#281. Manufacturing Looking UpPosted on
Manufacturing Looking Up
Recently released information on the state of the manufacturing sector shows a glimmer of hope. Manufacturing production increased 0.8% in April, equating to a 9.5% annual rate, which is faster growth than even during the tech boom of the late 1990s. Production of high-tech equipment increased 0.9% in April, and is up an astonishing 20.4% annual rate in the past six months.
One of the key indicators that we at Agracel look at is the capacity utilization index. Capacity utilization refers to the amount of production output vs. the potential production output if all capacity was fully utilized. When businesses increase capacity output, there is the possibility of jobs being added, and eventually, if growth continues, additional capacity needed. Overall capacity utilization increased to 73.7% in April, and is up 5.4 percentage points from the low of 68.3% from last June. This is the fastest 10-month increase since 1983-84.
We are starting to see some of these things as our call volume has picked up quite a bit the past 3-4 months, and a couple of prospects have now become clients. We are excited about the future of manufacturing!