Capacity Utilization
a.k.a. Capacity utilisation
The share of an economy's factories, mines and utilities that is actually in use, compared with what…
In plain English
The share of an economy's factories, mines and utilities that is actually in use, compared with what could be used.
Capacity utilization asks: of everything the country could produce with its existing plants, how much is it producing? In the US the Fed releases it monthly with industrial production.
Very high readings can mean bottlenecks and upward pressure on prices, a possible inflation warning. Low readings point to slack and weak demand.
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