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March 15 -- The Census Bureau invites public comments to OMB by April 14, 2021 regarding the continuation of the Quarterly Survey of Plant Capacity Utilization (QPC) through 2024.
 
The U.S. Census Bureau, on behalf of the Federal Reserve Board (FRB) and the Defense Logistics Agency (DLA), within the Department of Defense (DOD), requests an extension of approval for the Quarterly Survey of Plant Capacity Utilization (QPC). The survey provides information on use of industrial capacity in manufacturing and publishing plants as defined by the North American Industry Classification System (NAICS). The Survey of Plant Capacity Utilization began in the 1970's as an annual survey that collected fourth quarter data only. The annual survey continued through 2006. In 2007, the FRB requested that the survey be converted to a quarterly survey due to the necessity for quarterly data rather than annual. The survey is the only governmental source of capacity utilization rates at industry levels. Changes in capacity utilization are considered important indicators of investment demand and inflationary pressure. For these reasons, the estimates of capacity utilization are closely monitored by government policy makers and private sector decision makers.

The survey collects the value of quarterly production, the value of production that could be achieved if operating under “full production” capability, and the value of production that could be achieved if operating under “emergency production” capability. The ratio of the actual to the full is the basis of the estimates for full capacity utilization rates and similarly, the actual to the emergency for the emergency capacity utilization rates. The survey also collects information by shift, on work patterns at the actual production level.

The FRB is the primary user of the current QPC data and expressed the need for these quarterly data. FRB publishes measures of industrial production (IP), capacity, and capacity utilization in its G.17 statistical release, which has been designated by the federal government as a Principal Federal Economic Indicator. Utilization rates from the QPC survey are a principle source for the measures of capacity and capacity utilization. The indexes of IP are either estimated from physical product data or estimated from monthly data on inputs to the production process, specifically production worker hours and an indicator of capital input. For many years, data on electric power use was used as the indicator of industry capital input. The deregulation of electricity markets led to the deterioration in the coverage and quality of the electricity data. As a result, in November 2005, the FRB discontinued its use of the industrial electric power data in the current estimates of IP. To maintain the quality of the IP index, the collection of these quarterly data, including the utilization rate data and the workweek of capital, is critical to the indicators of capital input use and industry output.

The FRB uses these data in several ways. First, the QPC data are the primary source of information for the capacity indexes and utilization rates published by the FRB. Second, the QPC utilization rate data are used as indicators of output for some industries in the estimation of monthly IP. Third, the QPC utilization rate data and the workweek data are used to improve the projections of labor productivity that are used to align IP with comprehensive benchmark information from the Economic Census covering the Manufacturing sector and the Annual Survey of Manufactures. Finally, utilization rate data will assist in the assessment of recent changes in IP, as most of the high-frequency movement in utilization rates reflect production changes rather than capacity changes.

The DLA uses the data to assess industrial base readiness and ramp-up time to meet demand for goods under selected national emergency scenarios.
 
Census QPC website: https://www.census.gov/programs-surveys/qpc.html
FRB Industrial Production and Capacity Utilization - G.17: https://www.federalreserve.gov/releases/g17/Current/default.htm
2021-24 QPC submission to OMB: https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202103-0607-001 Click on IC List for survey instruments, View Supporting Statement for technical documentation
FR notice inviting public comments: https://www.federalregister.gov/documents/2021/03/15/2021-05295/agency-information-collection-activities-submission-to-the-office-of-management-and-budget-omb-for
 
Point of contact: Amy Newman-Smith, Methodology Director for Manufacturing, Investment, and Construction Programs, Economic Statistical Methods Division, U. S. Census Bureau (301) 763-6595 amy.m.newman.smith@census.gov   
 
For AEA members wishing to submit comments to OMB, "A Primer on How to Respond to Calls for Comment on Federal Data Collections" is available at https://www.aeaweb.org/content/file?id=5806

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