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Industrial Production and Capacity Utilization for April 1999.

Released for publication May 14

Industrial production, which had been essentially flat between October and February, accelerated in March and April. The total index was revised upward to show a gain of 0.5 percent in March and is estimated to have risen 0.6 percent in April. Manufacturing output also grew 0.6 percent in April, its third straight monthly gain of close to 1/2 percent. Some of the acceleration came in high-technology industries, but many other industries showed improvement as well. At 134.0 percent of its 1992 average, industrial production in April was 2.0 percent higher than in April 1998. Capacity utilization in manufacturing, mining, and electric and gas utilities rose 0.2 percentage point in April, to 80.6 percent, down from 82.6 percent a year earlier.

MARKET GROUPS

The production of consumer goods, which had been little changed in March, advanced 0.6 percent in April. The output of durable consumer goods jumped 2.1 percent, more than reversing a decline in March; output gains were sizable for automotive products, carpeting and furniture, and home electronics. The production of nondurable consumer goods rose 0.2 percent, even though the output of tobacco products declined and the production of gasoline was cut by disruptions at refineries. The advance in the production of non-energy nondurable consumer goods was led by a continued recovery in the output of consumer chemical products and an uptick in apparel production.

The output of business equipment increased 0.3 percent in April after an upward-revised advance of 0.7 percent in March. Although the assembly of business vehicles gained substantially, a further drop in the production of civil transport aircraft caused the measure for transit equipment to decline again. The index for industrial equipment, which had fallen over the two preceding quarters, turned up, and the index for information processing equipment rose substantially further; the latter increased more than 3 percent over March and April. In contrast, the production of farm machinery and equipment fell back after some recovery in February and March. The production of defense and space equipment fell 2.0 percent in April, partly because of a strike at a major shipyard.

The production of construction supplies, which had eased in February and March from the high level in January, resumed its growth. Over the past twelve months, it has increased 5.3 percent. The index for business supplies, which had been stagnant for about a year, has picked up recently. The output of materials increased 0.9 percent in April after an upward-revised gain of 0.8 percent in March. The indexes for both durable goods materials and energy materials rose more than 1 percent, with large increases in semiconductors and computer parts for a second month and a rebound in coal production from a dip in March.

INDUSTRY GROUPS

Production in manufacturing increased 0.6 percent, compared with 0.4 percent in the two preceding months. The factory operating rate rose 0.2 percentage point, to 79.8 percent, but was down from 81.7 percent last April. Durable goods production rose 0.8 percent, a gain similar to that in March, and the advances were again widespread. The increase in the output of electrical machinery, boosted by an acceleration of production in the semiconductor and communications industries, rose to 2.5 percent in April. The production of motor vehicles and parts rose 2.3 percent, and computer output increased nearly 2 percent. Production declined at facilities for iron and steel, aircraft and parts, and shipbuilding. With the solid gains in production, the rate of capacity utilization in durable manufacturing rose 0.3 percentage point, to 79.6 percent, a level close to its 1967-98 average.

The output of nondurable manufactured goods advanced 0.3 percent; production has been in a slow recovery since last fall and has increased about 1 percent over the past three months. The output of textile mill products, apparel, and paper and products rebounded from declines in March, while the production of chemicals and products and rubber and plastics products advanced further. The operating rate in nondurable manufacturing rose 0.2 percentage point. But at 80.6 percent, utilization for these industries is more than 2 percentage points below its level of April 1998 and is nearly 3 percentage points below its long-term average.

Despite rebounds in coal and metal ores, mining production edged up only 0.1 percent; it has dropped 10 percent over the past fifteen months. Drilling for oil and gas wells fell back in April to a very low level. Primarily because of the low level of oil and gas extraction, the rate of capacity utilization in mining remained at 80.2 percent in April, down from 88.2 percent twelve months earlier.

Output at utilities, which had rebounded 2.8 percent in March, advanced another 0.7 percent and is up 3.0 percent from the level of April 1998. The operating rate at electric utilities is near its 1988-89 high, while utilization at gas utilities is below its 1967-98 average.

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Publication:Federal Reserve Bulletin
Geographic Code:1USA
Date:Jun 1, 1999
Words:853
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