In April, durable goods capacity utilization was 73.6%, which was the third month in the last four with capacity utilization greater than 73.6%. Compared with one year ago, capacity utilization increased 36.5%, which was the second consecutive month of accelerating growth. April’s month-over-month rate of growth was more than twice as fast as the next fastest rate of growth. Of course, this is mostly due to the easy comparison with last April’s low capacity utilization resulting from the lockdown of the economy.

The annual change in durable goods capacity utilization contracted at a decelerating rate for the second month in a row. The annual rate of contraction of 3.7% was the slowest since March 2020. The annual rate of contraction has bottomed out and is now decelerating at a rapid rate. As the annual rate of change tends to lead capital equipment consumption by seven to 10 months, capacity utilization is signaling a bottom in the annual rate of change in capital equipment about the second quarter of 2021.

The GBI: Metalworking backlog index tends to lead the annual rate of change in capacity utilization by seven to 10 months. In April, the backlog index was 60.0, the second straight month above 60, and above 50, indicating growth in backlogs for the fifth straight month. The backlog index grew 136.2% compared with one year ago. This was the eighth straight month of growth. The annual rate of growth in backlogs accelerated for the second month in a row, indicating that the annual rate of change in capacity utilization should see decelerating contraction for most of 2021.

Accelerating Growth: automotive

Decelerating Growth: 

Accelerating Contraction: food/beverage processing, wood/paper products

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