US DOL (Department of Labor) release productivity data every
quarter. Two reports are released:
- Productivity and cost: annual productivity change (in %). This change comes from two parts (a) real output index, and (b) labor input (labor hour*average wage).
- Preliminary multifactor productivity: this report is released annually.
These two reports include an overall productivity and the productivity by sector (farm, non-farm, manufacturing, mining, wholesale & retail....)
US Federal Reserve also releases monthly industrial production and capacity utilization data. In the last two decades, the overall industrial capacity utilization hovers between 75%-85%. When the capacity utilization drops below 75%, it indicates the industry has too much idle capacity. The causes of a low capacity utilization can be inactive demand, too much inventory, recession, or over expansion from previous years. Often layoff and factory shutdown will follow. When the capacity utilization rises above 85%, the supply starts to get tight. [Note that the demand is highly uncertain; hence, 15% of idle capacity means that some customer orders may take a long time to be fulfilled.] The cause of high capacity utilization comes from booming economy, demand surge, lack of labor, or capacity reduction from previous recession. Often time, a labor cost increase and inflation will follow if capacity utilization remains high for a long time.
Industrial Production and Capacity Utilization
US Federal Reserve also releases monthly industrial production and capacity utilization data. In the last two decades, the overall industrial capacity utilization hovers between 75%-85%. When the capacity utilization drops below 75%, it indicates the industry has too much idle capacity. The causes of a low capacity utilization can be inactive demand, too much inventory, recession, or over expansion from previous years. Often layoff and factory shutdown will follow. When the capacity utilization rises above 85%, the supply starts to get tight. [Note that the demand is highly uncertain; hence, 15% of idle capacity means that some customer orders may take a long time to be fulfilled.] The cause of high capacity utilization comes from booming economy, demand surge, lack of labor, or capacity reduction from previous recession. Often time, a labor cost increase and inflation will follow if capacity utilization remains high for a long time.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.