Capacity Utilization Growth Widespread Across Manufacturing

In August, durable goods capacity utilization was 76.4%, which was the highest rate of capacity utilization since January 2019. Compared with one year ago, capacity utilization increased 7.0%, which was the sixth straight month of growth, although the rate of growth decelerated for the fourth month in a row. 

The annual change in durable goods capacity utilization grew at an accelerating rate for the fourth consecutive month. And August had the fastest annual rate of growth since November 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 August, the backlog index was above 60.0 for the sixth consecutive month. The backlog index grew 48.0% compared with one year ago. This was the 12^th straight month of growth. The annual rate of growth in backlogs accelerated for the sixth 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, forming/fabricating (non-auto), furniture, machinery/equipment, petrochemical processors, plastics/rubber products, primary metals, printing, textiles/clothing/leather goods, wood/paper products

Decelerating Growth: automotive, food/beverage processing