Economic News Blog
Posted by: Steven Kline, Jr. 17. August 2015

July Durable Goods Capacity Utilization Highest of 2015

Durable goods capacity utilization was 76.6 percent in July 2015. This was the highest capacity utilization rate since December 2014. The one-month rate of change was -0.3 percent for the second month in a row. These are the first months of contraction in the capacity utilization rate since February 2014. The annual rate of change continued to grow, but the rate of growth decelerated for the fourth consecutive month. The annual rate of growth was its slowest since November 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 July for the third month in a row. The trend in the backlog index shows that capacity utilization will likely be contracting by the end of the year.

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 processingpetrochemical processors

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

Accelerating Contraction: electronics/computers/telecommunicationsprimary metals

Decelerating Contraction: none

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