Reported by the Federal Reserve Board, is the rate of the usage of available resources among factories.
the Capacity Utilization Rate is a measure of the industrial output, compared against industrial capacity. A rate nearing 90% is considered to be nearly full capacity and can cause inflation, while a rate close to 70% can be recessionary.
A term used by the Federal Reserve to describe the output of factories, industries and the entire economy. When factories are operating near 85 percent of capacity, they are said to be operating at “full capacity.” Any higher levels are assumed to create higher inflation.
the ratio of actual production levels to maximum possible production levels, expressed as a percentage. The Federal Reserve Board publishes capacity utilization figures monthly for both the overall economy and individual industries.
The capacity utilization rate measures the percent of industrial output currently in use. A change in the rate indicates a change in the direction of economic activity. As the percentage rate moves closer to 90% the industrial output is practically at full capacity and is inflationary. A number closer to 70% is recessionary. A higher percent- age indicates a stronger manufacturing sector and an expanding economy which can be inflationary. Bond Market Moves Down in Price.
the relationship between output and capacity. High utilization rates are considered inflationary by some economists.
The Federal Reserve's estimate of the percentage of factory capacity that is being used. Published monthly, capacity utilization rarely exceeds 90% because production costs become too expensive after that point. A high rate of capacity utilization — over 85% — suggests inflation is on its way.
Capacity utilization is a concept in Economics which refers to the extent to which an enterprise or a nation actually uses its installed productive capacity. Thus, it refers to the relationship between actual output produced and potential output that could be produced with installed equipment, if capacity was fully used.
Capacity Utilization measures the rate at which a firm makes use of their capital productive capacities, such as factories and machinery. Capacity Utilization generally rises when the economy is healthy and falls when demand softens. As such, it is useful as an economic trend indicator, reflecting overall growth and demand.