Economic News Blog
Posted by: Steven Kline, Jr. 16. August 2016

Durable Goods Capacity Utilization Highest in Last Year

(Negative) Durable goods capacity utilization was 76.5 percent in July 2016. The one-month rate of change, which was -0.3 percent in July, contracted for the fifth month in a row and 12 of the last 14 months. The annual rate of change contracted for the seventh straight month but the rate of contraction was unchanged at 0.6 percent for the third 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 sixth month in a row. The trend in the backlog index shows that the rate of change in capacity utilization could bottom out in the the third quarter of 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: 

Decelerating Growth: automotivefurniture; printing  

Accelerating Contraction: custom processorsdurable goodselectronics/computers/telecommunicationsfood/beverage processingforming/fabricating (non-auto)petrochemical processorsplastics/rubber products 

Decelerating Contraction: aerospaceconstruction materialsmachinery/equipmentprimary metalstextiles/clothing/leather goodswood/paper

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