In January, durable goods capacity utilization was 74.7%, which was the second lowest rate of capacity utilization since September 2017. Compared with one year ago, capacity utilization contracted 2.4%. This was the eighth month in a row and the ninth of the last 10 months that capacity utilization contracted. 

The annual change in durable goods capacity utilization contracted at an accelerating rate for the third month in a row, falling from -0.7% to -1.1%. December was the fastest rate of annual contraction since April 2017. 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 the first half of 2020.

The GBI: Metalworking backlog index tends to lead the annual rate of change in capacity utilization by seven-to-10 months. The Backlog index reached its highest level since April 2019. Also, the rate of contraction in the Backlog index decelerated for the first time since it started contracting in March 2019. The Backlog index is indicating that the rate of contraction in durable goods capacity utilization should bottom out around June.

Accelerating Growth: 

Decelerating Growth: electronics/computers, forming/fabricating (non-auto)

Accelerating Contraction: aerospace, construction materials, custom processors, durable goods, furniture, machinery/equipment, petrochemical processors, plastics/rubber products, primary metals, textiles/clothing/leather goods, wood/paper products

Decelerating Contraction: automotive, food/beverage processing, printing