Economic News Blog
Posted by: Steven Kline, Jr. 16. October 2015

Durable Goods Capacity Utilization Contracts for Fourth Month

Durable goods capacity utilization was 75.9 percent in September 2015. This was the lowest capacity utilization rate in the last three months. The one-month rate of change, which was -0.7 percent in September, contracted for the fourth month in a row. September had the fastest rate of contraction in those four months. The annual rate of change continued to grow, but the rate of growth decelerated for the sixth consecutive month. The annual rate of growth was its slowest since August 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 in September for the fifth month in a row. The trend in the backlog index shows that capacity utilization will likely be contracting by the end of the year and 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: aerospaceautomotivefood/beverage processing

Decelerating Growth: construction materialscustom processorsdurable goodsforming/fabricating (non-auto)furnituremachinery/equipmentpetrochemical processors; plastics/rubber productsprintingtextiles/clothing/leather goodswood/paper

Accelerating Contraction: electronics/computers/telecommunicationsprimary metals

Decelerating Contraction: none

Comments are reviewed by moderators before they appear to ensure they meet Gardner Business Media’s submission guidelines.
blog comments powered by Disqus