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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 1 88.01 1 1 93.61 1 85.4| 1 MANUFACTURING* TOTAL PRIMARY PROCESSING ADVANCED PROCESSING J MANUFACTURING, TOTAL PRIMARY PROCESSING ADVANCED PROCESSING 1975 1977 SEP. 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 AUG. 69.6 OUTPUT 1977 I 11 1976 IV JULY 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 85.6| 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 60.0 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 87.0 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 80.3 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 83.6 84.9 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 107.4 108.6 116.4 109.4 146.9 149.5 154.6 154.4 151.4 153.9 159.9 159.2 112.1 130.2 177.3 111.3 131.7 181.6 110.9 134.3 191.8 112.3 135.1 189.5 122.0 122.0 122.6 123.4 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,
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