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Industrial production and capacity utilization.

Released for publication on December 6

The index of industrial production decreased 0.4 percent in November, after three months of little overall change. A drop in the output of motor vehicles and parts and a strike at a major producer of construction and mining equipment accounted for much of the November decline. Industrial output in other industries edged down, on balance, last month. At 107.8 percent of its 1987 annual average, total industrial production was 0.5 percent below its year-ago level. Total industrial capacity utilization decreased 0.5 percentage point in November, to 79.1 percent.

Whe analyzed by market group, the data show that the production of consumer goods declined

[TABULAR DATA OMITTED]

0.5 percent in November, reflecting a curtailment in the output of autos and trucks and a small decrease in the production of nondurable consumer goods, such as food and clothing. The output of other consumer durables, which include appliances and other goods for the home, has changed little on balance since July. The output of business equipment fell 0.7 percent in November, with the drop in motor vehicles and the strike-related decline in construction and mining equipment more than accounting for the loss.

Elsewhere in business equipment, overall production has increased a bit in recent months because of a pickup in the output of information processing equipment, particularly computers; however, the production of industrial equipment, even after allowing for the effect of the strike, has continued to fall. The output of construction supplies changed little in November after having fallen since June. The output of materials decreased 0.4 percent in November, mainly because of a cut in production of motor vehicle parts and supplies; the production of other materials was little changed, on average.

When analyzed by industry group, the data show that manufacturing production decreased 0.5 percent in November, and capacity utilization at factories fell 0.6 percentage point to 78.0 percent. Operating rates for both primary and advanced-processing industries decreased last month, and declines were widespread. The utilization rate for advanced-processing industries recovered only 1 percentage point between March (its trough) and July, and in November it fell back to near its March level; much of the recent weakness has been concentrated in transportation equipment, electrical machinery, instruments, and furniture.

Despite the recent declines, the operating rate for primary-processing industries has remained well above its spring trough. The output of iron and steel increased for the fifth consecutive month, but production in most other primary-processing industries held steady or fell last month.

Output at mines was unchanged in November, and an increase of more than 1 percent in the output of electric utilities boosted utilities production.
COPYRIGHT 1992 Board of Governors of the Federal Reserve System
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Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Publication:Federal Reserve Bulletin
Date:Feb 1, 1992
Words:450
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