INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION

Industrial production increased 0.1 percent in July after a gain of 0.8 percent in June. Manufacturing output increased 0.1 percent in July; excluding motor vehicles and parts, manufacturing production rose 0.4 percent. The output at utilities rose 0.7 percent, and production at mines declined 1.3 percent.

At 119.4 percent of its 1997 average, industrial production in July was 3.0 percent above its year-earlier level. In July, capacity utilization for total industry declined 0.1 percentage point, to 79.7 percent, a rate 1.3 percentage points below its 1972--2004 average.

Market Groups

The output of consumer goods declined 0.5 percent in July. The production of consumer durable goods fell 1.6 percent; a drop of 2.9 percent in the output of automotive products contributed heavily to the decrease.

The index for appliances, furniture, and carpeting declined 0.6 percent, and the index for home electronics recorded a rise of about the same amount. The production of consumer non-durables was unchanged.

A decline in the production of paper products offset a rise in the output of clothing, and the indexes for foods and tobacco and for chemical products were unchanged.

The production of consumer energy products edged down 0.1 percent. The production of business equipment moved up 1.3 percent in July—the eighth consecutive month of increases. The index for transit equipment rose 0.2 percent; a rise in the output of medium and heavy trucks more than off-set declines in the production of light motor vehicles and of civilian aircraft.

The output of information processing equipment moved up 2.0 percent, and the index for industrial and other equipment rose 1.2 percent. The production of defense and space equipment moved up 1.5 percent and was 10.4 percent higher than its year-ago level.

The index for construction supplies rose 0.7 percent in July, and the output of business supplies edged up 0.1 percent. The output of materials was unchanged in July. A rise of 0.2 percent in the production of non-energy materials counterbalanced a decline of 0.7 percent in energy materials.

Continued gains in the output of semiconductors boosted the index for durable goods materials, which rose 0.4 percent; the output of nondurable materials slipped 0.1 percent, as the output of paper materials and of chemical materials decreased.

Industry Groups

Production in manufacturing increased 0.1 percent in July, as a gain in the output of durables more than offset a decline in the production of non-durables.

Capacity utilization in manufacturing was unchanged at 78.3 percent, a rate 1.3 percentage points above its rate a year earlier but 1.5 percentage points below its 1972--2004 average. Within durable goods manufacturing, which rose 0.4 percent, the production of motor vehicles and parts fell 2.3 percent and reversed much of its June increase.

The index for nonmetallic mineral products also registered a small decline, but production for all other major categories of durables remained unchanged or increased.

The largest gains—2.3 percent each—were recorded in the index for computer and electronic products, which stood 16.4 percent higher than its level a year earlier, and the index for primary metals, which turned up after three consecutive months of decline.

The output of nondurable manufacturers decreased 0.2 percent; the production of petroleum and coal products fell sharply, and the indexes for paper, printing and support, and chemicals registered smaller declines. The output of non-NAICS manufacturing industries (publishing and logging) declined 0.2 percent.

Utilities output rose 0.7 percent in July as temperatures remained higher than average, and capacity utilization rose to 87.9 percent, its highest rate since February 2004. Mining output fell 1.3 percent, partly because of hurricane-related shutdowns of oil and gas platforms in the Gulf of Mexico; the operating rate declined 1.1 percentage points, to 87.5 percent.

By stage of process, capacity utilization for industries in the crude stage stepped down 1.0 percentage point, to 85.6 percent. For industries in the primary and semi-finished stages, the operating rate rose 0.2 percentage point, to 80.5 percent; for industries in the finished stage, utilization was unchanged at 77.9 percent.