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FEDERAL

RESERVE

statistical

release

For immediate release
February 17, 1977

G.3 (Formerly E.5)

CAPACITY UTILIZATION
Capacity utilization in manufacturing declined by an estimated 1.1
percentage points in January to 79.8 per cent. This decline was mainly due
to the extremely cold weather and the associated shortages of natural gas.
Both primary and advanced processing industries are estimated to have operated
at about 80 per cent of capacity in January, down from about 81 per cent in
December. Since last spring the capacity utilization rate for manufacturing
has remained in the 80 to 81 per cent range.
Capacity utilization in materials also declined by an estimated
one percentage point in January to 79 per cent, with the adverse weather
effects evidently also the major factor in this decline. The January
decline in materials capacity utilization, however, apparently was also in
part an extension of a gradual reduction that has occurred since last
summer. Since then, iron and steel production has dropped 23 per cent and
more modest declines have occurred in production of paper and textile
materials. These particular cutbacks in output appear to have resulted in
part from a shift away from accumulation of stocks of these materials by
users.

MANUFACTURING

INDUSTRIAL MATERIALS

TOTAL

PRIMARY PROCESSING

1065



1968

1971

1974

1977

1968

1971

1974

1977

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

Manufacturing
MONTHLY CAPACITY UTILIZATION
SERIES

19731
H|&Hl

MANUFACTURING, TOTAL
PRIMARY PROCESSING
ADVANCED PROCESSING

1

88.01
I
1
93.61
|
85.4|

i JAN.

FEB.

MAR.

APR.

MAY

JljNE

JULY

AUG. SEP.

OCT.

NOV.

DEC.

1977
JAN.

69.6

78.2

79.2

79.6

79.8

80.3

60.5

60.9

61.1

80.4

79.7

80.6

80.9

79. b

67.8

78.6

60.8

81.0

81.2

61.4

62.1

82.1

62.4

83.1

81.8

61.6

70.5

77.3

76.6

78.7

76.6

79.6

79.3

79.7

60.1

78.9

78.6

79.9

61.21
1
60.9|

79.9

IV

1975
IV

1976
I

159.5

1975 | 1976
LOW

IV

MANUFACTURING* TOTAL

122.5

UTILIZATION

CAPACITY

OUTPUT
1975

1976

1 1
1

I

1
1

126.7

129.4

131.1

131.3

PRIMARY PROCESSING

128.9

133.4

136.6

139.3

138.71 165.0

ADVANCED PROCESSING

119.1

122.9

125.2

126.3

127.41 156.4

160.4

1975

i
i
161.3

7V. 6

rii

ly

iv

162.3

163.2

76.8

166.2

167.5

168.8 170.11

157.2

158.0

158.8 159.61

1

1976
1

11

II
I

IV
80.4

79.0

60.2

8O.6

78.1

8O.2

81.5

82.5

81.6

76'. 1

78.2

7V. 2

79.6

7V. 8

1

j

1

Industrial Materials
MONTHLY CAPACITY UTILIZATION
SERIES

19731

1975

1976

JULY
MATERIALS* TOTAL
DURABLE GOODS MATERIALS
BASIC M E T A L MATERIALS
NONDURABLE GOODS MATERIALS
T E X . * PAPER* £ CHEM. MAT.
TEXTILE MATERIALS
PAPER MATERIALS
CHEMICAL MATERIALS
ENERGY MATERIALS

1
93.11
1
1
92.51
1
97.71
1
1
94.61
1
94.51
1
94.41
100.51
93.81
1
1
94.61

1975
IV

MATERIALS* TOTAL

81.0

80.3

80.1

80.8

80.8

81.2

64.3

72.1

74.0

7-».3

75.4

76.6

76.5

78.5

78.9

77.8

76.8

76.5

66.1

71.7

73.6

72.9

75.5

79.1

77.7

61.9

63.5

79.2

77.7

74.3

67.8

64.6

85.9

86.3

66.2

85.5

66.0

84.9

64.7

85.4

85.0

64.6

65.5

83.8

65.3

86.1

85.6

84.6

64.8

83.8

83.6

84.4

84.1

63.2

56.0
71.8
64.7

85.4
87.7
82.2

64.0
89.9
84.3

83.4
89.8
86.0

82.2
9O.9
85.2

63.7
90.1
43.3

83.3
91.9
83.4

82.2
90.2
82.6

82.2
90.4
82.1

81.1
89.1
84.0

60.2
89.5
63.7

77.4
88.6
63.5

62.7

86.2

84.6

85.0

84.2

85.2

84.9

83.9

84.4

83.5

83.3

83.6

1975
IV

CAPACITY
1976
I
11

1975
IV

UTILIZATION
1976
1
11

111

IV

77.1

79.0

80.6

81.3

8O.1

OUTPUT
1976
1
II

111

132.6

120.8

126.1

130.7

98.4

103.7

1.10.8

117.1

NONDURABLE GOODS MATERIALS

141.4

145.0

146.9

146.6

TEX.* P A P E R * & CHEM. MAT.

146.3

150.2

151.6

151.2

118.2
124.0
167.7

116.5
128.9
173.6

115.5
132.5
175.3

114.4
131.9
175.1

118.5

119.7

120.0

119.9

NOTE:

81.6

1 1977
DEC.I JAN.
1
80.0|
79.0
1
1
76.11 74.9
1
72.81
\
\
84.21 83.2
|
63.3|
|
60.1|
67.01
83.11
1
1
64.81 84.0

80.1

115.1

f c N E R G YM A T E R I A L S

NOV.

79.7

130.3

TEXTILE MATERIALS
PAPER M A T E R I A L S
CHEMICAL M A T E R I A L S

OCT.

79.3

126.9

BASIC MfeTAL M A T E R I A L S

SEP.

78.2

69.7

122.8

DURABLE GOODS M A T k R I A L S

AUG.

1
1
IVl
1
131.61
1
t
128.31
1
108.21
1
1
147.31
1
152.01
1
111.41
130.71
178.31
1
1
120.81
»

III

160.6

161.7

163. 1

163.1

164.4

165.5

166.7

141.7

142.4

143.1

143.7

167.8

169.4

171.0

172.5

159.2

174.7

176.5

178.3

180.1

137.2
143.5
203.7

136.2
144.6
206.2

139.0
145.7
206.7

139.8
146.7
211.2

139.1

140.3

141.5

14i.7

1
1
IVl
1
164.31
1
1
167.81
|
144.41
1
1
174.11
1
182.01
1
140.61
147.91
213.71
1
1
143.91
1

70.6

73.5

76.2

78.4

76.4

69.4

72.8

77.4

81.5

74.9

84.3

85.6

85.9

65.0

64.6

83.8

85.1

65.0

84.0

83.5

86.2
86.4
82.3

84.3
89.1
64.2

63.1
90.9
84.0

61.8
89.9
82.9

79.3
88.4
63,5

65.2

85.3

84.6

§4.0

83.9

ESTIMATES OF ACTUAL OUTPUT ANO CAPACITY 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 UTILIZATION IN PER CENT ARE CALCULATED AS RATIOS OF (!) THE INDEXES OF I N D U S T R I A L PRODUCTION TG (2) THE CORRESPONDING INDEXES OF CAPACITY.
INDUSTRIAL M A T E R I A L S ARE THOSE CRUDE ANO SEMIFINISHED PRODUCTS THAT ARE BOTH PRODUCED ANO USED
AS INPUTS BY INDUSTRIAL ESTABLISHMENTS; THE INDUSTRIAL M A T E R I A L S INCLUDE MOST Of THE COMPONENTS OF THt P R I M A R Y PROCESSING
GROUPING OF MANUFACTURING AS W E L L AS THE INPUTS SUPPLIED TO THE INDUSTRIAL SECTOR BY M I N E S ANO UTIl IT1 ES—SUCH AS IRON ORE,
CRUDE OIL* AND INDUSTRIAL ELECTRICITY.
THE 1973 HIGHS (ANO ALSO 1S75 L O W S ) IN C A P A C I T Y U T I L I Z A T I O N , SHOWN IN THE T A B L E S
ABOVE* ARE SPECIFIC TO EACH SERIES AND MAY OCCUR IN DIFFERENT MONTHS.
BUSINESSES USUALLY OPERATE AT CAPACITY UTILIZATION R A T E S THAT ARE W E L L BELOW 100 PER CENT; NONE OF THE BROAD AGGREGATE S E R I E S
HAS EVER INDICATED A 10O PER CENT USE OF CAPACITY. CAPACITY U T I L I Z A T I O N RATES A V E R A G E D ABOUT 83 PER CENT FOR MANUFACTURING
FROM 1955 THROUGH 1975, ANO ABOUT 86 PER CENT FOR INDUSTRIAL M A T E R I A L S FOR 1967 THROUGH 1975. IN MANUFACTURING AS A WHOLE,
UTILIZATION RATES AS HIGH AS 90 PER CENT HAVE B E E N EXCEEDED ONLY IN W A R T I M E . THE PEAK R A T E S OF UTILIZATION IN 1973 WERE
ASSOCIATED WITH SIGNIFICANT U P W A R D PRESSURES ON PRICES.
THfc C A P A C I T Y UTILIZATION ESTIMATES ARE DESCRIBED* ANO HISTORICAL DATA ARE PROVIDED, IN THE N O V E M B E R 1976 ISSUE OF THE FEDERAL
R E S E R V E BULLETIN.* THE PRODUCTION FIGURES ARE DESCRIBED IN THE JUNE 1976 ISSUE OF THE BULLETIN; CURRENT E S T I M A T E S A R E
PUBLISHED IN THE FEDERAL R E S E R V E STATISTICAL R E L E A S E , INDUS.TRIAL PRODUCTION. G.12.3.