Industrial Production and Capacity Utilization: The 2002 Historical and Annual Revision

N O T E . Charles Gilbert directed the 2002 revision and, along with Kimberly Bayard, William Cleveland, and Dixon Tranum, prepared the revised estimates of industrial production. Norman Morin and John Stevens prepared the revised estimates of capacity and capacity utilization. In late 2002, the Federal Reserve published a revision of its index of industrial production (IP) and the related measures of capacity and capacity utilization. The primary feature of the revision was the reclassification back to 1972 of production and capacity indexes for individual industries from the Standard Industrial Classification, or SIC, to the North American Industry Classification System, or NAICS. Also, the revision, as usual, updated all measures to incorporate newly available and more comprehensive source data for recent years, and it introduced improved methods for measuring the annual real output of communications equipment manufacturing. Along with the updating and the restatement of the data using NAICS, the base year used for comparison has changed. Now all production and capacity indexes are expressed as percentages of output in 1997; the previous comparison base was 1992. The rebasing affects all series from their start dates, which are 1919 for total IP and manufacturing IP, 1948 for manufacturing capacity, and 1967 for total industrial capacity. The Federal Reserve's accompanying indexes of industrial electric power use, which begin in 1972, have also been restated to accord with NAICS, rebased to use 1997 as a comparison year, and revised to incorporate previously unavailable data. The new information resulted in an upward revision to the rate of increase in industrial production and capacity from 1997 to 2000 (chart 1).