Jul 4, 2021 | Chamber News

There Is Still Plenty Of Room To Grow

by | Jul 4, 2021 | Chamber News | 0 comments

The economy has definitely open back at a faster rate than anyone ever expected despite the multiple distortions that currently exist in the market such as labor shortages, supply chain disruption , and other disruptions.

The next question to ask ourselves becomes “how far can the economy grow?”. There are several ways to answer this question and we think that one way is to look at the current output capacity and far the economy it from reaching its full potential.

The Capacity Utilization Index compiled and published by the Federal Reserve Bank of Saint Louis measures the full utilization of manufacturing, mining, and utility machinery and gives a estimate percentage as to where the economy fully using its existing resources. Based on this measure the US has plenty of room to grow given there is still capacity to build and manufacture goods.

There is also a strong argument that future infrastructure spending will translate on a even higher capacity to be utilized in the future and therefore adding more fuel to the economy. We are mindful it is pretty hard to predict the future, however it seems at this point there are data points supporting additional growth capacity.