Research
5/18/2020 | 1 MINUTE READ

Durable Goods Capacity Utilization Falls to Lowest Rate Ever

In April, durable goods capacity utilization was 55.3%, which was the lowest rate ever. Compared with one year ago, capacity utilization contracted 26.6%, which was the fastest rate of month-over-month contraction ever. This was the 11th month in a row and the 12th of the last 13 months that capacity utilization contracted. 

The annual change in durable goods capacity utilization contracted at an accelerating rate for the sixth month in a row, falling to -4.4% from -2.2%. April was the fastest rate of annual contraction since May 2010. As the annual rate of change tends to lead capital equipment consumption by seven-to-10 months, capacity utilization is signaling accelerating contraction in capital equipment spending through at least into the third quarter of 2020 and likely through the remainder.

The GBI: Metalworking backlog index tends to lead the annual rate of change in capacity utilization by seven-to-10 months. Since the pandemic began, the annual rate of contraction in the Backlog index has contracted at an accelerating rate. The Backlog index is indicating that the accelerating contraction in durable goods capacity utilization will continue through the summer.

 
 

Accelerating Growth: 

Decelerating Growth: electronics/computers

Accelerating Contraction: aerospace, automotive, construction materials, custom processors, durable goods, food/beverage processing, forming/fabricating (non-auto), furniture, machinery/equipment, petrochemical processors, plastics/rubber products, primary metals, printing, textiles/clothing/leather goods, wood/paper products

Decelerating Contraction: 

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