Industrial Production and Capacity Utilization for January 1999.

Released for publication February, 17

Industrial production was unchanged in January. Manufacturing output increased 0.1 percent, and utility output increased 0.2 percent, but production at mines decreased 1.8 percent. At 136.7 percent of its 1992 average, manufacturing production in January was 2.2 percent higher than it had been in January 1998. Overall capacity utilization in January slipped 0.3 percentage point, to 80.5 percent, 1 1/2 percentage points below its 1967-98 average.

MARKET GROUPS

The output of durable consumer goods, which increased 0.3 percent, was lifted by an increase in automotive products. In contrast, the production of nondurable consumer goods excluding energy fell 0.3 percent and was down 2 1/4 percent from its level a year ago, a drop reflecting, in part, softness for clothing and paper products. The output of consumer energy products, which has been volatile recently, rose noticeably again in January.

The production of business equipment edged down 0.1 percent. Declines in the output of industrial equipment and transit equipment more than offset a gain in information processing equipment. Some of the decrease in transit equipment reflects further reductions in commercial aircraft production, which peaked last fall alter having climbed rapidly during the past few years. The output of construction supplies was flat, but at a high level, following strong gains in the fourth quarter. The production of business supplies increased 0.2 percent.

The production of materials inched up 0.1 percent after having risen modestly in the preceding three months. The production of durable goods materials increased 0.5 percent mainly because of strength in the production of semiconductors and computer parts. However, the output of basic metals fell 0.6 percent, continuing the weakness that had begun in early 1998. In addition, the output of consumer durable parts, which rose rapidly late last year, has somewhat eased recently. The production of nondurable materials also edged down 0.2 percent, a move mainly reflecting ongoing weakness in textiles and chemicals.

INDUSTRY GROUPS

Manufacturing output edged up 0.1 percent, with a small gain in the production of durable goods and a slight pullback in the production of nondurable goods. Within durable goods industries, changes in production were mixed. Industries with large increases in production included lumber, furniture, and electrical machinery; industries showing cut-backs included primary metals, transportation equipment (notably civilian aircraft), and miscellaneous manufactures. The production of nondurable goods edged down 0.1 percent in January after having been flat in December. Losses in tobacco, apparel, and leather products more than offset gains in petroleum and food products. Mining production fell again, pulled down by a sharp drop-off in coal production and the continued contraction in oil and gas extraction.

The factory operating rate dropped 0.3 percentage point, to 79.6 percent--more than 2V2 percentage points below the level of January 1998. The utilization rates for advanced-processing and primary-processing industries slipped 0.3 percentage point. The utilization rate for mines fell 1.5 percentage points, to a level about 6 percentage points below its long-term average. Temperatures remained relatively warm, and the operating rate for utilities, at about 90 percent, was little changed.

NOTICE

The data in this release include preliminary estimates of capacity growth for 1999. The capacity estimates in next month's release will incorporate a small change in the method used to interpolate the annual estimates of capacity growth to the monthly frequency. The current monthly capacity figures are computed under the assumption that capacity growth is constant from the beginning to the end of a year but that growth rates may change abruptly between the last months of one year and the first months of the next. The new procedure, which allows capacity growth rates to change smoothly over time, will be incorporated in the data beginning with October 1998.

Industrial production and capacity utilization, January 1999

                                     Industrial production,
                                      index, 1992 = 100

           Category                          1998

                                  Oct.(r)    Nov.(r)    Dec.(r)

Total                             132.4      132.3      132.5
Previous estimate                 132.0      132.5      132.8
Major market groups
Products, total(2)                124.9      124.5      124.7
  Consumer goods                  115.2      115.1      115.4
  Business equipment              169.0      168.0      168.0
  Construction supplies           128.4      129.1      130.3
Materials                         144.5      144.8      145.2
Major industry groups
Manufacturing                     136.1      136.4      136.6
  Durable                         161.2      161.0      161.4
  Nondurable                      110.9      111.6      111.6
Mining                            102.0      101.4      100.3
Utilities                         116.5      111.4      114.1

                                 Capacity utilization, percent

                                 Average,     Low,      High,
                                 1967-98      1982     1998-89

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
                                                1998(1)
                            Jan. (p)    Oct. r    Nov. r    Dec. r

Total                         132.5       .4        -.1       .2
Previous estimate               ...       .5        -.1       .2
Major market groups
Products, total(2)            124.6       .6        -.3       .2
  Consumer goods              115.4       .4        -.1       .3
  Business equipment          167.7      1.0        -.6       .0
  Construction supplies       130.3      1.2         .5      1.0
Materials                     145.3       .1         .2       .3
Major industry groups
Manufacturing                 136.7       .7         .2       .1
  Durable                     161.6      1.0        -.1      -.1
  Nondurable                  111.6       .3         .7       .7
Mining                        98.5       -.4        -.5      -.5
Utilities                     114.3     -3.1       -4.4     -4.4

                                   Capacity utilization, percent

                             1998             1998

                             Jan.     Oct.(r)   Nov.(r)   Dec.(r)
Total                        83.0      81.3      80.9      80.8
Previous estimate              ...     81.4      81.0      80.9
Manufacturing                82.2      80.3      80.1      79.9
  Advanced processing        81.0      79.6      79.5      79.1
  Primary processing         85.2      82.4      82.3      82.4
Mining                       90.0      84.7      84.2      83.1
Utilities                    87.2      92.0      87.9      90.0

                                    Industrial production,
                                     index, 1992 = 100

                                      Percentage change
           Category
                                    1991(1)     Jan. 1998
                                                   to
                                   Jan. (p)     Jan. 1999

Total                                 .0           1.7
Previous estimate                    ...           ...
Major market groups
Products, total(2)                    -.1          1.6
  Consumer goods                       .0          -.5
  Business equipment                  -.1          7.3
  Construction supplies                .0          3.8
Materials                              .1          1.9
Major industry groups
Manufacturing                          .1          2.2
  Durable                              .1          5.1
  Nondurable                          -.1         -1.3
Mining                               -1.8         -8.5
Utilities                              .2          4.2

                                 Capacity          MEMO
                                 utilization,     Capacity,
                                  percent        percentage
                                                   change,
                                                 Jan. 1998
                                     1999           to
                                   Jan. (p)      Jan. 1999

Total                                80.5          4.9
Previous estimate                    ...            ...
Manufacturing                        79.6          5.5
  Advanced processing                78.8          6.5
  Primary processing                 82.1          2.8
Mining                               81.6           .9
Utilities                            90.1           .9

NOTE. Data seasonally adjusted adjusted monthly data.

(1.) Change from preceding month.

(2.) Contains components in addition to those shown.

(r) Revised.

(p) Preliminary.