Therefore, high levels of capacity utilization were good predictors of resource tightness that was likely to translate into pricing pressure. Now, we hear, capacity in manufacturing is more technology intensive and can be adjusted more easily to reflect supply and demand conditions.
This relatively “elastic” supply of manufacturing capacity implies that capacity utilization may not become “tight” by historical standards, and capacity utilization is therefore a less certain early warning signal of potential pricing pressure. I have seen no proof of the assertion that the nature of manufacturing capacity has changed, although the experience of the last several years suggests that this might be so.