Capacity utilization is one of the key measures for determining the need for companies to add new capacity. One of the more useful websites for economic development is www.economy.com. This site offers an abundance of economic indictors and reports for pay but also includes a section called “free lunch” at www.economy.com/freelunch that provides a very useful time series of graphs, tables and charts of capacity utilization by type of industry.
The manufacturing sector in general is operating at approximately 73% of capacity. This level has been declining since mid-1999 and continues to do so. However, on a positive note, the stock market, encouraged by rumors of an improving economy, has responded positively. It will take a few months before the impact will be felt in the capacity utilization that will drive new and expanded facilities requirements. In the meantime, a review of your target industries’ capacity utilization may give you insight into when to increase your marketing efforts.