U.S. Industrial Production & Capacity Utilization

Output and capacity answer different questions

Industrial production measures real output. Capacity utilization divides that output by an estimate of sustainable productive capacity. Production can increase while utilization falls if estimated capacity grows more quickly. A utilization reading below 100% is not a count of unused factories or unemployed workers.

The total includes manufacturing, mining, and electric and gas utilities. It does not cover the entire service economy, so industrial production should not be described as monthly GDP. The index’s 2017 reference level is a scale convention rather than a claim that every industry or month had the same output in that year.

Compare a level, a pace and a rate

Year-over-year production growth compares matching months. Previous-month growth describes a shorter pace and can be volatile. Utilization is already expressed in percent; subtracting two readings gives percentage points. Comparing growth percentages without those definitions can produce a misleading impression of the industrial cycle.

Inspect both histories in separate unit panels. Use the same range, note gaps and retain the exact-value download. G.17 histories can be revised as new underlying information and estimates arrive. See the producer’s scope and methods.