Industrial production and capacity utilization for April 1996.

Released for publication May 15

Industrial production advanced 0.9 percent in April after a decline of 0.5 percent in March, when a strike caused the output of motor vehicles and parts to plunge 14 percent. Excluding the decline and subsequent rebound in production of motor vehicles and parts, the index of industrial production rose 0.3 percent in March and was unchanged in April. At 124.5 percent of its 1987 average, industrial production in April was 2.6 percent higher than it was in April 1995.

Capacity utilization rose 0.5 percentage point in April, to 83.0 percent. As indicated in the Notice at the end of this article, the capacity utilization rates have been revised beginning in January 1995. Revisions to the aggregate capacity indexes and utilization rates for total manufacturing, advanced- and primary-processing, mining, and utilities were trivial.

When analyzed by market group, the data show that the output of consumer goods rose 1.1 percent in April. The production of automotive products, which had fallen nearly 10 percent in March, rebounded 12.5 percent. The production of other durable consumer goods increased nearly 1 percent, the third successive monthly gain; this cumulative rise, however, merely offset the 4 percent drop in January. The output of consumer nondurable goods declined 0.2 percent, as utility output for residential use eased noticeably after a relatively cold March. The production of clothing and chemical products declined further, while the output of food changed little.

Apart from the effects of the strike at General Motors, which had caused large fluctuations in the output of transit equipment, the production of business equipment rose 0.2 percent in March and 0.4 percent in April. The production of computer and office equipment advanced 2.4 percent after even more rapid gains in February and March. The output of industrial equipment, however, eased for a second month.

The output of construction supplies rose 0.9 percent; the cumulative gain over the past three months was larger than the 3 percent drop in January, leaving the level of output about 3/4 percent above its level in December. The production of materials increased 0.7 percent in April, with the strength concentrated in the durable goods materials used to make motor vehicles. The output of nondurable goods materials remained weak. The production of energy materials decreased 1.3 percent, with declines in coal mining and electricity generation.

When analyzed by industry group, the data show that manufacturing output rose 1.3 percent after a loss of 0.8 percent in March; excluding motor vehicles and parts, production rose 0.3 percent in April and 0.1 percent in March. Production in durable manufacturing jumped 2.3 percent, mainly because of the rebound in the motor vehicle and parts industry. Production also increased 1 percent or more for computers, lumber and products, and primary metals. The output of nondurables did not change; declines in textiles and rubber and plastics products offset gains elsewhere. Production in mining decreased 0.8 percent, and the output at utilities fell 1.8 percent.

The factory operating rate, which had fallen 1.0 percentage point in March, rebounded 0.8 percentage point, to 82.0 percent. The utilization rate for motor vehicles and parts included in the advanced-processing grouping--rebounded to 79.3 percent from the strike-depressed March level of 66.8 percent and accounted for the swing in utilization in manufacturing. Among other advanced-processing industries, the changes in utilization were mixed. The utilization rate for primary-processing industries edged up 0.1 percentage point, to 85.3 percent, which is 2.7 percentage points above its 1967-95 average. In mining, the utilization rate fell 0.7 percentage point, to 89 percent. Utilization in coal mining, which had risen 5 percentage points in March, fell 4 percentage points, to 82.2 percent. The operating rate for utilities declined 1.8 percentage points.

NOTICE

Revised indexes of industrial capacity and rates of capacity utilization for 1995 and 1996 are included in the G.17 (419) monthly statistical release. Revisions begin as of January 1995. Revisions in total industry are very small; utilization was 82.7 percent in the first quarter of 1996, the same as previously reported.

Updated estimates of capacity incorporate the data on actual and planned investment by manufacturing industries reported in the Bureau of the Census's Investment Plans Survey issued in late March, as well as more detailed, revised utilization rates from the Census Bureau's Survey of Plant Capacity for 1993 and 1994. The revisions to the capacity indexes affect the utilization rates reported in the G.17 release because monthly utilization equals the monthly index of production divided by the related monthly capacity index.

Industrial capacity grew 3.8 percent from December 1994 to December 1995, 0.1 percentage point less than was previously estimated. Capacity in manufacturing grew 4.3 percent, also 0.1 percentage point less than previously reported. Within manufacturing, annual capacity growth for durable manufacturing was revised up 0.5 percentage point, to 6.1 percent, with noticeable upward revisions for computers and electrical machinery. Capacity growth for nondurable manufacturing was revised down 0.8 percentage point, to 1.9 percent, with downward revisions for printing and publishing and for rubber and plastics products. In electric and gas utilities, capacity grew 1.1 percent in 1995; in mining, capacity edged down. For 1996, overall industrial capacity is projected to grow 4.0 percent, 0.5 percentage point higher than previously estimated.

Diskettes containing the revised data are available from Publications Services, Board of Governors of the Federal Reserve System, Washington, DC 20551 (202-452-3245). Data are also available through the Economic Bulletin Board of the Department of Commerce; for information, call 202-482-1986.

[TABULAR DATA OMITTED]