Capacity Utilization Improving

In August, durable goods capacity utilization was 69.4%, which was the fourth month in a row the rate of capacity utilization moved higher. Compared with one year ago, capacity utilization contracted 8.5%, which was the fourth straight month that the month-over-month rate of change contracted at a slower rate and the slowest rate of contraction since February. 

The annual change in durable goods capacity utilization contracted at an accelerating rate for the 10th month in a row, falling to -9.0% from -8.4%. August was the fastest rate of annual contraction since March 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 the third quarter of 2020.

The GBI: Metalworking backlog index tends to lead the annual rate of change in capacity utilization by seven to 10 months. In August, the backlog index contracted just 3.2% compared with one year ago. However, the annual rate of contraction in the backlog index appeared to reach a bottom in June. The Backlog index is indicating that the accelerating contraction in durable goods capacity utilization will end sometime during the 3rd or 4th quarter of 2020.

Accelerating Growth: 

Decelerating Growth: 

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

Decelerating Contraction: electronics/computers, food/beverage processing


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.