Economic News Blog
Posted by: Steven Kline, Jr. 17. October 2016

Durable Goods Capacity Utilization Down 0.6% in September

(Negative) Durable goods capacity utilization was 75.8 percent in September 2016. The one-month rate of change, which was -0.6 percent in September, contracted for the seventh month in a row and 14 of the last 16 months. The annual rate of change contracted for the ninth straight month but was unchanged from last month.   

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 a decelerating rate for the eighth month in a row. The backlog index tends to lead capacity utilization by seven to 10 months. Therefore, the trend in the backlog index shows that the rate of change in capacity utilization has likely bottomed out.

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: textiles/clothing/leather goods

Decelerating Growth: automotivefurniture; printing  

Accelerating Contraction: construction materialscustom processorsdurable goodselectronics/computers/telecommunicationsfood/beverage processingmachinery/equipmentplastics/rubber products  

Decelerating Contraction: aerospaceforming/fabricating (non-auto)petrochemical processorsprimary metalswood/paper

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