous metals Fabricated metal products Nonelectrical machinery Electrical machinery Motor vehicles and parts Autos Aerosp. & misc. transp. eq. Instruments Other durables Nondurable manufacturing Foods Textile mill products Paper and products Chemicals and products Petroleum products Rubber & plastics prod. Other nondurables 82.1 82.0 85.5 76.1 74.9 64.3 79.1 81.1 80.9 87.8 85.2 Table 2 Output, Capacity, and Capacity Utilization Quarterly, seasonally adjusted 1988 QIH QIV Output 1989 Ql 138.4 139.9 140.7 141.8 142.2 165.2 166.3 167.5 168.7 169.9 83.8 84.1 84.0 84.1 83.7 144.0 145.8 147.0 148.3 148.8 171.5 172.8 174.3 175.7 177.2 84.0 84.4 84.4 84.4 84.0 Primary processing Advanced processing 125.9 154.9 127.7 156.7 127.8 158.6 127.6 160.3 128.9 161.1 143.9 188.1 145.2 189.5 146.5 191.0 147.8 192.6 149.1 194.2 87.5 82.4 87.9 82.7 87.3 83.0 86.4 33.5 86.4 83.0 Durable manufacturing Stone, clay & glass prod. Primary metals Iron and steel Nonferrous metals Fabricated metal products Nonelectrical machinery Electrical machinery Motor vehicles and parts Autos Aerosp. & misc. transp. eq. Instruments Other durables 143.3 122.5 91.8 80.2 113.7 122.1 174.0 181.8 117.5 108.2 152.0 157.0 137.6 145.2 124.4 92.3 80.5 114=5 124.1 175.7 182.0 123.4 116.9 152.3 159.8 139.9 146.0 125.8 90.9 79,1 113.2 124.3 180.8 181.4 122.9 110.6 153.7 161.4 138.5 147.1 124.2 88.2 74.4 114.4 124.4 186.2 181.9 119.3 108.9 157.1 164.3 141.3 147.2 123.1 89.6 75.6 116.0 125.2 187.1 182.6 112.4 99.0 158.8 164.3 142.6 174.0 148.9 102.3 89.5 126.4 145.7 210.6 232.5 143.3 150.1 176,4 190.1 169.9 175.0 149.4 102.6 89.6 127.1 146.9 211.9 233.5 143.8 150.2 177.5 191.8 171.2 176.1 150.0 103.1 90.0 127.7 148.0 213.5 234.5 144.4 150.2 178.6 193.9 172.5 177.4 150.5 103.7 90.6 128.4 149.1 215.4 235.6 145.0 150.0 179.9 196.2 173.8 178.6 151.1 104.3 91.3 129.0 150.2 217.2 236.7 145,7 149.8 181.1 198.5 175.1 82.4 82.2 89.7 89.6 89.9 83.9 32.6 78.2 82.0 72.1 86.2 82.6 81.0 82.9 83.2 90.0 89.8 90.1 84.5 82.9 78.0 85.8 77.8 85.8 83.3 817 82.9 83.9 88.2 87.9 88.6 83.9 $4.7 77.3 85.1 73,6 S6.0 83.2 80.3 83.0 82.5 85.1 82.0 89.1 83.4 88.5 77.2 82.3 72.6 87.3 83.7 81.3 82.4 81.5 85.8 82.8 89.9 83.3 86.1 77.1 77.2 66.1 87.7 82.8 81.5 Nondurable manufacturing Foods Textile mill products Paper and products Chemicals and products Petroleum products Rubber & plastics prod. Other nondurables 145.0 143.3 116.6 151.4 154.5 94.9 175.3 147.2 146.7 145.2 117.4 151.4 157.4 96.4 177.3 143.3 148.4 146.1 119.8 152.4 158.9 97.1 175.8 152.3 149.9 147.2 123.3 150.3 159.1 97.4 180.3 155.3 151.0 148.1 123.3 152.9 161.1 98.1 183.2 155.3 168.0 178.2 130.4 159.2 174.9 111.6 199.7 170.9 169.8 179.6 131.8 160.7 176.7 111.9 202.6 173.3 171.6 181.0 132.7 162.3 178.8 112.1 205.5 175.7 173.5 182.4 133.2 163.9 181.1 112.3 208.5 178.1 175.3 183.7 133.7 165.5 183.5 112.5 211.5 180.4 86.3 80.4 89.4 95.1 88.5 85.0 87.8 86.1 86.4 80.8 89.1 94.2 39.1 86.2 87.5 35.6 86.5 80.7 90.2 93.9 88.9 86.6 85.5 S6J 86.4 30.7 92.5 91.7 87.9 86.7 86.5 87.2 86.1 80.6 92.2 92.4 87.8 87.2 86.S 86.1 Mining 103.9 104.2 101.8 102.0 102.6 126.3 125.7 125.1 124.7 124.3 82.3 82.9 81.3 81.8 82.5 Utilities Electric utilities 115.1 135.2 114.3 132.4 116.0 134.4 115.7 135.8 113.9 134.8 140.4 156.1 140.7 156.7 141.0 157.4 141.4 158.2 141.7 159.0 81.9 86.6 81.3 84.5 82.3 85.4 81.8 85.9 80.4 84.8 Series Total industry Manufacturing Note. Data for output arc 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 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 ca WCftY Series 1973 High 1975 Low 1978 -80 High 1982 Low 1967 -88 Ave. 1988 Nov 1989 Mar Apr May Jun Jul Aug Sep Oct Nov 92.0 70.5 89.1 68.5 82.3 85.1 83.7 84.2 83.8 83.6 83.7 83.9 83.5 83.2 82.9 91.8 99.2 106.0 95.7 64.4 67.1 66.4 73.0 89.8 93.6 98.9 97.4 60.9 45.7 36.1 58.8 79.1 77.9 80.7 87.8 82.7 86.9 89.3 100.5 80.9 81.5 86.3 99.7 81.3 83.6 84.4 101.5 81.0 79.8 83.7 98.4 81.1 80.6 85.4 99.6 81.3 82.3 85.4 101.2 81.7 82.7 89.0 99.9 81.2 81.9 84.0 96.4 80.1 81.4 84.6 93.5 79.7 79.1 Nondurable goods materials Textile, paper, & chem. mat. Pulp & paper materials Chemical materials 91.1 92.8 98.4 92.5 66.7 64.8 70.6 64.4 88.1 89.4 97.3 87.9 70.7 68.8 79.9 63.5 83.6 84.1 92.0 81.3 89.4 90.9 96.7 90.5 88.8 90.2 95.3 89.7 89.2 90.7 94.5 90.1 88.7 89.6 93.2 88.4 88.7 89.8 93.7 88.5 89.2 90.6 95.0 89.5 88.8 90.1 95.1 88.6 87.5 88.8 95.2 86.7 88.3 89.6 95.4 87.9 87.9 89.0 Energy materials 94.6 86.9 94.0 82.3 88.9 86.2 85.4 86.0 85.5 83.8 83.9 84.3 85.1 85.5 85.3 Capacity 1989 Ql QIV Qll Qlll 1988 Qlll Utilization 1989 QIV Ql Qll Qlll Materials Durable goods materials Metal materials Raw steel Aluminum Table 4 Output, Capacity, and Capacity Utilization Quarterly, seasonally adjusted Output 1988 Qlll QIV Ql Qll Qlll 1988 Qlll 126.5 128.0 127.6 127.9 128.5 150.1 150.8 151.7 152.6 153.5 84.3 84.9 84.1 83.9 83.7 Durable goods materials Metal materials Raw steel Aluminum 137.1 92.7 85.9 97.2 139.2 94.8 79.5 97.8 138 6 92.3 79.8 98.5 139.0 90.0 76.2 99.1 140.4 91.4 78.2 98.9 167.9 109.5 88.9 96.7 169.0 109.8 89.2 97.9 170.1 110.2 89.6 98.7 171.3 110.6 90.2 99.2 172.5 111.0 90.8 99.7 81.6 84.8 96.8 100.5 82.4 86.3 89.1 99.9 81.5 83.8 89.0 99.7 81.1 81.4 84.5 99.8 81.4 82.3 86.1 99.2 Nondurable goods materials Textile, paper, & chem. mat. Pulp & paper materials Chemical materials 132.8 135.3 148.9 139.4 135.4 138.1 148.6 144.1 136.3 139.2 148.4 145.4 137.1 139.8 146.1 145.7 137.9 141.1 149.9 146.5 149.8 150.2 150.7 157.4 151.2 151.8 152.3 159.3 152.7 153.5 154.0 161.4 154.2 155.3 155.8 163.7 155.8 157.0 157.6 165.9 88.6 90.0 98.8 88.6 89.5 91.0 97.6 90.5 89.3 90.7 96.4 90.1 88.9 90.0 93.8 89.0 88.5 89.9 95.1 88.3 Energy materials 102.5 102.0 100.7 100.7 99.7 119.0 118.7 118.4 118.3 118.1 86.0 86.0 85.0 85.1 84.4 Series Materials Explanatory Notes. Definition. This release contains estimates of output, capacity, and capacity utilization for the nation's factories, mines, and electric and gas utilities. Outi 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 rates. Groupings. Estimates of capacity and industrial production are aggregated to primary 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 government-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 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 16th 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 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. Historical utilization rates since 1967 (1948 in the case of manufacturing) are included in the statistical supplement to the October 1987 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 1990. At 9:15 a.m. on January 17, February 16, March 16, April 17, May 15, June 15, July 17, August 16, September 14, October 17, November 14, and December 14.
