If true, this relatively “elastic” supply of manufacturing capacity would imply that capacity utilization may not become “tight” by historical standards and our measure of capacity utilization would therefore be 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 it has. A third related issue has to do with the average workweek and labor force participation. During this episode of strong growth, the average workweek has not increased significantly.