Journal Article

Capacity utilization as a real-time predictor of manufacturing output

Abstract: In this article, Evan F. Koenig demonstrates that the Federal Reserve Board's initial estimate of manufacturing capacity utilization is helpful in predicting subsequent growth in manufacturing output. Together with lagged real-time output growth and growth in the composite index of leading indicators, capacity utilization explains more than 50 percent of the variation in output growth at a four-quarter horizon. Based on data available at the beginning of the year, the forecasting equation predicts little or no growth in manufacturing output during 1996.

Keywords: Industrial capacity; Manufactures;

Bibliographic Information

Provider: Federal Reserve Bank of Dallas

Part of Series: Economic and Financial Policy Review

Publication Date: 1996

Issue: Q III

Pages: 16-23