Economic News Blog
Posted by: Steven Kline, Jr. 18. February 2016

Durable Goods Capacity Utilization Continues to Contract

Durable goods capacity utilization was 75.7 percent in January 2016. The one-month rate of change, which was -1.1 percent in January, contracted for the seventh time in eight months. The last three months have contracted noticeably faster than previous months. The annual rate of change contracted for the first time since April 2014.   

Since June 2008, the Gardner Business Index backlog index has been a very good leading indicator of durable goods capacity utilization. The annual rate of change for our backlog index contracted at an accelerating rate in January for the ninth month in a row. The trend in the backlog index shows that capacity utilization will likely contract well into 2016.

We use capacity utilization as a leading indicator for a number of industries, although it is not tracked for as many industries as industrial production. You can see the trends in capacity utilization for a number of industries below.

Accelerating Growth: food/beverage processing  

Decelerating Growth: aerospaceautomotiveconstruction materialscustom processorsforming/fabricating (non-auto)furniturepetrochemical processorsplastics/rubber products; printing; textiles/clothing/leather goods 

Accelerating Contraction: durable goodselectronics/computers/telecommunicationsmachinery/equipmentprimary metalswood/paper

Decelerating Contraction: none

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