In June, durable goods capacity utilization was 74.0%. For the last six months, capacity utilization was running at a rate similar to the rate prior to the economic lockdown. And, in three of the last four months, capacity utilization was greater than 74%. Compared with one year ago, capacity utilization increased 12.2%, which was the fourth straight month of growth. Of course, this is somewhat due to the easy comparison with last June’s low capacity utilization as the country was just starting to exit lockdowns.

The annual change in durable goods capacity utilization grew at an accelerating rate for the second consecutive month. And, June had the fastest annual rate of growth since November 2012. The annual rate of change has clearly entered an accelerating growth phase. 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.

The GBI: Metalworking backlog index tends to lead the annual rate of change in capacity utilization by seven to 10 months. In June, the backlog index was above 60.0 for the fourth consecutive month and very near its all-time high. The backlog index grew 92.9% compared with one year ago. This was the 10^th straight month of growth. The annual rate of growth in backlogs accelerated for the fourth 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: automotive, construction materials, custom processors, durable goods, electronics/computers, food/beverage processing, furniture, machinery/equipment, plastics/rubber products, primary metals, textiles/clothing/leather goods, wood/paper products

Decelerating Growth: 

Accelerating Contraction: 

Decelerating Contraction: aerospace, forming/fabricating (non-auto), petrochemical processors, printing