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Industrial Production and Capacity Utilization for October 1999.

Released for publication November 15

Industrial production, which had edged down in September when Hurricane Floyd slowed activity along the eastern seaboard, increased 0.7 percent in October. In the recovery after the storm, output rebounded at electric utilities and in a number of manufacturing industries. At 136.1 percent of its 1992 average, industrial production in October was 2.8 percent higher than in October 1998. The rate of capacity utilization for total industry rose 0.3 percentage point, to 80.7 percent, a level 1.4 percentage points below its 1967-98 average.


The output of consumer goods rose 1.4 percent in October after having dropped 0.8 percent in September. The output of durable consumer goods increased 2.1 percent as the production of both automotive products and other durable goods, particularly goods for the home such as appliances, increased sharply. After having declined 0.3 percent in September, the production of nondurable consumer goods advanced 1.1 percent. The output of energy products rebounded 2.1 percent from declines that totaled 3 percent over August and September, and the output of non-energy consumer nondurables rose 1.0 percent, led by gains in foods and consumer chemicals.

The production of business equipment, which had eased 0.2 percent in September, was flat in October. Sharp declines in the output of transit equipment, particularly commercial aircraft, and other equipment offset gains in the production of information processing equipment and industrial equipment. Within the information processing group, the output of computers has risen more slowly in recent months than earlier in the year. The output of defense equipment in October recouped about half of its 1.6 percent decline in September.

The production of construction supplies rose 0.7 percent in October, after a smaller increase in the previous month, to a level 4.3 percent higher than in October 1998. The output of materials increased 0.5 percent, a bit more than in September. The increases in the output of durable goods materials, which were strong over the past year, slowed to 0.3 percent in October, while growth in the output of nondurable goods materials accelerated to 0.7 percent. The production of energy materials reversed most of the 1 percent drop in September.


Manufacturing output advanced 0.6 percent in October after a gain of only 0.1 percent in September. The increase in the output of durables was led by gains at makers of iron and steel, light trucks, computers, semiconductors, and miscellaneous manufactures; however, gains in hi-tech industries, such as computers and related parts, while still rapid, have on balance been smaller in recent months. While most other durable industries recorded fractional increases, the output indexes for commercial aircraft and parts and for farm machinery declined noticeably. The ongoing contraction in the output of commercial aircraft and parts brought its index in October to a level about 20 percent below the level of October 1998. The output of farm machinery, which had dropped sharply to a low in August, remained more than 40 percent below its high in the summer of 1998. Production in nondurable manufacturing increased for a third month after earlier weakness. Among nondurables, gains in October were widespread, except for rubber and plastics products and leather and products. The tobacco, textile, and apparel products industries, which had suffered setbacks in the preceding two or three months, reversed a portion of those losses in October. The output of printing and publishing, chemicals and products, petroleum products, and foods advanced again.

The factory operating rate rose 0.3 percentage point, to 79.7 percent, with increases in both durable and nondurable industries. While the utilization rate for durable manufacturing was a bit above its 1967-98 average, the rates for nondurable manufacturing industries other than petroleum products were below their averages.

The output at utilities, which had fallen back more than 31/2 percent in August and September, increased 2.0 percent; utilization at utilities recovered and moved up, to 93.9 percent. Mine production edged up after having eased a bit in September; utilization at mines remained at 81.7 percent.


On November 30, 1999, the Federal Reserve Board will publish a revision to the index of industrial production (IP) and the related measures of capacity and capacity utilization for the period January 1992 to October 1999. The updated measures will reflect both the incorporation of newly available, more comprehensive source data typical of annual revisions and, for some series, the introduction of improved methods for compiling the series. The new source data are for recent years, primarily 1997 and 1998, and the modified methods affect data from 1992 onward. In addition, the supplementary series on the gross value of products leaving the industrial sector will be expressed in 1996 dollars; these series begin in 1977.

The updated IP measures will include some annual data from the Bureau of the Census's 1997 Census of Manufactures and from selected editions of its 1998 Current Industrial Reports. Annual data from the U.S. Geological Survey on metallic and nonmetallic minerals (except fuels) for 1997 and 1998 will also be introduced. The updating will also include revisions to the monthly indicator for each industry (either physical product data, production worker hours, or electric power usage) and revised seasonal factors.

The revision will introduce improved measures of production for computers and office equipment (SIC 357) and for motor vehicles (SIC 3711, 3). The new monthly production measure for computers is derived from detailed information on the major products produced by the industry. For example, from 1994 to 1998, quarterly data on the physical quantity and average unit value of about 1,100 distinct models of personal computers, notebooks, servers, and workstations are used to construct the new IP index for computers; previously, monthly electric power use by the industry was used as the within-year indicator of production. The new measures of motor vehicle production incorporate price weights for the different models of light vehicles; previously, all autos and light trucks were weighted equally in compiling an aggregate figure. In addition, the monthly production indicators for bolts and fasteners (SIC 345) and for metalworking machinery (SIC 354) will be changed from electric power use to production worker hours.

Capacity and capacity utilization rates will be revised to incorporate preliminary data from the 1998 Survey of Plant .Capacity of the Bureau of the Census, which covers manufacturing, along with other new data on capacity from the U.S. Geological Survey, the Department of Energy, and other organizations.

Once the revision is published, it will also be made available on the Board's web site, at http://, and on diskettes from Publications Services (telephone 202452-3245). The revised data will also be available through the STAT-USA web site of the Department of Commerce ( Further information on these revisions is available from the Board's Industrial Output Section (telephone 202-452-3197).


Industrial production and capacity utilization, September 1999
 Industrial production,
 index, 1992 = 100

Category 1999

 July(r) Aug.(r) Sept.(r) Oct.(p)

Total 135.0 135.3 135.2 136.1
Previous estimate 135.0 135.5 135.0 ...
Major market groups
Products, total(2) 125.7 126.4 126.0 127.0
 Consumer goods 115.8 116.7 115.8 117.4
 Business equipment 172.2 172.8 172.4 172.4
 Construction supplies 132.8 132.6 133.0 134.0
Materials 150.3 150.0 150.5 151.3

Major industry groups
Manufacturing 139.0 139.4 139.6 140.4
 Durable 167.5 167.9 167.9 168.9
 Nondurable 110.7 111.1 111.4 112.1
Mining 98.4 99.5 99.2 99.4
Utilities 121.5 120.2 117.2 119.5

 Industrial production,
 index, 1992 = 100

 Percentage change

 July(r) Aug.(r) Sept.(r) Oct.(p)

Total .6 .3 -.1 .7
Previous estimate .6 .4 -.3 ...
Major market groups
Products, total(2) .0 .6 -.4 .8
 Consumer goods -.3 .7 -.8 1.4
 Business equipment .7 .4 -.2 .0
 Construction supplies 1.1 -.2 .3 .7
Materials 1.4 -.2 .4 .5

Major industry groups
Manufacturing .4 .3 .1 .6
 Durable 1.2 .3 .0 .6
 Nondurable -.5 .4 .3 .6
Mining .7 1.1 -.2 .1
Utilities 2.8 - 1.1 - 2.5 2.0

 Industrial production,
 index, 1992 = 100

Category Oct. 1998
 Oct. 1999

Total 2.8
Previous estimate ...
Major market groups
Products, total(2) 1.7
 Consumer goods 1.9
 Business equipment 2.0
 Construction supplies 4.3
Materials 4.7

Major industry groups
Manufacturing 3.2
 Durable 4.8
 Nondurable 1.1
Mining -2.6
Utilities 2.5

 Capacity utilization, percent

 Average, Low, High
 1967-98 1982 1988-89 1998

Total 82.1 71.1 85.4 81.3
Previous estimate ... ... ... ...
Manufacturing 81.1 69.0 85.7 80.3
 Advanced processing 80.5 70.4 84.2 79.6
 Primary processing 82.4 66.2 88.9 82.4
Mining 87.5 80.3 88.0 84.7
Utilities 87.4 75.9 92.6 92.0

 Capacity utilization, percent


 July(r) Aug.(r) Sept.(r) Oct.(p)

Total 80.6 80.6 80.4 80.7
Previous estimate 80.6 80.7 80.3 ...
Manufacturing 79.5 79.5 79.4 79.7
 Advanced processing 78.4 78.4 78.3 78.5
 Primary processing 82.7 82.9 82.8 83.1
Mining 81.1 81.9 81.7 81.7
Utilities 95.5 94.5 92.1 93.9

 Oct. 1998
 Oct. 1999

Total 3.6
Previous estimate ...
Manufacturing 3.9
 Advanced processing 4.7
 Primary processing 2.1
Mining 1.0
Utilities .5

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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Publication:Federal Reserve Bulletin
Geographic Code:1USA
Date:Dec 1, 1999
Previous Article:Treasury and Federal Reserve Foreign Exchange Operations.
Next Article:Announcements.

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