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Industrial production and capacity utilization.

Released for publication November 16

Industrial production increased 0.3 percent in October after having fallen 0.2 percent in September. Much of the October gain reflected a significant hike in light truck assemblies; excluding motor vehicles and parts, production increased only 0.1 percent. At 109.0 percent of its 1987 annual average, total industrial production in October was 0.6 percent above its year-ago level. Total industrial capacity utilization edged up 0.1 percent in October, to 78.5 percent.

When analyzed by market group, the data show that the output of consumer goods grew 0.5 percent in October, while the production of business equipment picked up 1.1 percent; both were buoyed by the gain in light trucks. The output of durable consumer goods other than automotive products decreased 0.2 percent, with a decline in appliance production partly offset by increases elsewhere. The output of nondurable consumer goods edged up 0.1 percent; the output of gasoline increased, but the production of clothing declined.

The production of business equipment rose sharply in October, a move reflecting primarily the strength in trucks and a continuation of the strong upward trend in the output of informationprocessing equipment, especially computers. In addition, the production of industrial equipment rose in October, although the level of output was still below that of around midyear. The index for defense and space equipment fell 1 percent in October, continuing the steady decline it has shown since late 1990. The production of construction supplies, business supplies, and industrial materials were all unchanged in October. Materials for both durable and nondurable goods edged up in October, after having declined, on balance, in August and September; energy materials fell, as the output from coal mines and utilities decreased.

When analyzed by industry group, data show that manufacturing output increased 0.3 percent in October; the factory operating rate advanced 0.1 percentage point, to 77.4 percent. The production of durables rose 0.7 percent, nearly retracing its September decline, while the production of nondurables was unchanged. The increase in durables in October resulted mainly from gains in light trucks, furniture, and nonelectrical machinery. Despite this improvement, the output of durable goods has changed little since May, after having increased steadily earlier in the year. Growth in the output of nondurable goods has also slowed since spring. Chemicals, rubber and plastic products, and textiles have been the major contributors to this deceleration; the output of these industries grew steadily in the first part of the year but plateaued by early summer.

The output in the mining industry picked up 0.5 percent in October. Natural gas production increased, as most platforms in the Gulf of Mexico came back on line after having been disrupted by Hurricane Andrew in late August. The drilling of oil and gas wells also increased in October, but coal mining fell again. Utilities output dropped back a bit after its September gain.
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Publication:Federal Reserve Bulletin
Date:Jan 1, 1993
Previous Article:Treasury and Federal Reserve foreign exchange operations.
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