Following is the text of the US industrial production and capacity utilization report for June 2011, released by the Federal Reserve.
Industrial production increased 0.2% in June after having edged down 0.1% in May. For the second quarter as a whole, total industrial production increased at an annual rate of 0.8%. Manufacturing output was unchanged in June. In the second quarter, supply chain disruptions following the earthquake in Japan curtailed the production of motor vehicles and parts and restrained output in related industries; the production index for overall manufacturing was little changed for the quarter. The output of mines rose 0.5% in June, while the output of utilities climbed 0.9%. At 93.1% of its 2007 average, total industrial production in June was 3.4% above its year earlier level. The capacity utilization rate for total industry remained unchanged at 76.7% in June, a rate 2.2 percentage points above the rate from a year earlier but 3.7 percentage points below its average from 1972 to 2010.
Production recorded a mix of gains and losses across the major market groups in June. Output for the second quarter as a whole moved up in most of the major market groups, although the production of consumer goods decreased at an annual rate of 1.2%. Declines in the output of consumer goods occurred for both durables and non durables. In June, the production of consumer goods was unchanged, with a decline of 0.5% in durables offsetting an increase of 0.2% in non durables. Among consumer durables, lower production of automotive products; appliances, furniture, and carpeting; and miscellaneous goods more than offset a small gain in home electronics. Within consumer non durables, the output of non- energy non durable was unchanged; increased output of chemical products was offset by declines elsewhere. The index for consumer energy products moved up 0.8%, with gains in the indexes for fuels and for residential utilities.
The production of business equipment declined 0.7% in June, with transit equipment and information processing equipment recording decreases of 1.9% and 1.4%, respectively, and industrial and other equipment being little changed. The output of business equipment increased at an annual rate of only 1.2% in the second quarter after gains averaging more than 12% over the previous five quarters. An increase of 7.0% in the production of transit equipment accounted for most of the rise in business equipment in the second quarter; the output of information processing equipment fell, and the output of industrial and other equipment was little changed.
In June, the index for defense and space equipment decreased 1.4% after having registered gains in each of the previous five months. The output of construction supplies increased for the fourth consecutive month in June and climbed at an annual rate of 6.4% in the second quarter. The production of business supplies rose in June after having declined in both April and May and was little changed for the second quarter as a whole.
The output of materials to be further processed in the industrial sector increased 0.5% in June. The output of durable materials rose 0.7%. The indexes for all of its major categories advanced; the largest gain was an increase of 1.7% for consumer parts following two consecutive monthly declines. The index for nondurable materials edged down in June, while gains in both oil production and electricity generation helped boost the index for energy materials 0.8%. For the second quarter, materials output increased at an annual rate of 1.3%.
The production of durable materials rose 1.1%, with gains in equipment parts and other durable materials more than offsetting a sizable decline in consumer parts. The output of nondurable materials moved down 3.9%; declines in chemical materials and paper materials more than offset a large increase for textile materials. The index for energy materials rose 5.2%.
Manufacturing output was unchanged in June. For the second quarter as a whole, the manufacturing index edged up at an annual rate of 0.2%, a notably smaller gain than in any quarter since the recession ended in the second quarter of 2009. Capacity utilization for manufacturing was unchanged in June at 74.4%, a rate about 10 percentage points above its trough in June 2009 but 4.6 percentage points below its average from 1972 to 2010.
The production index for durable goods manufacturing was unchanged in June. Among its major categories, the largest increases were for primary metals and fabricated metal products, whereas the most significant decreases were for furniture and related products, motor vehicles and parts, and wood products. For the second quarter, durable manufacturing rose at an annual rate of 1.4%. Robust gains were recorded in aerospace and miscellaneous transportation equipment, nonmetallic mineral products, and fabricated metal products. However, these gains were mostly offset by a large drop for motor vehicles and parts along with decreases for electrical equipment, appliances, and components and for wood products.
The index for nondurable manufacturing increased 0.1% in June; higher output of textile and product mills, petroleum and coal products, and chemicals slightly more than offset lower output in other nondurable categories. For the second quarter, non durables output decreased at an annual rate of 0.2%. Production in the non-NAICS manufacturing industries (logging and publishing) decreased 0.5% in June and dropped at an annual rate of 9.4% for the second quarter as a whole.
In June, the production index for utilities increased 0.9%; its operating rate rose to 79.5%, but that rate remained 7.1 percentage points below its 1972-2010 average. Mining output increased for the fourth consecutive month in June and rose at an annual rate of 6.7% for the second quarter, primarily as a result of gains in natural gas extraction. Capacity utilization in mining climbed to 88.9% in June, a rate 1.5 percentage points above its average from 1972 to 2010.
Capacity utilization rates in June at industries grouped by stage of process were as follows: At the crude stage, utilization increased 0.2 percentage point to 87.2%, a rate 0.8 percentage point above its long-run (1972--2010) average; at the primary and semi finished stages, utilization rose 0.4 percentage point to 74.1%, a rate 7.2 percentage points below its long run average; and at the finished stage, utilization decreased 0.4 percentage point to 75.4%, a rate 1.9 percentage points below its long run average.
(Sourced from www.bloomberg.com)
