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Industrial Production and Capacity Utilization Performance


Industrial Production Capacity Utilization Performance

Total industrial production, capacity and utilization (Federal Reserve, 2010)

The statistical release of the Federal Reserve, Industrial Production and Capacity Utilization: The 2010 Annual Revision, presents a thorough analysis of the industrial production (IP) index and the related performance measures of production capacity.

The industrial production index measures the real output of the manufacturing, mining, and electric and gas utilities industries. The base year considered within this revision is 2007, this lowering the level of the IP index for most periods. For monitoring this performance indicator, data was gathered on a monthly basis, from two main types  of sources:

  • output measured in physical units
  • data on inputs to the production process.

Total industrial capacity increased moderately from 2006 through 2009, but is expected to decline in 2010. The rates of change in both 2009 and 2010 have been revised up somewhat from earlier estimates, but revisions to earlier years were smaller (Federal Reserve, 2010).

The annual revision indicates an increased rate of capacity utilization for total industry by 0.7% point higher in the fourth quarter of 2007. At 71.1% , overall utilization in the fourth quarter of 2009 was 0.2% point below its previous estimate.

Industrial Production Capacity Utilization Performance

Capacity utilization (Federal Reserve, 2010)

The main conclusions of the annual revision are:

  • Manufacturing production contracted sharply in 2008 and 2009.
  • The production index for final products and nonindustrial supplies indicates moderate gains from 2005 through 2007 and then fell between 2008 and 2009.
  • In 2006 and 2007, the capacity utilization rate for total industry was situated above its long-run average of 80.6%, registered before between 1972 to 2009.

The Key Performance Indicators (KPIs) used within this review are:

For further examples of performance indicators, explore the Production KPI examples section of the library of KPI examples available on (, 2010).


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