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Re: PKT Seminar: Capacity Utilisation

The question is, how is utilisation measured?  In NZ
our main surveyor asks the question "By how much
are you able to increase current production without
increasing unit costs?"  and firms answer in
categories 0%, 1-5%, 6-10%, etc.  The resulting series
looks reasonably stationary, exhibits cycles that
match intuitive demand cycles, and seems to work
well as an indicator of demand pressure and the
margins component in prices.

Tim Ng
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