Industrial Production and Capacity Utilization for December 1999.Released for publication January January: see month. 14 Industrial production increased 0.4 percent in December December: see month. , the same rate as in November November: see month. . At 140.5 percent of its 1992 average, industrial production in December was 5.0 percent higher than in December 1998. For the fourth quarter as a whole, the total index increased at an annual rate of 6.6 percent, up from 4.8 percent in the third quarter. The rate of capacity utilization Capacity Utilization measures the rate at which a firm makes use of their capital productive capacities, such as factories and machinery. Capacity Utilization generally rises when the economy is healthy and falls when demand softens. for total industry edged up in December, to 81.3 percent, a level 0.8 percentage point below its 1967-98 average. MARKET GROUPS The output of consumer goods consumer goods Any tangible commodity purchased by households to satisfy their wants and needs. Consumer goods may be durable or nondurable. Durable goods (e.g., autos, furniture, and appliances) have a significant life span, often defined as three years or more, and , which had been flat in November, increased 0.2 percent in December. The output of durable consumer goods declined for a second month as the production of automotive products fell a cumulative total of 2 1/4 percent over the last two months of the year. The production of other durable consumer goods advanced, with increases in the indexes for home electronics and miscellaneous consumer durable goods durable goods Goods, such as appliances and automobiles, that have a useful life over a number of periods. Firms that produce durable goods are often subject to wide fluctuations in sales and profits. Also called consumer durables. more than offsetting a sharp decline in appliances. Although the monthly fluctuations in appliance A stand-alone hardware device or software environment dedicated to a specific task. See hardware appliance and software appliance. output have been volatile, production for the year as a whole was up quite sharply. The production of nondurable non·du·ra·ble adj. Not enduring; being in a state of constant consumption: nondurable items such as paper products. n. A consumable item: nondurables such as food. consumer goods advanced 0.4 percent. Most of the gain came from a rebound rebound (rē´bownd), n/v 1. a recovery from illness. n 2. an outbreak of fresh reflex activity after withdrawal of a stimulus rebound adjective in the output of energy products after unusually mild weather in November had cut sales of residential gas and electricity nearly 4 percent. The output of non-energy consumer products edged up after a rise of about 2 percent over the two preceding months; in December, the production indexes for foods and tobacco and for chemical products rose further but were mostly offset by declines in the output of clothing and paper products. The production of business equipment, which had increased about 1 1/2 percent over the preceding two months, eased a bit in December. The uptrend uptrend A series of price increases in a security or in the general market. Some investors believe a security tends to take on a certain inertia; as a result, these investors search for stock in an uptrend, thinking that it will probably continue to move in was interrupted in·ter·rupt v. in·ter·rupt·ed, in·ter·rupt·ing, in·ter·rupts v.tr. 1. To break the continuity or uniformity of: Rain interrupted our baseball game. 2. by a drop of 4.4 percent in the output of transit equipment and of 1.1 percent in the production of the "other equipment" group, particularly farm machinery and equipment. The output of industrial equipment remained weak, edging down in both November and December. The production of information processing information processing: see data processing. information processing Acquisition, recording, organization, retrieval, display, and dissemination of information. Today the term usually refers to computer-based operations. and related equipment rose more than 1 percent, bringing the gain over the last 12 months to nearly 24 percent. The output of defense and space equipment fell more than 1 percent in December, to a level 4.2 percent below that in December 1998; the cumulative decline in this index over the 1990s was about 40 percent. The production of construction supplies rose 0.4 percent further in December, to a level 3.0 percent higher than in December 1998; from the third quarter to the fourth quarter, this index increased at an annual rate of about 7 percent. The output of materials increased 0.8 percent after an average monthly gain of 0.7 percent in the preceding three months. The output of durable goods materials increased 0.7 percent, a bit less than the average monthly gain recorded over the past year. Another strong increase in equipment parts, particularly semi-conductors, was partly offset by a decline in the index for original equipment parts used to make motor vehicles. The output of nondurable goods materials edged up 0.2 percent. The output of energy materials, which had grown slowly over the year, jumped 1.8 percent in December after a 1 percent decline in November. INDUSTRY GROUPS Manufacturing output advanced 0.2 percent in December, one-third as much as in November. The declines in the production of motor vehicles and parts and aircraft and parts reduced growth in manufacturing about 0.3 percentage point in December. For the fourth quarter, the annual rate of factory output accelerated to more than 7 percent, with continued strength in durables Durables A category of consumer goods, durables are products that do not have to be purchased frequently. Some examples of durables are appliances, home and office furnishings, lawn and garden equipment, consumer electronics, toy makers, small tool manufacturers, sporting goods, and a sharp step-up step-up A scheduled increase in the exercise or conversion price at which a warrant, an option, or a convertible security may be used to acquire shares of common stock. in the output of nondurables, which had changed little, on balance, between mid- mid- pref. Middle: midbrain. 1998 and the third quarter of 1999. In the fourth quarter, the overall factory operating rate Operating rate The percentage of total production capacity of a company, industry, or country that is being used. operating rate The portion of capacity at which a business operates. increased 0.6 percentage point, to 80.3 percent. The output of durables, which increased 7 percent over the year, edged up in December as the output of motor vehicles and parts, which dropped 2.8 percent in December, reversed the gains made in the preceding three months. In addition, the production of iron and steel edged down after a strong increase in November, and the output of aerospace and miscellaneous transportation fell another 1.5 percent, bringing the decline in this group to nearly 14 percent over 1999. In December, the computer and office equipment industry again advanced less rapidly than in earlier months, while the output of semiconductors and related electronic components rose 3.2 percent, in line with the rapid growth of the past year. The recent recovery in the output of farm machinery, which had erased e·rase tr.v. e·rased, e·ras·ing, e·ras·es 1. a. To remove (something written, for example) by rubbing, wiping, or scraping. b. only a small part of the earlier severe decline, was interrupted in December. The production in nondurable manufacturing increased 0.3 percent, to a level 2.6 percent higher than in December 1998. Among nondurable manufacturing industries manufacturing industries npl → industrias fpl manufactureras manufacturing industries npl → industries fpl de transformation , production gains were widespread; however, the output of leather and products and textile textile Any filament, fibre, or yarn that can be made into fabric or cloth, and the resulting material itself. The word originally referred only to woven fabrics but now includes knitted, bonded, felted, and tufted fabrics as well. mill products declined for another month. In the fourth quarter, production rose substantially in the foods, tobacco, chemicals, paper, and printing and publishing industries. The factory operating rate edged down in December, to 80.3 percent. Utilization utilization, n 1. the extent to which a given group uses a particular service in a specified period. Although usually expressed as the number of services used per year per 100 or per 1000 persons eligible for the service, utilization rates may be in primary-processing industries held at 83.7 percent, while that for advanced-processing industries declined 0.3 percentage point, to 79.1 percent. Output at utilities, which had fallen back more than 2 1/2 percent in November, increased 3.5 percent; the operating rate at utilities rebounded 3 percentage points, to 93.1 percent. Boosted by the continuing recovery in oil and gas extraction extraction /ex·trac·tion/ (eks-trak´shun) 1. the process or act of pulling or drawing out. 2. the preparation of an extract. , mine production increased 0.4 percent, about the same gain as in November; the utilization rate at mines, which increased to 83.4 percent, was still noticeably no·tice·a·ble adj. 1. Evident; observable: noticeable changes in temperature; a noticeable lack of friendliness. 2. Worthy of notice; significant. below its long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. average. While drilling and other oil and gas field activity has been recovering since June June: see month. , the level of activity remains relatively low. REVISION OF INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION As previously announced, the Federal Reserve Board on November 30, 1999, published a revision to the index of industrial production (IP) and the related measures of capacity and capacity utilization for the period from January 1992 to October October: see month. 1999. The updated measures reflect both the incorporation of newly available, more comprehensive source data typical of annual revisions and, for some series, the introduction of improved methods for compiling com·pile tr.v. com·piled, com·pil·ing, com·piles 1. To gather into a single book. 2. To put together or compose from materials gathered from several sources: the series. The new source data are for recent years, primarily 1997 and 1998, and the modified methods affect data from 1992 onward on·ward adj. Moving or tending forward. adv. also on·wards In a direction or toward a position that is ahead in space or time; forward. . In addition, the supplementary series on the gross value of products leaving the industrial sector are now expressed in 1996 dollars; these series begin in 1977. The updated IP measures include some annual data from the Census Bureau's 1997 Census of Manufactures and from selected editions of its 1998 Current Industrial Reports. Annual data from the U.S. Geological Survey The term geological survey can be used to describe both the conduct of a survey for geological purposes and an institution holding geological information. A geological survey on metallic and nonmetallic non·me·tal·lic adj. 1. Not metallic. 2. Chemistry Of, relating to, or being a nonmetal. Adj. 1. minerals (except fuels) for 1997 and 1998 are also introduced. The updating includes revisions to the monthly indicator for each industry (either physical product data, production worker hours, or electric power usage) and revised seasonal factors. The revision introduced improved measures of production for computers and office equipment (SIC 357) and motor vehicles (SIC 3711, 3). The new monthly measure for computers is derived from detailed information on the major products produced by the industry. For example, from 1994 to 1998, quarterly data on the physical quantity and average unit values of about 1,100 distinct models of personal computers, notebooks, servers, and workstations are used to construct the new IP index for computers; previously, monthly electric power use by the industry was used as the within-year indicator of production. The new measures of motor vehicle production incorporate price weights for the different models of light vehicles; previously, all autos and light trucks were weighted equally in compiling an aggregate figure. In addition, the monthly production indicators for bolts and fasteners fasteners In construction, connectors between structural members. Bolted connections are used when it is necessary to fasten two elements tightly together, especially to resist shear and bending, as in column and beam connections. (SIC 345) and for metalworking machinery (SIC 354) were changed from electric power use to production worker hours. [Figures ILLUSTRATION OMITTED] Capacity and capacity utilization rates Capacity utilization rate The percentage of the economy's total plant and equipment that is currently in production. Usually, a decrease in this percentage signals an economic slowdown, while an increase signals economic expansion. have been revised to incorporate preliminary data from the Census Bureau's 1998 Survey of Plant Capacity, which covers manufacturing, along with other new data on capacity from the U.S. Geological Survey, the Department of Energy, and other organizations. The revision is available on the Board's web site, at www.federalreserve.gov/releases/g17, and on diskettes from Publications Services (telephone 202-452-3245). The revised data are also available through the STAT-USA web site of the Department of Commerce (www.stat-usa.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. ). Further information on these revisions is available from the Board's Industrial Output Section (telephone 202-452-3197).
Industrial production and capacity utilization, December 1999
Industrial production,
index, 1992 = 100
Category 1999
Sept.(r) Oct.(r) Nov.(r)
Total 138.1 139.4 139.9
Previous estimate 138.0 139.1 139.5
Major market groups
Products, total(2) 127.6 129.0 129.2
Consumer goods 117.1 118.9 118.9
Business equipment 173.7 175.1 176.1
Construction supplies 134.1 135.3 135.7
Materials 155.7 156.8 158.0
Major industry groups
Manufacturing 142.9 144.3 145.2
Durable 175.0 176.4 177.7
Nondurable 111.8 113.1 113.6
Mining 98.3 99.3 99.8
Utilities 117.7 118.6 115.5
Capacity utilization,
percent
Average, Low, High,
1967-98 1982 1988-89
Total 82.1 71.1 85.4
Previous estimate ... ... ...
Manufacturing 81.1 69.0 85.7
Advanced processing 80.5 70.4 84.2
Primary processing 82.4 66.2 88.9
Mining 87.5 80.3 88.0
Utilities 87.4 75.9 92.6
Industrial production,
index, 1992 = 100
Percentage change
Category 1999
1999(1)
Dec.(p) Sept.(r) Oct.(r)
Total 140.5 .2 1.0
Previous estimate ... .2 .8
Major market groups
Products, total(2) 129.4 -.1 1.1
Consumer goods 119.1 .4 1.5
Business equipment 175.6 -.1 .8
Construction supplies 136.2 .9 .9
Materials 159.2 .7 .7
Major industry groups
Manufacturing 145.5 .3 1.0
Durable 177.9 .3 .8
Nondurable 114.0 .3 1.2
Mining 100.2 -.2 1.0
Utilities 119.5 -.1 .7
Capacity utilization,
percent
1998 1999
Dec. Sept.(r) Oct.(r)
Total 80.6 80.6 81.2
Previous estimate ... 80.6 81.0
Manufacturing 79.9 79.7 80.2
Advanced processing 78.8 78.7 79.2
Primary processing 83.1 82.8 83.3
Mining 81.4 81.8 82.6
Utilities 88.9 92.0 92.6
Industrial production,
index, 1992 = 100
Percentage change
Category
1999(1)
Dec. 1998
to
Nov.(r) Dec.(p) Dec. 1999
Total .4 .4 5.0
Previous estimate .3 ... ...
Major market groups
Products, total(2) .2 .2 3.6
Consumer goods .0 .2 3.5
Business equipment .6 -.3 5.6
Construction supplies .3 .4 3.0
Materials .7 .8 7.3
Major industry groups
Manufacturing .6 .2 5.1
Durable .7 .1 7.0
Nondurable .5 .3 2.6
Mining .5 .4 2.2
Utilities -2.6 3.5 6.2
Capacity utilization, per MEMO
Capacity,
per-
centage
1999 change,
Dec. 1998
to
Nov.(r) Dec.(p) Dec. 1999
Total 81.2 81.3 4.1
Previous estimate 81.0 ... ...
Manufacturing 80.4 80.3 4.6
Advanced processing 79.4 79.1 5.5
Primary processing 83.7 83.7 2.3
Mining 83.1 83.4 0.3
Utilities 90.1 93.1 1.4
NOTE. Data seasonally adjusted Seasonally adjusted Mathematically adjusted by moderating a macroeconomic indicator (e.g., oil prices/imports) so that relative comparisons can be drawn from month to month all year. or calculated from seasonally adjusted monthly data. (1.) Change from preceding month. (2.) Contains components in addition to those shown. (r) Revised. (p) Preliminary. |
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