Operating Rate Posts First Gain Since July
American factories, mines and utilities operated at 79.3% of capacity in November, the first improvement in that level since July, the government said Tuesday.
The Federal Reserve Board said the operating rate last month was 0.3 percentage points higher than it was in September and October as manufacturing industries showed moderate but widespread gains.
Despite the improvement, the operating rate of American industry remained 2.5 percentage points lower than it had been in mid-1984, the high point for the recovery from the 1981-82 recession.
Still, analysts expressed hope that the November gain marked a turning point for American manufacturers, who have suffered for the past 24 months with layoffs and production cutbacks caused by stiff foreign trade competition.
The November increase in operating rates was the first since a 0.2 percentage point gain left industry operating at 79.2% of capacity in July. This rate held steady in August and then dropped to 79% in September and October.
In November, the operating rate at manufacturing plants rose to 79.9%, a gain of 0.4 percentage point.
Factories producing durable goods, items expected to last three or more years, operated at 76.5% of capacity, while plants making non-durable goods operated at 85% of capacity.
Since mid-1984, the operating rate for non-durable goods industries has risen by about 1 percentage point while the rate for durable goods industries has fallen by 3 percentage points.
During November, the largest gains were in primary metals and paper products. Auto plants operated at 74.1% of capacity, up from 73.7% in October.
Operating rates in the mining industry declined for the tenth consecutive month, falling to 71.5% of capacity, compared to 80.7% a year ago. Although coal production and oil and gas well drilling increased, crude oil production declined further, reflecting further cutbacks caused by falling energy prices.
The operating rate at utilities rose 0.2 percentage point to 80.6% of capacity.
