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FEDERAL RESERVE statistical release G.3 (402) For Immediate release CAPACITY UTILIZATION Manufacturing, Mining, Utilities, and Industrial Materials June 17, 1987 Capacity utilization in manufacturing, mining, and utilities increased 0.2 percentage point in May to 79.6 percent, and the utilization rates were revised upward for March and April. Overall utilization in industry has not changed significantly since December 1986, as both total industrial production and capacity have increased at an annual rate of just over 2 percent during the first five months of 1987. In May the rate of capacity utilization in manufacturing rose 0.3 percentage point to 80.2 percent, close to the 1967-1986 average. The utilization rate for utilities rose 1.0 percentage point to 80.4 percent, while that for mining remained unchanged at 73.7 percent; for both mining and utilities the May readings were considerably below their longer-term averages. Within manufacturing, moderate increases in utilization were widespread in May f and Increases were similar for both durable and nondurable goods. The largest Increase occurred in the primary metals industry where, despite an increase of 4*4 percentage points since January, the operating rate remains low by historical standards. Utilization in the motor vehicles and parts industry Increased 0.5 percentage point in May as a further decline in auto assemblies was offset by increased production of trucks. Utilization in petroleum products in recent months has stayed near its 1967-86 average of 87.8 percent; based in part on information from the Department of Energy, the capacity estimates for this industry were revised upward and the utilization rates decreased back to October 1986. Producers of industrial materials operated at 79.0 percent of capacity in May up 0.2 percent from April. Gains occurred for materials used to produce durable and nondurable goods and for energy materials. Capacity Utilization: Summary Percent of capacity, seasonally adjusted Series High Lou -80 fligfe Low -86 1987 FEB | BAR J^ APE | HAY 66.6 72.1 86.9 69. 5 81.5 79.7 79.6 79.4 79.6 Manufacturing Durable Nondurable 87.7 87.4 68.8 69.9 67.9 71.8 66.5 86.3 87.0 68.0 63.7 74.4 80.6 78-6 83.5 80.3 77.1 85.0 80.2 77.1 85.0 79.9 76.5 85.1 80.2 76.7 85.3 Mining Utilities 92.8 95.6 87.8 82.9 95.2 86.5 76.9 78.0 87.1 87.5 73.3 79.0 73.5 78.7 73.7 79.4 73.7 80.4 92.0 70.5 89.1 68.4 82.3 78.7 76.6 78.8 79.0 Total Industry Industrial Materials CAPACITY UTILIZATION MAY DATA SEASONALLY ADJUSTED. PERCENT 110 TOTAL INDUSTRY TOTAL MATERIALS 90 70 50 110 MINING UTILITIES 90 l' MANUFACTURING *N 70 50 110 MANUFACTURING ELECTRICAL MACHINERY 90 NONDURABLE 70 MOTOR VEHICLES AND PARTS 30 1972 1975 1978 1981 1984 1987 1972 1975 1978 1981 1984 1987 MANUFACTURING, FINING AND UTILITIES Table 1 Capacity Utilization Monthly, seasonally adjusted, percent of capacity 1973 1 1975 1 1978 1 1982 1 1967 | | -86 1 Low Series High 1 Los 1 - 8 0 1 1 Ava. 1 J 1 liidh 1 i 1 1 1 38.61 72.11 69.5J 81.5J Total Industry 36.91 i 1 1 87.71 69.91 86.51 6 8 . 0J Manufacturing i 1 30.6| 91.91 63.31 39.11 8U8| 65.11 Primary processing 86.0J 71.11 85.11 6 9 . 51 Advanced processing 80.01 I 1 1 1 § 87.41 63.71 78.61 67.91 86.31 Durable manufacturing 36. 6 j Stone, clay and glass products 89.31 67.11 62.91 78.01 Primary metals 101.91 67.01 97.11 45.81 79.61 Iron and steel, subtotal 105.8J 66.61 100.3J 37.61 78. 5 1 Nonferrous metals, subtotal 95.61 62.11 91.11 60.81 81.21 Fabricated metal products 85.01 64.71 87.4| 61,31 78.01 Nonelectrical machinery 89.01 68.21 36.01 62.91 78.11 Electrical machinery 85.71 63.71 ,89.9| 66.91 78.0J Motor vehicles and parts 97.11 52. 7 S 93.31 47.0| 7-8.0.1 3o.6j J Automobiles 1 $3.11 77,0| Aerospace and misc. trans, eqp. 77.01 69.61 87.1l 70.71 83.2J instruments 89,21 74.9J 33.91 77.81 81.31 Other durables 87.71 69.01 31.01 69. 11 Nondurable manufacturing Food and kindred products Textile mill products Paper and products Chemicals and products Petroleum products Rubber and plastics products Other nondurables Mining Utilities Electric utilities 1 38.81 85.81 92.1| 95.61 88,61 99.61 97. 51 86.41 92.81 I 95.6J 98.71 1 83.5| 82.21 84. 9| 38,71 78.71 87-81 84.7| 1986 1 MAY | _ 1986 1 SEP I 1 79. 1J 79.0 79.0 79.3 .1987-. JAM 1 FSB 1 "ill"" iAPR T~ SAY 1 79.4 79.7 79.6 79.6 79.6J 79.4 79.4J 79.6 79. b 79.7 80.01 79.9 80.3 80.2 79,9 30.2 82.91 78.0J 83.7 77.6 83,8 77.8 84.4 77.7 84.9J 77.91 34.8 77-8 84.7 78.3 84.7 78.1 85*0 85.5 77.9 76. 3 J 82.4J 68.1| 58.91 82.51 79.71 71.11 71.51 78.4| 75. 6 j 8 7.3| 80.2| 83.5J 76.4 32.3 67.8 60.4 79.3 30.2 70.2 71.2 80.5 77.0 89.0 80.0 84.0 76.3 80.2 68.0 61.6 77.8 81.0 70.6 71.4 76.8 73.7 89.4 76.9 8<»«9 76.5 81.8 70.5 64.3 80.0 80.1 70.0 71.5 77.2 74.1 89.3 79.1 85.7 7b. 7 | 76.4 82.9 c»7.8 b0.2 79.4 80.7 69.2 71.6 d0« 1 75.8 d9.o 79-4 85.4 77-1 .81.9 70.5 63.4 81-2 80,8 70.1 7U4 34.0 84.6 89.5 79.6 85.5 77.1 82.5 71.9 65.8 81.1 81.1 70*6 70.5 82.2 81.2 89.5 78-8 85.7 76.5 81.6 76.7 8 2 . <4 j b 7. o | 60.2} 73.31 80. 9| 69, 2 S 72.21 79.51 79.9J 38. 4 S 79. b | 87.31 7 1 .r"5:* 72.2 66*1 79. 4 .81.1 70.7 69.7 77.8 73.9 89.1 79.0 85.9 84.1J 78. 9 J 90. 1 | •93.61 79.61 93.91 85.0J 87. 2 S 84.3 78.5 93.6 95.4 80.5 91.7 86.3 86.1 84.7 77. S 93.7 95.8 3G.4 89.1 87.5 38.4 84.7 78.1 95.0 96.8 79.3 89.4 87.9 88.5 85.11 35.2 78. 4 | 78.2 95.41 ^4.9 98. n yb.5 80.51 82.1 8 9 . 4 | 91.0 88.5| 66.7 88.01 87.8 85. a 85.1 78.0 95.8 94.5 82.6 88.5 87,9 87.8 85.3 94.9 96.7 82. 1 38.1 86.9 87-6 85.0 78.3 94.8 95.4 32.2 87.5 87.1 87.7 73.51 73.9 1 30.0§ 79.1 3 2 . 2 1 80.7 1 73.3 73.5 73,7 73.7 79.0 81.0 78.7 81.4 79.4 81.5 80.4 82.4 SOY « 7-1.81 77.6J 58.9J 67.7J 69.2J 83.7J 59.5J 72.31 87.0J 85.11 88. 3\ 32.9J 91.7| 89.4J 92.41 74.4| 76.51 70.61 80.81 67. 6j 69. 7J 71.21 78.91 87.81 95. 2 J 76.91 87. 11 • 75.51 72.9 72.5 73.9 82.91 83.02 I 33.51 87.61 78.0J 78.21 87-51 88.4J I 79.31 82.21 1 78.7 82.2 79.3 82.7 80.5 33.4 9*«» 7 1 1 1 I •8.6. J 1 DEC J 78.3 nil *"** 81.4 71» 1 69.6 78.3 73.2 89.3 78.? 86.1 88.0 88.4 Table 2 Output, Capacity, and Capacity Utilization Quarterly, seasonally adjusted | 1987 1 Q1 I 8 1 125.0 124.4 125.0 126.0J127.0J 1 1 128.4 128.4 129.4 1.30. «1 131.81 OUTPUT Series Total Industry Manufacturing 1986 yi Q2 23 Q4 a Durable manufacturing Stone, clay and glass products Primary met&§& 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 Nondurable manufacturing Food and kindred products Textile mill products P&D&r and orodiicts Chemicals and products Petroleum products Rubber and plastics products Other nondurables 123.6 130.2 132.3 133.8 108. b 111.8 132.8 134.8 131.3 132.8 91. 1 93.0 149.7 149.7 129.9 131.8 r 0^91 s*i CM piuuuvio Mining 105.4 Utilities Electric utilities 110.5 119.6 99.9 Q3 131.8 132.91134.41 134.5|135.7| 117.4S 118.4| 139.b|139.8| 133.6J 137.81 9 1 . 9J 92-7J 159.1|159,2! 135.4|135. 71 I 1 91». 6 96.61 96.61 134.6 114.7 137.9 134.1 92-6 155.3 132.5 108.9 108.8 110.4l109.5j 122.2 123.5 124.11122.41 I 3987 | Q1 | I I 158.8| 159.6J 1 | 163.41164-4J 1 1 135.2J135.91 130.41 131.71 1 1 168.2J 169. 1j 147.51148.3| 108.91108.2J 100.71 99. 5j 124.41 124.61 133.8} 133.8| 201.7j203. 1| 235.2I237. 1j 139.7J 140.21 142.2J141.9) 167.61 163,51 178e3f180.0| Q4 UTILIZATION 1980 Q1 Q2 Q3 1987 Q1 Q4 80.0 79.2 79.1 80.0 79.5 79.7 83.5 82.9 78.0 83.3 78.0 155.01 156.21 81.1 81.2 72.8 71.7 62.3 81.2 86.5 81.9 83.1 7&.4 32.9 68. 1 60.0 30.6 80.1 70.9 71.2 79.8 78.4 87.2 80.5 83.2 76.3 82. 1 67.4 60.3 78.3 79.5 70.9 71.4 79.4 74.5 88.3 80.3 83.4 t 79.31 j 79.81 1 84,31 77.81 1 76.51 81.41 68. 7 § 6 2 . 1J 78.91 80.71 69.91 71.7J 77.8J 75.9} 89.01 79. 2| 36.01 i i 154.5 155.6 156.71158.01 169.4 170.7 172.0J 173.41 123,6 123.8 124.04124. 6J 142.3 143.2 144-11145.31 165.2 166.0 166.9§167.81 101.9 101.8 102.91104.31 176.5 178.7 180.9J 1 8 3 . 1 | 150.9 152.1 153.41154.71 83.8 78.7 88.0 9J.9 79-9 89.3 85.9 86.8 84.3 79.0 90-4 94.7 30.4 91.2 34.8 87.3 84.7 78.8 92.6 96.3 30.8 91,0 86.9 87.1 84.31 78-21 94.7J 96.9J 30.1) 89. 3! 87,91 88.3J 131.7J 131.3J 79.6 75.b 73.2 73.31 7 3 . 6 1 136.3 136.9 137.5 138.11138.71 147.1 148. 1 149.0 15O.O|151.O1 81.1 81.3 79.5 82-5 79.1 82.9 79.91 7 8 . 9 82.71 8 1 . 1 156.3 157. 1 157.9 160.5 161.4 16 2.4 133.6 176.7 134.0 177.9 134.6 179.1 165.5 144.9 110.2 103.0 123.9 133.5 19 7.2 230.7 138.1 143.6 165.4 17 3.2 151.7 166.4 167.3 145.8 146.6 109.8 109.4 102.2 101.5 124.1 124.2 133.6 133.7 198.7 200.2 232.2 233.7 138.6 139-2 143.1 142.7 166. 1 166.9 174.9 176.6 i52»a 153.9 153.5 168.1 123.4 141.4 164.3 102.0 174.3 149.6 i 132.4 132. 1 Not®. Data for output are percentages of 1977 output as shown in the Federal Reserve's seasonally adjusted indexes of industrial production. Capacity is also expressed as a percentage of The capacity indexes and utilization rates for petroleum products have been revised for the period since October 1986; this has affected the estimates for total industry, manufacturing, nondurable manufacturing, and primary processing. Q2 | 111.5 111.1 112.1 114.01115.11 138.5 138.9 139.7 140.41 141.81 1 1 128.3 127.1 127.7 128.61130.01 119.8 120.8 120.3 120.11122.31 79.7 74.8 73.7 74.81 75.81 68.7 61.2 61.4 62.51 62.81 100.5 100.0 97.2 98.11100.31 108.4 107.1 106.3 107.91108.31 14.3.5 140.9 142.0 1 4 1 . 11.142. 11 165.4 165.3 166.9 168.71 168»7| 113.7 1 T O . & 110.5 108.31115,21 116.6 112.2 106.2 107.9J114.3i 143-0 144.8 147.3 149.21 150.51 141.8 140.9 141.3 141.3|142.71 126.0 127.2 128.4 133.21133.61 Primary processing Advanced processing CAPACITY 1986 Q1 131.9 78.4 77.6 82* to 72.3 66.7 a 1 79.6 80.2 84.7 78,1 76.9 82.5 70.1 63.1 80.5 80.9 70.0 71.2 82.1 80.5 89.3 7S.3 85»5 85.1 78.3 94.8 96.2 82.1 88.9 36.9 87.7 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 capacity Series 1 HAB | APH | HAT Industrial Materials 78.7 78.6 78.8 79.0 Durable goods materials 74.6 74.5 74.4 74.5 Meta! materials 67.3 68.0 68.3 68,7 Raw steel Aluminum 61.3 70.5 65.2 72.5 68.6 74.2 Nondurable goods materials Textile, paper, and chemical materials Pulp and paper materials Chemical materials 94, Energy materials 81.2 I 81.3j 81.3 I 86.3 86.8 87.6 87.8 88.1 88.1 88.9 97.1 83.7 95.4 95.1 84.0 85.0 80.3 79.7 89.1 80.5 Table 4 Output, Capacity, and Capacity Utilization Quarterly, seasonally adjusted OUTPUT Series Industrial Materials Durable goods materials Metal materials Raw steel Aluminum Nondurable goods materials Textile, paper and chemical materials Pulp and paper materials Chemical materials Energy materials 1986 01 1987 4 02 4 4 114. 5 113.3 113-4 114.34115.11 4 1 1 4 120. 9 118.8 118.8 120. 11121.21 4 4 7 9 . 0 75.1 73.1 75.71 75.51 1 71. 4 79. 1 i 60.0 68.1 58.61 61.11 70.31 75.11 4 4 4 4 115. 7 116.9 119.7 121.21122.81 4 4 116. 2 117.0 120.4 122.41 124.21 66.2 77.7 CAPACITY 1986 1987 I 01 i 4 4 144.2 144.7 145.3 145.84146.34 « I I 4 159.9 160.7 161.5 162.2J163.0l 1 | 115.0 114.5 114.0 113.41 112.7| 02 Q3 1 04 j 1 UTTLIZkTIOH 1986 Q1 02 03 79.4 78.3 78.1 75.6 73.9 73.6 68.7 65.6 64.2 70.1 69.9 65.6 69.7 60.0 62. 1 83. 2 83.8 85.6 i 101.8 100.9 99.9 98.9| 97.61 113.2 111.4 109.7 107.94 105.71 4 4 4 1 139.0 139.5 139.9 140.4) 141.0| 1 1 138.4 138.8 139.2 139.64140.41 I 128.8 130.1 135.1 136.01 136.41 115.3 115.4 117.7 120.11122.54 I 4 1 4 102. 2 100.6 98.6 98.24 97.81 03 83.9 84.3 86.5 93.8 80.1 94.2 80.0 97.3 81.4 84.4 82.9 81.2 i 137.3 138.1 138.9 139.7)140.84 144.0 144.3 144.7 145.0] 145.64 4 4 1 I 121.1 121.3 121.4 121.61121.6) J 1 1987 01 Q<J 1 78.4J S 4 74.04 1 66.71 I 59*24 65.24 1 1 86.44 • 87.6J j 97.3| 82.8| 78.7 7^4 67.0 62.6 71.1 87.1 88.5 96.9 84.2 1 4 8 0 . 7 | 80.5 J Expianatoey 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 possibie 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 metals, 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 iotai 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 Federai 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. Release schedule for 1987. Approximately 11 a.m. on January 20, February 17, March 16, April 16, May 18, June 17, July 16, August 17, September 16, October 19, November 16, and December 16.
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