Industrial production and capacity utilization.

Released for publication on June 14

Industrial Production increased 0.5 percent in May after an upward revised gain of 0. 3 percent in April. OutPut of motor vehicles and parts continued to rise in May, and utilities Production, boosted by unusually warm weather in May, also contributed to die overall gain. Excluding motor vehicles and parts and utilities, industrial production was little changed in both May and April. Total industrial capacity utilization in May increased 0.2 percentage point to 78.7 percent, after a revised increase of 0. 1 percent in April. At 105.8 percent of its 1987 annual average, total industrial production in May was 3.3 percent below its year-ago level.

In market groups, output of consumer goods excluding motor vehicles and electricity for residential use edged up in April and May, owing mainly to gains in production of durable goods such as appliances, carpeting, and furniture; production of most other consumer goods has changed little in recent months. Output of business equipment other than autos and trucks declined 0.6 percent in May and has fallen more than 3 percent since its peak last September; declines over the past eight months have been most significant in industrial equipment. Production of construction supplies increased 0. 5 percent in May after a rise of 1. 2 percent in April but was still more than 9 percent below its level of a year earlier. Among materials, output of durables increased 0.5 percent further in May, reflecting increases in output of parts for consumer goods, particularly those used by the motor vehicle industry. Production of basic metals, mainly steel, and equipment parts remained weak. Output of nondurable goods materials was little changed for the second month, as gains in textiles were about offset by decreases in paper. Output of energy materials rose 1.4 percent in May, as electricity generation surged in response to increased demand for air conditioning.

In industry groups, output in manufacturing increased 0.2 percent in May; excluding motor vehicles and parts, manufacturing output was unchanged from April. Utilization for manufacturing as a whole edged down 0. 1 percentage point in May. The operating rate for primary processing industries picked up a bit in May, while the rate for advanced processing declined. Output at utilities increased 3.9 percent in May, and production at mines was little changed.

Among producers of nondurable goods, production of both textiles and apparel rose notably in April and May. Textile output has now increased for four consecutive months. An increase of 2 percent in petroleum refining in May also helped boost production of nondurables. In contrast, paper production fell 0.9 percent in May, continuing the decline that began last fall.

Output of durable goods increased in both April and May, with significant gains in motor vehicles and parts and industries that produce construction materials, mainly lumber, and stone, clay, and glass products; in addition, industries associated with these materials, such as appliances, furniture, and fabricated metals, also have increased during the past two months. Production of primary metals was little changed in April and May, after having fallen sharply during the fall and winter. On the negative side, output of both nonelectrical machinery and instruments continue to decline, falling more than 1/2 percent in May.