Capacity Utilization Increases for Third Month

In July, durable goods capacity utilization was 68.1%, which was the third month in a row the rate of capacity utilization moved higher. Compared with one year ago, capacity utilization contracted 10.0%, which was the third straight month that the month-over-month rate of change contracted at a slower rate. 

The annual change in durable goods capacity utilization contracted at an accelerating rate for the ninth month in a row, falling to -8.5% from -7.7%. July was the fastest rate of annual contraction since April 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 and likely through the remainder of the year.

The GBI: Metalworking backlog index tends to lead the annual rate of change in capacity utilization by seven to 10 months. In July, the backlog index contracted just 2.8% compared with one year ago, which was the slowest rate of contraction since the month-over-month rate of change began contracting in November 2018. 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, electronics/computers, forming/fabricating (non-auto), furniture, machinery/equipment, petrochemical processors, plastics/rubber products, primary metals, printing, textiles/clothing/leather goods, wood/paper products

Decelerating Contraction: food/beverage processing

Reports

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.