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FEDERAL

RESERVE

statistical

release
For immediate release
February 16, 1978

G.3

CAPACITY UTILIZATION: MANUFACTURING AND MATERIALS
January 1978

Capacity utilization in manufacturing declined by an estimated 1.2
percentage points in January to 81.8 per cent. Declines in operating rates were
widespread throughout manufacturing,. Much of the over-all reduction resulted
from a further sizable decline in production of motor vehicles and weatherrelated interruptions of productive activity.
The January 1978 value for manufacturing capacity utilization is the
lowest since February of last year. A large drop in utilization rates also
occurred in January a year earlier, when production was effected by inclement
weather. Subsequently, manufacturing utilization rates rose rapidly in the
spring.
Capacity utilization in the industrial materials sector decreased by
percentage point to 80.9 per cent. Weather-related disruptions, continuing
declines in coal production, and curtailments in output of some materials used
in motor vehicle production were instrumental in this decline in capacity utilization.
08

INDUSTRIAL MATERIALS

MANUFACTURING

PER CENT

100

TOTAL

ENERGY

—

80

60
100

NONDURABLE GOODS

PRIMARY PROCESSING

80

ADVANCED PROCESSING


1966
1969


DURABLE GOODS
60

1972

1975

1978

1969

1972

1975

1978

OUTPUT, CAPACITY AND CAPACITY UTILIZATION
Output and Capacity are Percentages of 1967 Output; Capacity Utilization is a Per Cent of Capacity.
Seasonally Adjusted

Manufacturing
MONTHLY CAPACITY UTILIZATION
SERIES

19731

1975

1977

JULY
1
88.01
1
1
93.61
1
8.|
54
1

MANUFACTURING* TOTAL
PRIMARY PROCESSING
ADVANCED PROCESSING

J

MANUFACTURING, TOTAL
PRIMARY PROCESSING
ADVANCED PROCESSING

OCT.

NOV.

DEC.

1978
JAN.
81.8

80.4

80.9

82.1

82.3

82.8

83.0

83.1

82.9

82.9

82.9

82.9

83.0

68.1

80.9

82 .0

84.0

84.4

85.5

85.5

85 .3

85.1

84.4

84.7

84.6

84.4|

83.2

70.4

80.1

80.3

81.0

81.1

81.4

81.6

82.0

81.6

82.0

81.8

82.0

1
82.21

81.1

1976
IV

UTILIZATION
1977
I
II

80.6

81.2

III

131.2

133.1

136.9

138.7

138.8

140.1

146.3

147.3

127.2

SEP.

69.6

OUTPUT
1977
I
11

1976
IV

AUG.

129.3

132.0

134.2

CAPACITY
1
| 1976 1977
IVI
IV
I
11
1
139.91
162.8 164.0
165.6
1
1
171.8
148.11 168.8 170.2
1
162.2
135.61
159.6 160.7
1

III

167.1
173.5
163.8

1
1
IVI
I
168.71
1
J
175.11
1
165.31
1

82.7

III

IV

83.0

82.9

82.2

82.3

85.1

84.9

84.6

79.7

80.5

81.4

81.9

82.0

1
DEC.I
1
81.7|
1
1
79.7|
1
75.2|
1
1
8 . |
5 6
1
84.11
1
83.6|
88.9|
83.0|
1
1
81.6|

1978
JAN.

Industrial Materials
MONTHLY CAPACITY UTILIZATION
SERIES

19731
HIGHl

1975
LOW

1977
JAN.

FEB.

MAR.

APR.

MAY

JUNE

JULY

AUG.

SFP.

OCT.

NOV.

69.7

79.4

80.2

81.6

82.1

82.7

83.0

82.9

82.0

82.0

82.4

82.3

1

MATERIALSt TOTAL
DURABLE GOODS MATERIALS
BASIC METAL MATERIALS
NONDURABLE GOODS MATERIALS
TEX.t PAPER, t CHEM. MAT.
TEXTILE MATERIALS
PAPER MATERIALS
CHEMICAL MATERIALS
ENERGY MATERIALS

93.11
1
1
92.51
1
97.71
1
1
94.61
1
94.5|
1
94.4|
100.51
93.8)
I
1
94.61
1
1976
IV

MATERIALS, TOTAL

131.9

64.3

75.6

76.0

77.8

78.7

79.4

79.9

6.
00

78.9

78.9

79.5

79.4

66.1

73.7

72.9

78.4

79.3

81.2

80.2

77.6

74.8

73.4

75.6

74.2

67.8

82.7

85.7

87.0

87.0

87.7

8 .
7 0

66.4

86.7

85.9

85.8

86.1

65.5

81.5

83.8

85.9

86.0

86.7

86.1

85.1

85.3

84.7

84.9

84.3

58.0
71.8
64.7

78.7
85.9
81.3

77.7
69.6
84.0

79.9
89.7
86.6

78.8
88.3
87.5

78.8
90.7
87.9

76.7
89.2
67.8

77.4
89.0
86.4

78.7
89.7
85.9

8 .
0 3
89.1
84.8

82.9
88.3
84.6

82.5
86.8
84.3

62.7

85.5

83.7

84.4

83.9

84.5

85.8

86.3

8 .
3 6

8.
49

85.2

84.8

1976
IV

UTILIZATION
1977
I
II

80.3

80.4

82.6

82.3

82.2

76.5

76.5

79.4

79.2

79.6

74.4

75.0

80.2

75.3

75.0

84.4

85.1

87.2

86.3

85.8
84.5
83.0
88.0
84.0

OUTPUT
1977
1
11
133.1

137.7

III

138.1

DURABLE GOODS MATERIALS

128.4

129.2

135.1

136.0

BASIC METAL MATERIALS

107.4

186
0.

116.4

109.4

146.9

149.5

154.6

154.4

151.4

153.9

159.9

159.2

112.1
130.2
177.3

111.3
131.7
181.6

110.9
134.3
191.8

112.3
135.1
189.5

122.0

122.0

122.6

123.4

NONDURABLE GOODS MATERIALS

TEX., PAPER, t CHEM. MAT.
TEXTILE MATERIALS
PAPER MATERIALS
CHEMICAL MATERIALS
ENERGY MATERIALS
NOTE:

80.9

CAPACITY
|
1977
| 1976
I
II
IV
IVl
1
165.5
136.81 164.3
166
6.
1
1
137.51 167.8
169.0
170.3
1
109. 1| 144.4
144.8
145.1
1
1
154. 9 174.1
|
175.6
177.2
1
159. 6 182. O 183.6
|
185.4
1
141.4 141.9
118.71 140.6
148.9
134.21 147.9
150.1
218.7
187. 8 213.7 216.2
|
1
I
122.2| 143.9
144.3
144.7

III

167.8
171.6
145.3
178.8
187.1
142.5
151.3
221.2

145.2

1
1
IVI
1
168.91
1
1
172.81
1
145.51
1
1
180.41
1
188.91
1
143.01
152.51
223.61
1

145.71
I

III

83.2

83.8

86.3

85.1

79.7
88.1
83.0

78.7
88.4
84.0

78.1
89.5
87.7

78.8
89.3
85.7

84.5

84.8

79.0

'

84.4
83.2

81.0

IV

85.0

E S T I M A T E S OF A C T U A L OUTPUT AND C A P A C I T Y OUTPUT ARE BOTH E X P R E S S E D AS P E R C E N T A G E S OF 1967 A C T U A L OUTPUT. E S T I M A T E S OF
CAPACITY U T I L I Z A T I O N IN PER CENT ARE C A L C U L A T E D AS R A T I O S OF (1) THE FEDERAL R E S E R V E D S E A S O N A L L Y ADJUSTED INDEXES OF INDUST R I A L PRODUCTION TO (2) THE CORRESPONDING INDEXES OF CAPACITY. INDUSTRIAL M A T E R I A L S ARE ITEMS BOTH PRODUCED AND USED AS INPUTS BY M A N U F A C T U R I N G PLANTS, M I N E S AND UTILITIES; I N D U S T R I A L M A T E R I A L S COVER M A N Y OF THE ITEMS R E P R E S E N T E D IN THE P R I M A R Y
PROCESSING GROUPING OF M A N U F A C T U R I N G AS W E L L AS SOMfc OF THE OUTPUT OF M I N E S AND U T I L I T I E S — SUCH AS IRON ORE, CRUDE OIL, AND
E L E C T R I C I T Y SOLD TO INDUSTRY.
THE 1973 HIGHS AND LOWS IN CAPACITY UTILIZATION, SHOWN IN THE TABLES ABOVE, ARE SPECIFIC TO EACH SERIES AND MAY OCCUR IN DIFFERENT MONTHS. INDUSTRIAL PLANTS USUALLY OPERATE AT CAPACITY UTILIZATION RATES THAT ARE WELL BELOW 100 PERCENT; NONE OF THE
BROAD AGGREGATE SERIES HAS EVER INDICATED A 100 PERCENT USE OF CAPACITY. CAPACITY UTILIZATION RATES AVERAGED ABOUT 83 PERCENT FOR MANUFACTURING FROM 1955 THROUGH 1977, AND ABOUT 65 PERCENT FOR INDUSTRIAL MATERIALS FOR 1967 THROUGH 1977.
IN MANUFACTURING AS A WHOLE, UTILIZATION RATES AS HIGH AS 90 PERCENT HAVE BEEN EXCEEDED ONLY IN WARTIME. THE PEAK RATES OF UTILIZATION IN 1973 WERE ASSOCIATED WITH SIGNIFICANT UPWARD PRESSURE ON PRICES.
THE CAPACITY UTILIZATION ESTIMATES ARE DESCRIBED, AND HISTORICAL DATA ARE PROVIDED, IN FEDERAL RESERVE MEASURES OF CAPACITY
AND CAPACITY UTILIZATION. THIS PUBLICATION MAY BE OBTAINED FROM PUBLICATION SERVICES, BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, WASHINGTON, D.C. 20551. THE PRICE IS $1.75 PER COPY; FOR TEN OR MORE, $1.50 EACH.




FEDERAL
press

RESERVE

release

For Immediate release

February 16, 1978

The Board of Governors of the Federal Reserve System today
announced publication of a new booklet, Federal Reserve Measures of
Capacity and Capacity Utilization,
This 40-page pamphlet provides a summary description of the
capacity utilization measures published by the Federal Reserve, as veil
as detailed descriptions of the methodologies currently used in compiling
the capacity and capacity utilisation series for both manufacturing and
industrial materials. It also includes an analysis of capacity utilization
developments indicated by these measures, historical data for the output,
capacity and capacity utilization series, and an outline of plans for
future efforts to improve and broaden these measures•
Copies of this booklet may be obtained from Publications Services,
Division of Administration Services, Board of Governors of the Federal
Reserve System, Washington, D.C. 20551. The price is $1.75 per copy; in
quantities of ten or more sent to one address, $1.50 each. Remittances
should be made payable to the Board of Governors of the Federal Reserve
System,