An Assessment of Capacity Utilization Statistics, Strengths and Weaknesses
CED-77-3, Oct 28, 1976
GAO investigated the adequacy of statistics on industrial capacity utilization provided by the Department of Commerce and the Federal Reserve Board. A determination of each preparer's capacity was made by reviewing sources of data, assumptions used, and methodologies employed.
Differences in utilization rates reported by seven organizations for 1970 through 1975 ranged from 10.2 to 22 percentage points. The variations in the rates are caused by differences in data collection, calculation methods, and definitions of capacity. All of the capacity utilization statistics have weaknesses. Statistics series are prepared by three Federal organizations, the Bureau of the Census, the Bureau of Economic Analysis, and the Federal Reserve Board. The need for these three series was questioned.
- Closed - implemented
- Closed - not implemented
Recommendation for Executive Action
Recommendation: A family of capacity definitions for use in calculating statistics should be developed. Federal organizations should be assigned the responsibility for developing a single reliable set of rates for use by Government and non-Government users.
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