Capacity Utilization Headed in the Right Direction
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The good news is that the manufacturing capacity utilization rate is finally headed in the right direction. Many MDM subscribers see a direct tie (lagging a few months) between revenue levels and manufacturing capacity utilization.
As Adam Fein notes in his Distribution Trends blog (Growth Ahead for Industrial Distributors), manufacturing capacity utilization grew at an annualized rate of 7.7% in the third quarter. That and other indicators, including accelerating U.S. exports as the rest of the world recovers faster than the U.S., is causing Fein to raise his forecasts for industrial distribution with “slightly positive” year-over-year growth in the first quarter of 2010. The weakening dollar also is helping exports.
MDM will feature Fein in its upcoming 2010 Economic Outlook for Wholesale Distribution Nov. 19.
As always, find the latest economic indicator
news in the MDM Databank. Here is the latest
Industrial Production/Capacity Utilization report.
The
graphic below, from the Federal Reserve, shows capacity utilization rates over time through the current quarter. Grey bars
indicate times of recession.
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This report includes: Revenue and employment growth trends, the number and size distribution of companies, gross margin, wages, other operating statistics and expert commentary to help you interpret the sector data in light of current macroeconomic trends
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