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FEDERAL

RESERVE

statistical

release

For immediate release
June 16

G.3

CAPACITY UTILIZATION:

MANUFACTURING AND MATERIALS

May 1978

Capacity utilization in manufacturing increased by an estimated
0.2 percentage point in May to 83.6 per cent. The May increase followed
larger gains in March and April that partly reflected the recovery of
production from the effects of the coal miners' strike and severe winter
weather. The utilization rate in the primary processing sector rose
by 0.7 percentage point in May to 86.0 per cent; sizable increases in
production of metals contributed to this gain. The operating rate in the
advanced processing sector was unchanged at 82.4 per cent, as a decline
in production of motor vehicles and parts held down the utilization rate
for this sector. In the previous 3 months, large gains in output by the
motor vehicle industry had contributed to increases in the advanced
processing utilization rate.
Utilization of capacity for industrial materials production
increased by an estimated 0.6 percentage point in May to 84.2 per cent.
Gains in operating rates in the production of durable goods materials
and of energy materials accounted for the over-all rise. Capacity
utilization in the nondurable goods materials sector was about unchanged.
Operating rates in manufacturing and in the materials sector
in May were the highest since before the 1974-75 recession in industrial
production. Utilization rates in most major industry or materials groupings are near their historical average values and are well below
previous peak figures.

MANUFACTURING

INDUSTRIAL MATERIALS
PER CENT

100
TOTAL

ENERGY

—

80

I

I

I

60
100

NONDURABLE GOODS

PRIMARY PROCESSING

80
ADVANCED PROCESSING
DURABLE GOODS

I

I

I

1966



I

I

I

1069

I

I
1972

II

I

I

1975

1

I
1978

do

I

1969

I

I

I

1972

I

I

I

1975

I

I
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
MANUFACTURING. TOTAL
PRIMARY PROCESSING
ADVANCED PROCESSING

19791 1975

1977

H1C.HI

MAY

LOU

I
68.01 69.6
1
1
93.61 68.1
1
85.4| 70.4

82.8

JfJMfc

JULY

AUG.

83.1

83.0

82.9

SEP.

82.9

OCT.

NOV.

82.9

1976
JAM.

82.9

83.0

Ffcfi.

81.7

DEC.

81.9

85.3

85.1

84.4

84.7

84.7

84.5

63.8

83.6

84.2

85.3

86.0

82.0

81. b

82.0

81.8

81.9

82.2

80.5

80.8

82.0

82.4

82.4

1
19781

1977

UTILIZATION

CAPACITY
1977

1978

1

1978

136.9

138.7

139.91 139.81 164.0

140.1

146.3

147.3

148.21 148.21 170.2

165.6

167.1

171.8

173.5

83.0

«2.9|

82.1

82.3

85.1

84.9

1
84.61

83.9

80.5

175.11 176.8

82.7

81.4

81.9

82.01

81.1

FEB.

MAR. APR.

8 .
1 3

8 .
2 O

1
1

1

1

I

135.61 135.41 160.7

162.2

163.8

I

1

1

IV

81.2

168.71 170.3

1
1

134.2

111

1

133.1

132.0

83.6

85.5

fj

129.3

82.7

81.6

1

ADVANCED PROCESSING

MAY

83.4

85.5

OUTPUT

PRIMARY PROCESSING

APR.

81.4

1977

MANUFACTURING* TOTAL

MAR.

165.31 166.9
1

Industrial Materials
MONTHLY CAPACITY UTILIZATION
SERIES

19731 1975
MlCHl

LOW

1977
MAY

I 1 7
9 8
JUNE

JULY

AUG.

SfcP.

DC 7.

NOV.

1

MATERIALS* TOTAL
DURABLE GOODS MATERIALS
BASIC METAL MATERIALS
NONDURABLE GOODS MATERIALS
TEX., PAPER* & CHEM. MAT.

MOTEi

93.11
1
»
92.51
1
97.71
1
1
9.}
46
1
9.|
45

6.
97

8.
27

8.
30

82.9

82.0

8.
20

8.
24

8 .
2 3

6.
43

7.
94

7.
99

8.
00

78.9

7.
89

7.
95

7.
94

6.
61

81.2

8.
02

7.
76

7.
48

7.
34

7.
56

7.
42

6.
78

8.
77

8.
70

8.
64

8.
67

8.
59

8.
58

8.
61

6.
55

8.
67

86.1

85.1

85.3

8.
47

6.
49

8.
43

DEC.I

JAN.

1
81.91 6 .
19
|
1
80.11 7 .
96
1
75.71 7 .
5 7
1
1
65.61 8 .
5 3
1
8.1 8.
40
45

MAY

6 . '6 .
36
4 2

7.
87

7.
95

6 .
1 2 6 .
1 9

7 .
6 1

7.
57

7.
96

6.
69

6.
77

6.
79

8.
60

6 .
5 3

8.
63

6.
66

8.
66

ESTIMATES OF ACTUAL OUTPUT AND CAPACITY OUTPUT ARE MOTH EXPRESSED AS PERCENTAGES OF 1967 ACTUAL OUTPUT. ESTIMATES OF
CAPACITY UTILIZATION IN PERCENT ARE CALCULATED AS RATIOS OF 111 THE FEDERAL RESERVE** SEASONALLY ADJUSTED INDEXES OF INDUSTRIAL PRODUCTION TO < 2 ) THE CORRESPONDING INDEXES OF CAPACITY.
INDUSTRIAL MATERIALS ARE ITEMS 6OTH PRODUCED AND USED AS INPUTS BY MANUFACTURING PLANTS* MINES AND UTILITIES! INDUSTRIAL MATERIALS COVER MANY OF THE ITEMS REPRESENTED IN THE PRIMARY
PROCESSING GROUPING OF MANUFACTURING AS HELL AS SOME OF THE OUTPUT OF MINES AND UTILITIES — SUCH AS IRON ORE, CRUDE OIL. AND
ELECTRICITY SOLD TO INDUSTRY.
THE 1973 HIGHS AND 1975 LOWS IN CAPACITY UTILIZATION* SHOWN IN THE TA6LES A6OVE, ARE SPECIFIC TO EACH SERIES AND NAY OCCUR IN
DIFFERENT MONTHS. INDUSTRIAL PLANTS USUALLY OPERATE AT CAPACITY UTILIZATION RATES THAT ARE WELL BELOW 100 PERCENT! NONE OF
THE BROAD AGGREGATE SfcRlES HAS EVER INDICATED A 100 PERCENT USE OF CAPACITY. CAPACITY UTILIZATION RATES AVERAGED ABOUT 63
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 KEN EXCEEDED ONLY IN WARTIME. THE PEAR RATES OF UTILIZATION IN 1973 WERE. ASSOCIATED WITH SIGNIFICANT UPWARD PRESSURE ON PRICES.
THE CAPACITY UTILIZATION ESTIMATES ARE DESCRIBED. AND HISTORICAL DATA ARK PROVIDED, IN LtUUAJ. tf&UUi tlfr^fftf* 0£ EA»A£1TV
AttQ LAPALUY UTILUATIOM* THIS PUBLICATION NAY BE OBTAINED FROM PUBLICATION SERVICES. BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM* WASHINGTON* D.C. 20551. THE PRICE IS $1.75 PER COPVj FOR TEN OR MORE* 61.SO EACH.