Full text of G.3 Capacity Utilization, Manufacturing, Mining, Utilities and Industrial Materials : July 20, 1967

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FEDERAL
statistical

RESERVE

release

E.5

For immediate release
July 20, 1967

REVISED INDEXES OF MANUFACTURING
CAPACITY AND CAPACITY UTILIZATION

The Board's indexes of capacity and capacity utilization in U.S.
manufacturing industries have been revised. The effect of the revisions
has been to lower utilization estimates slightly for the recent period and
to raise them moderately for the period 1948-54. The indexes are now reported
in figures to the nearest tenth of a point, rather than rounded to the nearest
point as in earlier releases . The purpose of this change is to make it
possible to observe gradual changes. No increased accuracy is implied.
The indexes have been described in full in the November 1966
issue of the Federal Reserve Bulletin. Their calcuation may be described
briefly. For each of the two subgroups of manufacturing—primary-processing
industries and advanced-processing industries—a first-approximation capacity
series is constructed by dividing seasonally adjusted December values for
the Federal Reserve production index by the corresponding year-end operating
rate taken from the annual McGraw-Hill survey. The first-approximation
capacity series controls the level and trend of the final capacity estimates.
A capital stock series and a McGraw-Hill series on yearly capacity
changes are used to smooth and to extrapolate the capacity estimates. Because
these two series are believed to be subject to long-run bias as indicators
of capacity, they are adjusted in level and trend to conform to the firstapproximation series mentioned above. The two resulting capacity estimates
are then averaged to obtain the final capacity estimates. Quarterly capacity
figures are straight-line interpolations between the end-of-year estimates.
Capacity utilization rates are obtained by dividing quarterly production
indexes by the corresponding capacity figures. For total manufacturing both
the capacity series and the capacity utilization series are weighted averages
of the corresponding series for the two subgroups .
The capacity index is subject to revision when the results of new
McGraw-Hill surveys and more recent investment information provide the basis
for a change in the capacity estimates . An additional factor affecting the revision
this year is the exclusion of that portion of the petroleum industry's capital
used in petroleum extraction from the capital stock figure for primary-processing
industries . Petroleum extraction is not a manufacturing activity, and its
earlier inclusion had not been consistent with the investment and production
series used.




- 2 Adjustment of the initial capital stock to exclude petroleum
extraction raised estimates of the operating rate for the early years.
For example, the operating rate for total manufacturing in the first
quarter of 1948 is now 91.1 whereas before the revision it had been 88.5.
For primary-processing industries the corresponding estimate has been
revised from 88.7 to 93.0. Differences between the revised and unrevised
figures narrow gradually, and after 1954 they are negligible.
TOTAL MANUFACTURING: OUTPUT AND CAPACITY
(1957-59 output » 100)
Capaci tyi/

Output

Year

Annual
Average

Annual
Average

QII

QIII

QIV

79.4
83.6

76.3
80.5
84.0

77.3
81.6
84.5

78.3
82.8
85.0

76.8
81.1
84.3

81.9
85.2
92.7
86.3
97.3

85.8
90.4
96.6
101.5
106.4

86.9
92.0
97.8
102.7
107.7

88.0
93.5
99.1
103.9
109.1

89.1
95.0
100.3
105.1
110.4

87.4
92.7
98.4
103.3
108.4

102.2
96.7
98.7
105.4
105.0

100.2
100.8
93.2
106.0
108.9

111.9
118.3
124.3
128.3
133.1

113.5
119.9
125.3
129.5
134.3

115.1
121.5
126.3
130.7
135.5

116.7
123.0
127.2
131.9
136.8

114.3
120.7
125.8
130.1
134.9

112.3
119.7
126.0
134.7
146.1

115.0
119.9
127.2
135.9
148.9

109.6
118.7
124.9
133.1
145.0

137.9
142.4
147.8
153.3
160.1

139.0
143.7
149.1
154.9
162.7

140.1
145.1
150.5
156.4
165.3

141.2
146.4
151.8
158.0
167.9

139.6
144.4
149.8
155.6

159.8

161.3

158.7

170.6
182.2

173.5
185.1

176.4

179.3
--

175.0

QI

QII

QIII

QIV

1948
1949
1950

68.5
66.5
68.1

69.0
64.2
73.9

69..5
65.1
80.1

68.7
64.6
81.4

68.9
65.1
75.8

1951
1952
1953
1954
1955

83.0
82.9
93.2
85.5
92.7

83.0
82.2
94.5
85.6
96.8

80.7
84.4
94.1
86.0
99.0

81.0
91.1
88.8
88.0
100.7

1956
1957
1958
1959
1960

99.7
102.5
89.7
103.0
111.7

99.9
101.9
89.4
109.4
110.2

98.8
102.0
94.9
105.9
108.7

1961
1962
1963
1964
1965

103.1
116.6
121.3
129.4
141.4

108.4
118.6
124.9
132.5
143.5

1966
1967p

154.5
158.9

157.7
157.3

--

——

——

QI

75.3

——

164.0

--

\J When manufacturing output as shown here is divided by the capacity index shown
here, the result may differ very slightly from the estimated utilization rate for total
manufacturing as shown in the following table. The differences are due in part to
rounding and in part to the fact that the utilization rate for manufacturing has been
calculated as a weighted average of utilization for primary-processing industries and
utilization for advance processing industries, rather than as the ratio of total
manufacturing output of total manufacturing capacity.
Output is seasonally adjusted.
p--Preliminary.
NOTE: Estimates based on data from Federal Reserve Board, Department of Commerce,
and McGraw-Hill Economics Department .




UTILIZATION OF CAPACITY
(in per cent)

Total manufacturing

Advanced products

Year
QI

QII

QIII

QIV

AttnUal

QI

QII

QIII

QIV

Primary products
Annu a 1

QI

QIV

90.2
79.8
88.5

89.8
79.8
95.2

87.7
77.3
96.1

89.7
80.2
90.4

89.6
82.8
79.7

88.4
80.5
85.3

87.6
80.2
91.7

86.1
77.9
92.4

87.9
80.3
87.3

1951
1952
1953
1954
1955

96.8
91.7
96.6
84.2
87.4

95.8
88.4
96.8
83.2
90.2

92.2
89.3
95.1
82.7
91.1

91.1
95.8
88.4
83.9
91.5

94.0
91.3
94.2
83.5
90.0

93.5
90.9
96.4
85.3
85.7

91.8
91.2
96.2
84.0
87.9

89.0
90.3
94.6
83.2
88.6

89.6
95.2
89.2
82.8
88.9

91.0
91.9
94.1
83.8
87.8

1956
1957
1958
1959
I960

89.4
86.7
71.9
80.6
84.1

88.2
85.0
71.2
84.9
82.0

85.6
84.0
75.3
80.7
80.0

87.6
78.6
77.7
79.8
76.5

87.7
83.6
74.0
81.5
80.6

86.7
85.3
72.7
78.7
82.9

85.8
83.7
71.6
82.2
82.1

85.7
82.5
74.0
82.9
81.0

87.7
77.8
76.3
80.3
78.4

86.0
82.3
73.6
81.0
81.1

93.1
88.6
70.8
83.1
85.7

1961
1962
1963
1964 . .
1965

74.5
82.0
82.0
84.5
88.5

78.0
82.4
83.9
85.7
88.4

80.2
82.4
83.7
86.3
88.5

81.5
81.8
83.7
86.2
88.6

78.5
82.1
83.3
85.7
88.5

76.3
81.4
82.2
83.8
87.2

78.2
82.8
82.9
84.7
87.1

79.7
83.3
83.6
84.9
87.4

81.3
82.5
83.7
84.4
88.7

78.9
82.5
83.1
84.4
87.6

1966
1967

90.6
87.0

90.9
84.7

90.6

89.8

90.5

90.3
87.8

90.5
86.2

90.8
--•

90.5
--

90.5
--

p Preliminary.
Note—Seasonally adjusted estimates based on data fromFederal Reserve Board,
McGraw-Hill Economics Department.

Annu a 1
average

. . , .91.1
83.9
81.9




III

average

average

1948 .
1949
1950

QII

93.0
85.4
84.9

92.8
78.8
93.1

92.9 90.0
79.2 76.5
99.9 101.3

92.2
80.0
94.8

96.7
87.9
95.7
81.9
94.6

93.0
96.6
87.4
85.3
95.1

98.1
90.4
94.4
83.0
93.2

91.6
86.8
70.7
88.7
81.8

85.5
86.0
77.0
77.6
78.5

90.4
79.7
79.8
79.2
73.9

90.1
85.3
74.6
82.1
80.0

72.1
82.7
81.7
85.5
90.2

77.7
81.9
85.2
87.1
90.1

80.9
81.1
83.9
88.3
90.1

81.7
80.7
83.8
88.8
88.5

78.1
81.6
83.6
87.4
89.7

91.0
85.9

91 4
82.6

90.4

88.7

90.4

101.4 101.4
92.7 84.4
97.0 97.5
82.5 82.2
89.6 93.4

Department of Commerce, and