Capacity Utilization Growing Faster Throughout Manufacturing
Year-over-year growth in durable goods capacity utilization was the strongest since September 2011. Every industry we track except automotive and wood/paper products was growing at an accelerating rate in September.
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In September, durable goods capacity utilization was 75.4%, which was a lower rate than the previous two months. Compared with one year ago, capacity utilization increased 5.5%, which reflected the seventh straight month of growth. However, the rate of growth decelerated for the fifth month in a row, and this was the slowest rate of growth since January 2019.
The annual change in durable goods capacity utilization grew at an accelerating rate for the fifth consecutive month. In addition, September had the fastest annual rate of growth, 6.8%, since September 2011. As the annual rate of change tends to lead capital equipment consumption by seven to 10 months, capacity utilization is signaling strong demand for capital equipment in the second half of 2021 and into 2022.
The GBI: Metalworking backlog index tends to lead the annual rate of change in capacity utilization by seven to 10 months. In September, the backlog index fell below 60.0 for the first time in seven months. Although, the backlog index did grow 28.3% compared with one year ago. This was the 13th straight month of growth. The annual rate of growth in backlogs accelerated for the seventh month in a row, indicating that the annual rate of change in capacity utilization should see accelerating growth in the second half of 2021.
Accelerating Growth: aerospace, construction materials, custom processors, durable goods, electronics/computers, food/beverage processing, forming/fabricating (non-auto), furniture, machinery/equipment, petrochemical processors, plastics/rubber products, primary metals, printing, textiles/clothing/leather goods
Decelerating Growth: automotive, wood/paper products
