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FEDERAL RESERVE statistical release G 3 (402) For Immediate release CAPACITY UTILIZATION Manufacturing, Mining, Utilities, and Industrial Materials June 16, 1988 Capacity utilization in manufacturing, mining, and utilities rose 0.2 percentage point in May to 82.9 percent, three percentage points above its level a year earlier. The increase in May reflected a broadly-based rise in operating rates at manufacturers of durable goods as well as an increase at utilities. Average utilization in both advanced and primary processing industries showed small increases in May. The operating rate for durable manufacturing rose 0.6 percentage point in May, with the largest gains coming in motor vehicles and parts and primary metals. Utilization also continued to rise in the fabricated metal products industry where the 6 percentage point increase during the past year has lifted utilization to the highest rate since 1979. The operating rate for nonelectrical machinery also moved up again last month, but despite steady gains during the past year is still substantially below its levels during 1979. Utilization at nondurable goods manufacturers slackened further in May; it has fallen more than a percentage point since December 1987, but is still 2 percentage points above its 1967-87 average. In general, the increases in utilization since the end of 1987 have occurred in advanced processing industries that produce durable goods. Operating rates in primary processing industries, which ran up strongly last year, fell back in January and February and have edged up slowly since then. Capacity utilization at producers of industrial materials rose 0.3 percentage point in May to 83.4 percent, but has yet to return to its level of last December. The increase in May reflected gains at producers of durable goods materials, while operating rates for energy and nondurable goods materials producers were little changed. Capacity Utilization: Summary Percent of capacity, seasonally adjusted Series 1973 : High 1975 Lou 1978 -80 High 1982 Low 1967 -87 A?q. 1988 1 BAR I APfi I flAY 88.6 72,1 86.9 69.5 81.5 82.4 82.4 82.7 82.9 Manufacturing Durable Nondurable 87.7 87.4 88.8 69.9 67.9 71.8 86.5 86.3 87.0 68.0 63.7 74.2 80.6 78.7 83.5 82.6 80.5 85.7 82.7 80.5 85.8 82.9 81.0 85.7 8J. 1 81.6 85.3 Mining Utilities 92.8 95.6 87.8 82.9 95.2 88.5 76.9 78.0 86.7 86.9 79.5 82.6 80.1 81.1 81.8 80.4 81.3 80.9 92.0 70.5 89.1 68.5 62.2 82.3 82.3 83.1 83.4 Total Industry Industrial Materials CAPACITY UTILIZATION MAY DATA SEASONALLY ADJUSTED. PERCENT 110 TOTAL INDUSTRY TOTAL MATERIALS 90 70 ! 1 ! I I I I 1 i 50 110 I I MINING UTILITIES 90 70 MANUFACTURING 50 110 MANUFACTURING ELECTRICAL MACHINERY 90 NONDURABLE 70 I I 50 110 RAW STEEL TEXTILE, PAPER AND CHEMICAL MATERIALS 90 70 50 I 1973 i i 1976 30 1979 1982 1985 1988 J I 1973 1976 1979 1982 1985 1988 MANUFACTURING, MINING AND UTILITIES Table 1 Capacity Utilization Monthly, seasonally d j d percent Mhl ll adjusted, Series Total Industry Manufacturing Primary processing Advanced processing Durable manufacturing Stone, clay and glass products Primary metals Iron and steel, subtotal Nonferrous metals, subtotal Fabricated metal products Nonelectrical machinery Electrical machinery Motor vehicles and parts Automobiles Aerospace and misc. trans, eqp. Instruments Other durables of capacity 1973 1 1975 ] 1978 | 1982 | 1967 4 1987 1 High 1 Lou 1 -80 ] Low ] -87 | HAT ] j Hiqh 1 1 Avq. i 1 4 4 4 ) 88.61 72.11 86.9] 69.5] 81.5] 79.94 i I 1 1 1 1 87.7] 69.9] 86.5] 68.01 80.61 80.44 4 91.94 86.04 87.41 89.3] 101.94 105.81 95.6] 85.04 89.04 85.7] 97.11 4 68.3] 71.14 77.04 89.21 87.71 88.51 87.64 92.8| Utilities Electric utilities 95.6] 98.7] 82.91 83.01 a Mining 88.81 85.81 92.14 95.61 88.61 99.64 97.51 • 78.0] 78.2] l - 69.61 74.91 69.01 4 71.81 77.64 58.91 67.7] 69.2] 83.7| 59.51 72.34 1 87.8| Nondurable manufacturing Food and Kindred products Textile mill products Paper end products Chemicals and products Petroleum products Rubber and plastics products Other nondurables 87.04 85.14 88.34 92.74 82.91 91.7] 89.4) 92.44 4 95.2] 1 67.9| 86.31 67.1] 86.61 67.0] 97.1] 66.6) 100.3) 62.14 91.1] 64.7] 87.44 68.21 86.0] 63.7| 89.9] 52.74 93.31 i I 1 81.1 81.9 82.1 81.3 82.0 82.2 83.2) 8 5 . 1 79.2] 79.5 1 77.6] 78.4 80.8] 81.0 74.5] 82.6 71.01 82.3 79.5J 8 3 . 1 76.7] 78.0 73.31 7 6 . 1 75.0] 7 5 . 7 79.61 74.7 71.6| 6 0 . 7 89.5] 88.4 78.21 79.2 81.7] 40.3 86.2 80.1 87.0 80.0 80.1 81.0 88.8 90.9 85.9 79.5 76.6 76.5 82.0 72.5 88.9 79.6 81-2 79.9 81.9 88.6 88.8 88.3 79.4 76.1 76.5 80.4 70.2 88.2 79.9 82.0 87.04 86.91 85.5 80.5 93.6 95.7 83.8 84.5 87.1 86.3 84.9 79.5 92.4 94.5 83.1 85.5 87.5 86.2 85.6 79.8 92.7 95.8 84.7 84.2 88.8 86.4 • 65.0] 69.54 • 63.71 62.9] 45.84 37.64 60.81 61.3] 62.91 66.91 47.0] 36.64 70.74 77.84 69.11 1 74.21 76.51 70.61 80.21 67.6| 68.8] 71.2] 78.94 4 76.9| 89.1] 85.1] • 1 1968 1987 SEP 1 OCX 1 MO? ] DEC 1 JAM 1 93.31 87.1] 88.94 81.0] 81.7] 80.1| 78.7] 78.31 79.6] 78.6» 81.24 77.84 78.1| 78.11 78.11 1 77.7] 83.0| 81.6] 84.6] 80. 1] 92. 11 92.7) 81.94 83.51 82.24 85.0] 88.54 78.94 86.9| 84.84 86.0] • 86.71 84.1] 76.5) 79.1 80.6 86.94 88.01 79.2) 84.8] 80.0 83.2 80.5 82.5 1 1 82.4) 1 82.64 • 87.61 80.31 82.5 82.4 82.4 82.7 82.9 82.7 82.6 82.7 82.9 83.1 87.1 80.7 86.6 80.7 86.8 80.8 S7.0 81.1 87.1 81.3 80.11 80.3 81.4] 81.5 89.14 85.2 91.61 87.3 85.8| 82.4 80.8] 8 1 . o 77.8] 78.5 76.5] 77.1 77.71 77.2 80.5 82.2 85.1 86.8 82.7 81.8 81.0 82.1 83.8 84.1 83.3 82.8 79.8 77.7 81.6 59.0 88.7 79.7 82.0 78.7 77.1 76.8 60.6 88.7 80.0 82.5 80.5 82.5 83.6 83.2 84.2 82.4 79.1 76.5 79.3 65.8 87.6 80.0 82.3 63.9] 87.94 78.S4 81.81 86.2 80.6 69.3 86.5 80.4 82.5 83.3 80.3 77.6 83.9 75.3 86.3 80.3 82.3 66.2 80.7 91.5 96.3 86.3 86.7 88.3 86.0 85.7 80.9 90.4 94.7 84.7 86.3 88.8 86.0 85.8 80.4 91.8 95.4 85.0 88.3 88.4 86.1 85.7 79.4 91.6 95.0 85.2 89.5 88.6 86.2 81.5 86.44 80.31 93.34 97.0J 86.54 86.6| 68.8] 86.21 • 1 81. #| 80.7 79.5 80.1 81.8 81.3 81.2 82.8 80.0] 81.4| 82.4 84.3 82.6 84.4 81.1 83.2 80.4 82.6 80.9 83.2 85.3 86.3 85.5 1 1 Table 2 Output, Capacity, and Capacity Utilization Quarterly, seasonally adjusted ] 1988 1 IJOTPUT UTILi*AXIOM 133.21134.51 138. 1) 139.6) 159.5 ] 198b j tf_l 4 1 4 160.4 161.3 162.24 163.1] 1*4.5 165.6 166.7 167.7] 168.94 138.2 180.3 139.0 139.8 181.6 182.9 140. b] 141.6] 184.11185.41 82.7 78.7 83.5 79.0 85.3 79.7 86.9] 86 . 9 80.11 80.7 Durable manufacturing Stone, clay and glass products Primary metals Iron and steel, subtotal Nonferrous metals, subtotal Fabricated metal products Nonelectrical machinery Electrical machinefy Motor vehicles and parts Automobiles Aerospace and misc. trans, eqp. Instruments Other durables 114.3 116.1 119.2 122.2*123.0) 142.0 143.5 145.8 147.61149.71 1 4 130.5 131.4 133.7 136.94 138.4] 120.2 118.6 118.0 119.8)121.4] 75.6 77.3 83.7 90.54 86.01 62.4 66.3 73.8 81.24 76.5] 98.7 98.0 102.2 108.01104.04 109.1 109.9 110.8 114.34117.81 145.8 150.6 155.4 158.74163.84 169.9 170.0 173.4 175.74 177.2] 115.4 109.7 108.0 113.41110.7] 113.7 103.1 92.2 102.84 92.6] 152-8 152.6 152.9 152.91153.9] 140-6 143.1 145.2 146.7)149.01 130.7 132.2 133.1 135.4)137.7] 168.4 144.0 104.0 93.8 123.2 140.8 202.8 227.4 140.2 147.1 170.0 180.0 160.3 169.3 145.1 103.3 92-5 123.7 141.5 204. 1 228. 1 140.7 14 7.8 171.1 161.6 162.2 170.2 146.1 102.6 91.1 124.1 142.3 205.4 228.9 141.2 148.6 172.1 183.3 16-*. 0 171.1)172.0] 147.21147.94 101.8|101.64 89.84 89.2] 124.6] 125.1] 143.0]143.8| 206.71208.01 229.64 230.51 141.7)142.3) 149.3] 149.81 173.2]174.2] 184.9] 186.6] 165.8] 167.3] 77.5 83.4 72.1 66.5 80. 1 77.5 77.6 81.7 74.8 71.7 79.2 77. b 73.8 74.5 78.0 69.7 89.2 78.8 81.5 78.5 80.7 81.6 81.0 82.4 77.8 75.7 75.7 76.5 62.0 88.8 79.2 81.2 80. 0J 80.4 81.44 82 . 1 88.8) 84 . 6 90.41 8 5 . 8 86.7| 8 3 . 1 79.91 8 1 . 9 Nondurable manufacturing Food and kindred products Textile mill products Paper and products Chemicals and products Petroleum products Rubber and plastics products Other nondurables 133.1 136. 1 110.9 139-9 135.8 93.1 156.7 134.6 161.7 172.8 126.1 153.6 169.6 110.5 168.8 161.8 163. 1] 164.61 174.1) 175.4] 126.6]127.54 154.94 156.2] 170.5]171.7] 110.8] 111.14 191.3] 193.9] 163.91166.2] 83.7 79.9 88.5 92.5 80.9 84.8 85.2 85.5 84.7 79.9 92.7 92.8 81.9 84-4 87.3 86.7 85.7 80.4 94.2 96.6 83.6 84.6 87.8 87.0 130.4 129.7 129.0 128.41127.7] 75.8 76.3 78.0 137.7 138.3 138.8 139.44 139.81 150.8 151.9 152.9 154.01154.8] 78.5 81.2 78.3 83.4 80.5 85.1 Series 1987 Q1 Q2 Q3 126.9 128.2 131.0 Manufacturing 131.6 133.2 135-7 Mining Utilities Electric utilities Q1 i Total Industry Primary processing Advanced processing Q4 | 4 CAPACITY 1987 Ql Q3 Q4 i 98.8 135.7 137.0 116.5 141.5 138.2 93.0 162.7 138.4 138.6 138.9 118.8 148.4 141.8 93.5 165.7 140.7 139.71141.4] 139.0] 141.5] 117.4] 116.3] 148.3(149.1] 144.6(146.54 94.74 96.81 169.11171.7] 141.41 143.0.4 99.0 100.7 104.3]102.34 108.1 108.3 111.8 112.3] 114.7] 122.5 126.6 130.2 126.6] 130.01 160.3 171.6 125.7 152.4 166.7 110.1 186.3 157.5 159.6 158.9 170.3 125.2 151.1 167.8 109.8 183.8 Note. Data for output are percentages of 1977 output as shown in the Federal Reserve's season ally adjusted indexes of Industrial production. Capacity is also expressed as a percentage of (22 1987 Ql 79.5 79.9 81.2 82.1] 82 . 4 80.0 80.5 81.4 82.3] 82 . 7 U2 Q3 1988 Ql U4 4 j 71.9 74.7 82.3 77.3 89.9 78.1 81.5 76.8] 7 8 r 7 76.51 7 6 80.0] 7 7 , 8 68.9] 61.8 88 .3 88.3| 79.3] 7 9 . 9 81.7| 02 . 3 B5.6| 79.8] 92.8) 95.7] 84.8] 85.4] 88.4] 86.34 85.9 80. . 7 91.2 95.4 85..3 8 7 . .1 8 8 . .5 86. 0 81.ij 80.1 1 80.6) 82. 1 82.2] 84. 0 1977 actual output. Capacity utilization percentages are calculated as ratios of production to capacity. INDUSTRIAL MATERIALS Table 3 Capacity Utilization Monthly, seasonally adjusted, percent of < 1975 | 1978 j 1982 low 1 - 8 0 I Low I High 1 Series Industrial Materials 1 92.01 Durable goods materials J I 91.81 4 99.2| I 1967 J -87 kwq, H 1 SEP 1 OCT 1 MO1 1 DEC 1 JAJI 1 tEh \ BAB | A H | M I 70.51 1 89.i| 68.51 1 82-21 I 79.31 I **-2 82.1 82.9 83.61 83.0 82.3 82.3 83.1 83.4 1 64.41 89.81 60.91 79.01 75.1J 77.0 78.3 79.0 80.0J 79.7 79.3 79.1 79.9 80.6 82.4 83.3 86.31 80.1 79.3 78.2 79.2 81.1 87.8 91.8 89.7 89.21 90.3 85.7 86.5 95.8| 97.1 97.9 99.2 67.1| 93.6| 45.71 77.7| 69.7| 78.3 106.01 95.71 I I 91.11 Nondurable goods materials I Textile, paper, and chemical materials 92.81 66.41 73.01 1 98.91 3 6 . 1 | 97.41 58.8| 1 I 80.2J 87.31 I 73.41 80.3J I 88.5 90.3 66.71 1 64.81 88.11 70.7! 1 68.81 83-41 86.21 1 87.11 88.7 88.2 89.0 83.8| 98.41 92.51 70.61 98.5 87.4 97.4 88.0 I 1 86.91 i 91.7| 81.0| I I 95.71 1 I 94.6J 97.31 79.91 87.91 63.51 I I 1 1 83.5 84.9 85.784.8| Metal materials Raw steel Aluminum Pulp and paper materials Chemical materials Energy materials 89.4| 64.41 94.01 82.3| I 83.91 I I 82.11 89.0| 94.8 90.7 90.4 91.0 90.8188.8 87.3 83.4 99.5 SQ.3 88.6 88.7 I 93.11 90.8 88.5 89.9 90.0 98.7 101.6|100.6 97.8 98.0 88.6 90.91 87.8 65.7 87.4 84.7 84.1 83.8 90.0 98.1 87.4 84.8 84.6 I Output, Capacity, andCapacity Utilization Quarterly, seasonally adjusted 1 OUTPUT Series Industrial Materials Durable goods materials 1987 Q1 02 Q3 1988 ( Q1 1 Q4 1 1 115.0 116.5 119.2 122.51122.51 1 1 1 1 121.4 122.9 125.7 130.31131.51 1 | Metal materials 741.7 77-0 83.8 91.41 86.11 Raw steel Aluminum 60.9 74.9 67.8 77.8 77.0 83.6 79.51 77.71 88.4) 92.51 1 1 • Nondurable goods materials Textile, paper and chemical materials Pulp and paper materials Chemical materials Energy materials CAPACITT 1987 Q1 02 Q3 146.1 146.7 147.2 162.3 163.1 163.9 110.6 110.0 109.4 93.6 95.4 92-2 94.9 90.8 94.4 • 1 1988 1 Q4 01 1 1 1 147.81148.51 J 1 1 J 164.71165.71 1 * 108.91 108.81 1 • 89.41 88.71 93.91 94.31 1 1 • * 145.61146.81 121.2 124.0 128.2 130.11129.41 142.9 143.9 144.7 122.3 125.1 130.5 133.01131.71 1 | 136.4 137.7 144.6 145.11145.91 125.3 130.2 135.51133.51 122.9 1 1 1 1 98.3 98.7 100.0 102.11100.8! 1 1 142.4 143.4 144.4 145.41146.71 | | 142.8 143.9 145.1 146.21147.61 148.8 149.8 150.9 152.01153.51 1 1 1 1 120.3 120.2 120.1 119.91119.71 1 I • i UTILIZATION 1988 01 1987 01 Q2 Q3 04 78.? 79.4 61.0 82.91 82.5 1 74.8 75.4 76. 7 79. 67.5 70,. 0 76. 5 84. 0 | 65.1 78.5 73.6 81.9 84. 8 88. .6 84.8 86.2 88. 6 88. 9 | 6 7 . 5 94 • U 9 8 . 1 1 i I 8 9 . • 3J 8 8 . 1 85.9 87.2 90.4 91.51 89.7 95.5 82.6 95.7 83.6 99.6 86.3 99. 2 | 98-8 89 .11 87.Q 1 81.7 82.1 83. 3 85.2| I 11 79.4 79.2 i i 84.2 Explanatory Notes Definition. This release contains estimates of output, capacity, and capacity utilization for the nation's factories, mines, and electric and gas utilities. Output data are the Federal Reserve's seasonally adjusted indexes of industrial production, which express output as percentages of 1977 output. The capacity estimates are expressed as percentages of 1977 output as well. Capacity utilization percentages are calculated as ratios of production to capacity. The capacity indexes are based on a variety of data, including capacity data in physical units compiled by trade associations, private and government surveys of capacity growth and utilization rates, and estimates of capital stock growth. The concept of practical capacity is applied, which is defined as the greatest level of output that a plant can maintain within the framework of a realistic work pattern, taking account of normal downtime, and assuming sufficient availability of inputs to operate machinery and equipment in place. When the capacity indexes for individual industries are aggregated—for example to total manufacturing—no explicit account is taken of possible general equilibrium constraints such as emerging industry bottlenecks. Because of the large and heterogeneous database, changes in utilization rates may be more meaningful in the analysis of business conditions than any particular level of these rates. Groupings. Estimates of capacity and industrial production for manufacturing industries are aggregated to primary processing and advanced processing industries, to durable and nondurable manufacturing industries, and to total manufacturing. The mining, manufacturing, and utilities estimates aggregate to the total index. Primary processing includes textile mill products, paper and products, industrial chemicals, petroleum products, rubber and plastics products, lumber and products, primary metais, fabricated metal products, and stone, clay, and glass products. Advanced processing includes foods, tobacco products, apparel products, printing and publishing, chemical products such as drugs and toiletries, leather and products, furniture and fixtures, machinery, transportation equipment, instruments, miscellaneous manufactures, and government-owned-and-operated ordnance facilities. Industrial materials are items produced and used as inputs by manufacturing plants, mines, and utilities. Industrial materials include many of the items included in the primary processing grouping of manufacturing, as well as some of the output of the advanced processing industries, mines, and utilities—such as iron ore, crude oil, semiconductors, and electricity sold to industry. Perspective. The historical highs and lows in capacity utilization shown in the tables above are specific to each series and did not all occur in the same month. Industrial plants usually operate at capacity utilization rates that are well below 100 percent: none of the broad aggregates has ever reached 100 percent. For mining, manufacturing, and utilities as a whole, and for total manufacturing, utilization rates as high as 90 percent have been exceeded only in wartime. Revisions. The first estimates for a month are published about the 17th of the following month. These estimates may revise in each of the next three months as new data become available. After the fourth month no further revisions are undertaken until an annual or benchmark revision. The median of the revisions In the total manufacturing utilization rate between the first and fourth estimate is 0.3 of a percentage point; that is, in about half of the cases, the absolute value of the revision from the first to the fourth estimate is less than 0.3 of a percentage point. Sources. The basic methodology used to estimate the series is discussed in Richard D. Raddock, "Revised Federal Reserve Rates of Capacity Utilization," Federal Reserve Bulletin, Vol. 71 (October 1985), pp. 754-66. Revised data for 1984-85 as well as historical utilization rates since 1967 (1948 in the case of manufacturing) are included in the statistical supplement to the September 1986 capacity utilization release. Copies may be obtained from Publications Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551 Rounding. Utilization rates are calculated from unrounded capacity and production indexes. Aggregates are derived from unrounded detailed components. i schedule for 1988. Approximately 11 a.m. on January 19, February 18, March 17, April 17, May 18, June 16, July 18, August 16, September 16, October 17, November 16, and December 16.
