Industrial Production and Capacity Utilization for March 1999.

Released for publication April 16

Industrial production edged up 0.1 percent in March; revisions to earlier months left the level of the February index little changed from that previously reported. In manufacturing, production remained unchanged in March and was just a bit above its December level. The output of mines decreased 0.7 percent, a decrease that reversed the February gain. The output of utilities increased 1.9 percent in March and has picked up noticeably, on balance, since last fall. At 132.8 percent of its 1992 average, total industrial production in March was 1.6 percent higher than it was in March 1998. For the first quarter as a whole, total industrial production increased at an annual rate of just 0.7 percent, down noticeably from the 2 1/4 percent gain in the fourth quarter. Overall capacity utilization slipped in March to 80.1 percent, a level 2 percentage points below its long-term average and 2 1/2 percentage points below its March 1998 level.

MARKET GROUPS

The production of consumer goods was flat in March, as a rebound in the production of energy goods was offset by declines in other categories. The 1/2 percent decline in the production of durable consumer goods was mainly caused by reductions in the output of automotive products and household appliances from the elevated levels reached earlier this year. The production of non-energy, nondurable consumer goods was generally weak in March. A notable exception was the production of consumer chemicals, which increased for the second consecutive month after having declined, on balance, since the second quarter of 1998.

The output of business equipment decreased 0.2 percent in March and was 0.6 percent below its December level. Most of the recent declines in this market group have been concentrated in the production of industrial and transit equipment, which decreased again in March. In addition, the production of information processing equipment has risen more slowly in the first quarter after having expanded very rapidly in the fourth quarter of last year.

The production of construction supplies, which had increased sharply between the end of 1997 and January 1999, declined for a second month in March as the seasonal pickup in output was less than normal. The output of materials increased 0.3 percent mostly because of another large increase in semiconductors and computer parts. Although the production of basic metals edged up, it remained about 6 percent lower than in March 1998. The output of nondurable materials edged down in March, largely because of a decline in textile materials. Nonetheless, the output of nondurable materials has firmed since December mainly because of a pickup in the production of paper. The production of energy materials declined and has been weak, on balance, since last fall.

INDUSTRY GROUPS

Durable goods production edged up 0.1 percent in March: Increases in furniture and fixtures, metals, computer and office equipment, semiconductors, instruments, and miscellaneous manufactures were largely offset by declines in other durable goods industries. In particular, the output of transportation equipment decreased after having posted an increase in February, while the production of several types of industrial machinery continued to weaken. Nondurable goods production edged down 0.1 percent and was roughly unchanged from its December level. Increases in the production of tobacco, paper, chemicals, and rubber and plastic products were more than offset by declines in other industries; the largest losses occurred in textiles, apparel, and leather products, which were significantly below their March 1998 levels.

The operating rate in manufacturing declined to 79.3 percent--2 1/4 percentage points below its level a year earlier. The utilization rates for both advanced-and primary-processing industries decreased 0.2 percentage point. The utilization rate for mines declined 0.6 percentage point and remained well below its long-term average. The rebound in the output of utilities pushed the utilization rate up 1 3/4 percentage points, to 90.9 percent, 3 1/2 percentage points above its long-term average.

Industrial production and capacity utilization, March 1999

                         Industrial production, index, 1992=100

 Category                     1998          1999

                             Dec.(r)   Jan.(r)   Feb.(r)

Total                         132.3     132.3     132.6
Previous estimate             132.4     132.4     132.6
Major market groups
Products, total(2)            124.4     124.5     124.6
 Consumer goods               114.9     115.1     115.2
 Business equipment           167.9     167.1     167.2
 Construction supplies        131.0     132.5     131.8
Materials                     145.2     144.9     145.6
Major industry groups
Manufacturing                 136.7     136.5     137.0
 Durable                      161.5     161.5     161.9
 Nondurable                   111.7     111.4     111.9
Mining                         99.0      97.4      98.0
Utilities                     111.8     114.0     113.2

                         Industrial production, index, 1992=100

 Category
                              1999      1998(1)   1999(1)

                             Mar.(p)    Dec.(r)   Jan.(r)

Total                         132.8        0.1      -.1
Previous estimate               ...         .2       .0
Major market groups
Products, total(2)            124.6        .0        .0
 Consumer goods               115.2        .1        .2
 Business equipment           166.9       -.1        .5
 Construction supplies        131.0       1.1       1.2
Materials                     146.1        .4        .2
Major industry groups
Manufacturing                 137.0        .2       -.1
 Durable                      162.0        .3        .0
 Nondurable                   111.8        .1        .3
Mining                         97.3      -2.1      -1.6
Utilities                     115.4       1.1       2.0

                         Industrial production, index, 1992=100

                                 Percentage change
 Category
                                   1999(1)        Mar. 1998
                                                      to
                              Feb.(r)   Mar.(p)   Mar. 1999

Total                           0.3       0.1       1.6
Previous estimate               0.2       ...        ...
Major market groups
Products, total(2)               .1        .0       1.1
 Consumer goods                  .1        .0      -.5
 Business equipment              .1        .2       4.2
 Construction supplies           .5        .6       5.1
Materials                        .5        .3       2.4
Major industry groups
Manufacturing                    .3        .0       2.2
 Durable                         .2        .1       4.4
 Nondurable                      .4        .1       -.5
Mining                           .7                -8.0
Utilities                        .7       1.9       1.3

                            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

                            Capacity utilization, percent

                               1998      1998      1999

                               Mar.     Dec.(r)   Jan.(r)

Total                          82.6      80.7      80.3
Previous estimate               ...      80.7      80.4
Manufacturing                  81.6      80.0      79.6
 Advanced processing           80.6      79.0      78.3
 Primary processing            84.4      82.9      83.1
Mining                         88.4      82.0      80.6
Utilities                      90.5      88.2      89.9

                                                      MEMO
                           Capacity utilization    Capacity,
                                  percent             per-
                                                    centage
                                     1999            change,
                                                   Mar. 1998
                                                      to
                              Feb.(r)   Mar.(p)    Mar. 1999

Total                          80.3      80.1         4.7
Previous estimate              80.3       ...         ...
Manufacturing                  79.5      79.3         5.2
 Advanced processing           78.4      78.2         6.2
 Primary processing            82.8      82.6         2.7
Mining                         81.0      80.4         1.1
Utilities                      89.2      90.9         0.8

NOTE. Data seasonally adjusted 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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