Capacity Utilization Growth Is Accelerating

Durable goods capacity utilization was the second highest rate of capacity utilization since October 2016.

Durable goods capacity utilization was 75.6 percent in June 2018, the second highest rate of capacity utilization since October 2016. The month-over-month rate of growth was 2.0 percent, which was just the second time it reached that rate since January 2015. The 1/12 rate of change grew for the 15th time in 17 months, though the annual growth, now 0.9 percent, was virtually unchanged for the fifth straight month. Even though the GBI: Metalworking backlog index has indicated that capacity utilization should have peaked or should be very close to peaking, perhaps capacity utilization has not yet peaked because it did not grow as fast as the backlog index suggested it would.

The backlog index tends to lead capacity utilization by seven to 10 months, and capacity utilization tends to lead capital equipment consumption by seven to 10 months. Capacity utilization should peak in the second half of 2018, which would lead to a peak in capital equipment consumption in some time in the first half of 2019. 

Accelerating Growth: construction materials, durable goods, electronics/computers/telecommunications, food/beverage processing, forming/fabricating, primary metals

Decelerating Growth: machinery/equipment, petrochemical processors, printing, textiles/clothing/leather goods, wood/paper products

Accelerating Contraction: aerospace, custom processors, plastics/rubber product 

Decelerating Contraction: automotive, furniture


Top Shops

‘Top Shops’ is a benchmarking and recognition program designed to help shops build their business.

World Machine Tool Survey

An independent annual survey that collects statistics from machine tool consuming and producing countries and compares them in real U.S. dollars.

Capital Spending Survey

An annual survey that collects statistics regarding budgeted spending on machine tools, testing equipment, software and more.

Gardner Business Index

A diffusion index measuring month-to-month changes in activity at durable goods and discrete parts manufacturing facilities.