Economic News Blog
Posted by: Steven Kline, Jr. 15. July 2016

Durable Goods Capacity Utilization Highest since February

(Negative) Durable goods capacity utilization was 76.1 percent in June 2016. The one-month rate of change, which was -0.2 percent in June, contracted for the fourth month in a row and 11 of the last 13 months. However, June's rate of contraction was the slowest of those 11 months that it contracted. The annual rate of change contracted at an accelerating rate for the sixth month in a row.   

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 fifth 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: automotive

Decelerating Growth: electronics/computers/telecommunicationsfurniture; printing  

Accelerating Contraction: custom processorsdurable goodsforming/fabricating (non-auto)machinery/equipmentpetrochemical processorsplastics/rubber products 

Decelerating Contraction: aerospaceconstruction materialsfood/beverage processingprimary metalstextiles/clothing/leather goodswood/paper

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