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FEDERAL RESERVE statistical release For immediate release October 16, 1980 G.3 (402) CAPACITY UTILIZATION: MANUFACTURING AND MATERIALS September 1980 Capacity utilization in manufacturing increased 0.6 of a percentage point in September to 75.6 percent. The utilization rate for producers of industrial materials was 74.9 percent in September, up 0.7 of a percentage point from August. Both rates have risen in the last two months from their recent lows in July 1980. The September rate for manufacturing was almost 12 percentage points below its last high in March 1979, and the materials rate was almost 13 percentage points below its July 1979 high. The operating rate of the primary processing industries rose 1.2 percentage points in September to 72.8 percent. The rate for the advanced processing industries edged up 0.1 of a percentage point to 77.0 percent. Among primary processing industries, a large increase occurred in September in the utilization rate for the iron and steel industry, which had been operating only slightly above fifty percent of capacity in July. There also were increases in the operating rates of producers of textiles, paper, petroleum, rubber, nonferrous metals, fabricated metals, and clay, glass and stone. Among the advanced processing industries, capacity utilization increased sharply in September for motor vehicles and parts, which had been operating since April at very low rates of utilization. Operating rates declined for four advanced processing industries: food, nonelectrical machinery, electrical machinery, and aerospace and miscellaneous transportation equipment. Producers of durable goods materials utilized 69.9 percent of their capacity in September, 0.9 of a percentage point above the August rate, and the operating rate for nondurable goods materials rose 0.8 of a percentage point to 77.9 percent. The utilization rate for energy materials producers declined 0.4 of a percentage point to 84.8 percent. MANUFACTURING PERCENT INDUSTRIAL MATERIALS 100 TOTAL 80 I 60 100 I NONDURABLE GOODS PRIMARY PROCESSING 80 ADVANCED PROCESSING I I 1968 I I I 1971 I I I I I 1974 1977 I I 1980 60 1971 1974 1977 1980 OUTPUT, CAPACITY AND CAPACITY UTILIZATION Output and Capacity are Percentages of 1967 Output; Capacity Utilization is a Per Cent of Capacity. Seasonally Adjusted Manufacturing SERIES MANUFACTURING, TOTAL PRIMARY PROCESSING ADVANCED PROCESSING 19731 PRIMARY PROCESSING ADVANCED PROCESSING 153.7 163.9 148.3 1979 69.0 85.2 84.8 84.4 69.2 87.7 87.5 86.9 60.4 1 83.01 1 1 93.81 1 85.5| 83.7 83.4 82.9 OUTPUT 1980 1979 II I MANUFACTURING, TOTAL MONTHLY C A P A C I T Y UTILIZATION I 1930 1975 1 84.11 1 1 36.31 1 82.81 1 83.9 83. 5 82.8 80.3 77.6 75.7 74.7 75.0 75.6 86.4 85. 2 83.8 80.5 75.8 72.7 70.7 71.6 72.8 82.7 82. 6 82.2 80.1 78.6 77.4 76.9 76.9 77.0 1979 UTILIZATION 1980 85.3 84.4| 38.3 1 1 86.91 1979 CAPAC ITY 1980 1 139.9| 180.1 1 1 137.31 185.6 *l 141.21 177.3 1 181.7| 183. 3 1 1 187.11 188. 5 » 178.91 180. 5 1 1 1 | | 11 1 153.41 152.8 1 1 162.51 160.5 1 148.51 148.8 143.9 145.0 143.3 184.8 190.0 182.0 1 186.31 1 1 191.51 1 183.51 ^11 1 83.4 77.9 75.1 85.1 76.3 71.7 83.7 83.01 1 82.5 78.7 76.9 Industrial Materials SERIES MATERIALS, TOTAL DURABLE GOODS MATERIALS METAL MATERIALS NONDURABLE GOODS MATERIALS T E X . , PAPER, C CHEM. MAT. NOTE: MONTHLY CAPACITY UTILIZATION I 1980 1975 LDW 1979 LSEP. 69.4 86.8 86.6 86.2 91.51 1 98.21 1 63.6 85.3 84.8 83.9 63. 6 88.3 85.4 85.1 94.51 1 95.11 67.2 90.6 90.7 90.3 65.3 91.1 91.4 90.9 19731 HIGHl 1 92.6| 1 1 86. 1 | 1 1 83.6| 1 84.3| 1 1 90.81 1 91.4| 86.1 85. 6 84.7 82.1 78.3 75.7 73.6 74.2 74.9 83.6 82. 7 82.2 78.8 74.1 70.8 68.0 69.0 69.9 84.1 82. 0 83.6 77.2 70.0 67.0 58.3 62.0 90.9 90. 0 88.3 86.1 81.8 78.7 76.4 77.1 77.9 91.2 90. 3 88.5 86.0 81.3 77.1 74.0 75.0 76.2 E S T I M A T E S OF A C T U A L OUTPUT AND C A P A C I T Y OUTPUT ARE BOTH EXPRESSED AS PERCENTAGES OF 1967 A C T U A L OUTPUT. E S T I M A T E S OF C A P A C I T Y U T I L I Z A T I O N IN PERCENT ARE C A L C U L A T E D AS R A T I O S OF (1) THE F E D E R A L R E S E R V E ' S S E A S O N A L L Y A D J U S T E D INDEXES OF INDUST R I A L PRODUCTION TO (2) THE CORRESPONDING I N D E X E S OF C A P A C I T Y . INDUSTRIAL M A T E R I A L S ARE I T E M S BOTH PRODUCED AND UScD AS INPUTS BY M A N U F A C T U R I N G PLANTS, M I N E S AND U T I L I T I E S ; INDUSTRIAL M A T E R I A L S COVER M A N Y OF THE ITEMS R E P R E S E N T E D IN TH6 P R I M A R Y PROCESSING GROUPING OF MANUFACTURING AS W E L L AS SOME OF THE OUTPUT OF M I N E S AND U T I L I T I E S — SUCH AS IRON ORE, CRUDE OIL, AND ELECTRICITY SOLD TO INDUSTRY. THE 1973 HIGHS AND 1975 LOWS IN CAPACITY UTILIZATION, SHOWN IN THE TABLES ABOVE, ARE SPECIFIC TO EACH SERIES AND MAY OCCUR IN DIFFERENT MONTHS. INDUSTRIAL PLANTS USUALLY OPERATE AT CAPACITY UTILIZATION RATES THAT ARE WELL BELOW 100 PERCENT; NONE OF THE BROAD AGGREGATE SERIES HAS EVER INDICATED A 100 PERCENT USE JF CAPACITY. CAPACITY UTILIZATION RATES AVERAGED ABOUT 83 PERCENT FOR MANUFACTURING FROM 1955 THROUGH 1979, AND ABUUT 85 PERCENT FOR INDUSTRIAL MATERIALS FOR 1967 THROUGH 1979. IN MANUFACTURING AS A WHOLE, UTILIZATION RATES AS HIGH AS 90 PERCENT HAVE BEEN EXCEbOED ONLY IN WARTIME. THE PEAK RATES OF UTILIZATION IN 1973 WERE ASSOCIATED WITH SIGNIFICANT UPWARD PRESSURE ON PRICES. THE METHODOLOGY AND THE S E R I E S ARE DESCRIBED IN FEDERAL RESERVE MEASURES Q£ CAPACITY AND CAPACITY UTILIZATION. R E V I S E D D A T A ARE FOUND IN "CAPACITY UTILIZATION: MANUFACTURING AND MATERIALS, JANUARY 1967—DECEMBER 1978." BOTH PUBLICATIONS MAY BE OBT A I N E D FROM PUBLICATIONS SERVICES, BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, WASHINGTON, D.C. 20551
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