Sometimes referred to as “operating rate,” the Capacity Utilization Rate refers to the amount of production capacity that an entity uses. This basic economic concept assumes that entities, like companies, industries or even countries, can operate at a certain production level. The percentage of that total production level they actually reach is quantified into the Capacity Utilization Rate, expressed as a percentage. Factors affecting an entity’s Capacity Utilization Rate include equipment problems, reduced work force and availability of goods.

Investors, politicians and business leaders rely upon a different Capacity Utilization Rate that is specific to their interests. Government leaders watch the United States’ capacity utilization to assess overall growth in the economy. Investors and business leaders depend upon the capacity utilization rates of selected companies to determine their financial solvency. Research this key economic indicator to assess the strength of the market your company or organization depends on:

1. Find the official sources for the Capacity Utilization Rate.

2. Get expert Capacity Utilization Rate advice from professionals.

3. Engage in your own Capacity Utilization Rate training.

Action Steps
The best contacts and resources to help you get it done

Get the most accurate and timely Capacity Utilization Rate information based on your needs

Making informed decisions to guide your company's production requires up to date economics data from trustworthy sources.

I recommend: The United States’ central bank, the Federal Reserve, publishes statistical releases tabulating industrial production and capacity utilization. The data is broken down by month and compares recent estimates to previous ones. The United States Department of Commerce Economics and Statistics Administration publishes key reports concerning many aspects of capacity utilization that industries in the country report. Locate official statistics on Capacity Utilization Rates for Natural Gas Providers on the U.S. Department of Energy website.

Engage the services of an economic consultant for reliable Capacity Utilization Rate advice

You don't have to be an economics expert to use the Capacity Utilization Rate in making your business decisions. Most politicians and business leaders admit to relying upon expert advice for help with Capacity Utilization Rate.

I recommend: Massachusetts-based ICLUBcentral has provided investment advice since 1989. The Investor Advisory Group in Charlotte, North Carolina has advised clients about key economic indicators since 1987. Contact a Capacity Utilization Rate consultant at either company to learn how these rates in any industry can affect your business operations.

Invest your time wisely by educating yourself on the Capacity Utilization Rate

With some directed research and practice, you can acquire the same level of understanding this concept that economics experts have.

I recommend: The Charles Schwab Corporation has an online guide to key economic indicators and they present a thorough analysis of the Capacity Utilization Rate and how it impacts the market. Schwab has been a major investment advisory company since the 1960’s. Investopedia takes you step by step through the calculation process for the Capacity Utilization Rate.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  As you research the Capacity Utilization Rate across industries, remember that high rates usually signal inflation and may prompt the Federal Reserve to raise interest rates.