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 3^rd or 4^th 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