Maintenance Mindset: From metrics to maintenance—Decoding economic signals to improve reliability
Drastic trade talks haven’t cooled, but maybe they are simmering somewhat, as it seems that President Trump approaches trade policy more like a business negotiation, full of bravado and performance, rather than as an exercise in political diplomacy.
Lately, Trump has walked back many of the enormous tariffs he threatened. Sometimes it is hard to know what’s real and what’s bluster. During his first term, Salena Zito, a reporter from The Atlantic, outlined a notion that is now widely practiced by many from the media to other global leaders to your next door neighbors: Take Trump Seriously, Not Literally.
While industry may never see Trump’s exaggerated tariffs, the back and forth still creates uncertainty that the markets don’t like, and so I continue my deep dive into important manufacturing metrics that give us a glimpse into how industry is performing and how manufacturing is affected by the overall economy.
This month, I’ll look more closely at the manufacturing capacity utilization rate and what that might mean for maintenance and reliability teams, a quick highlight of some of the important numbers, and a look at specific industries that are breaking the averages for wins and losses.
⇩Federal Reserve manufacturing capacity utilization rate
In April 2025, the capacity utilization rate dropped slightly from March to 77.7%, as U.S. manufacturing continues to operate below the long-term average. For context, the average rate is 78.5%, with data tracking back to 1972. The manufacturing capacity utilization rate has dropped to the 60s, which happened in 2020 during peak pandemic shutdowns and during the 2008-2009 Great Recession; capacity utilization also has risen into the low 80s during boom periods (the mid to late 1990s tech-sector growth, pre-dot-com bubble).
Looking for more historical economic data? Check out FRED, short for Federal Reserve Economic Data, which is an online database of economic data over time. FRED was created and is maintained by the research department at the Federal Reserve Bank of St. Louis.
What maintenance and reliability teams can take away from a continued low-capacity utilization rate?
You might assume that operating at a lower intensity would mean machines are under less strain across the board, and it could provide windows of opportunity for preventive maintenance, deferred repairs, or upgrades or retrofits. However, underutilization of certain equipment can also introduce degradation issues, such as corrosion from a dry seal or a lubrication breakdown on idle assets. Start and stop cycles during intermittent use also might increase wear on certain equipment. It’s a good reason to maintain planned maintenance routines on both used and underused lines, and fully idle assets might benefit from additional condition-based monitoring.
Overall, lower utilization typically means tighter operating budgets and reduced capital spending. M&R teams can validate their work by promoting big reliability saves to the company as a whole. My podcast co-host, retired plant manager and industry consultant Joe Kuhn, always says: no one knows about the failures that didn’t happen because of good reliability practices.
In addition to promoting how much reliability has saved the business, M&R teams can prioritize high-ROI projects, make sure they have properly leveraged any condition-based and predictive maintenance tools, based on staff numbers and planned maintenance schedules. Another tip from Joe: make sure you’re not overlapping on condition-based monitoring and PMs on the same asset. You don’t need both.
Low utilization could be a good time to shift equipment from reactive to proactive modes, revalidate your failure modes and maintenance intervals, or identify underperforming assets, given that you don’t have a log PM backlog. In that case, of course, use that time to get caught up.
Quick highlights: other important manufacturing metrics
⇩ Federal Reserve industrial production index: total production, covering manufacturing, mining and electric and gas utilities, decreased by 0.1% overall in April with utilities up slightly and manufacturing and mining slightly down. Manufacturing declined by 0.4% after a 0.4% increase in March. Manufacturing output, excluding motor vehicles and parts, decreased by 0.3%, and the decline in manufacturing output was partially offset by growth in utilities output.
⇩ Institute for Supply Management (ISM) manufacturing purchasing managers’ index (PMI): 48.5 (down from 48.7 in April), indicating continued contraction in the manufacturing sector in May.
⇩ U.S. Census Bureau new orders manufactured durable goods, shipments and inventories: in April new orders for manufacturing durable goods decreased $19.9 billion or 6.3% to $296.3 billion, following four consecutive monthly increases, including a 7.6% March increase.
⇩ U.S. Census Bureau new orders for total manufacturing, including non-durable goods: in April new orders decreased $22.8 billion or 3.7% to $594.6 billion, following a 3.4% March increase.
⇧ U.S. Census Bureau manufacturing and trade inventories and sales: combined trade sales and manufacturer’s shipment for March, was estimated at $1,919.9 billion, up 0.7% from February and up 4.5% from March 2024. (Note: this data takes the longest to release, about six weeks after the closing of each month.)
If you’re need a refresher on exactly what each metric indicates, who collects it and how often, read this first manufacturing metrics article.
Data spotlight: industry winners and losers
Non-defense aerospace and defense new orders have surged in recent months, according to U.S. Census reports. In March 2025, durable goods orders surged by 9.2%, primarily due to a 139% increase in commercial aircraft orders, including 192 aircraft orders from Boeing. Many airlines have equipment backlogs from COVID and travel has largely recovered from the pandemic and surged recently.
Electrification is driving demand for electrical equipment and appliances, and consistent growth in new orders and shipments. Some of this demand is driven by government incentives for electric vehicles, grid modernization, and reshoring of electronics manufacturing. The U.S. Census Bureau data on manufacturers’ orders and shipments reported a 1.3% increase for new order on electrical equipment in April 2025 and shipments decreased by 1.5%.
This up and down with orders and shipments makes some sense within the context of the Trump tariff uncertainty. If tariffs are expected to rise, distributors or OEMs might rush to place orders before costs go up, leading to temporary spikes in new orders. The Inflation Reduction Act has also worked to boost demand for U.S-made electrical equipment.
New orders also indicate future production, while shipments represent recent past production, so tariff uncertainty or potential higher import tariffs on electrical components could lead to further decreased shipments. Many manufacturers rely on imported subcomponents (such as semiconductors, circuit boards, wiring, etc.), and tariffs on these inputs could raise production costs, potentially slowing output and shipments even further.
Electrical equipment is one to watch. It can be especially vulnerable to trade policy, as it relies heavily on global supply chains and electrical products are sensitive to material costs (steel, copper, aluminum).
The ISM PMI for May also reported growth in seven manufacturing industries overall: plastics and rubber products; petroleum and coal products; furniture and related products; electrical equipment, appliances and components; fabricated metal products; and machinery.
And some industries are struggling more than others, like chemicals, which has seen a decline in new orders (chemical industries are largely represented by non-durable goods). Exports have also seen declines. Textiles and apparel have also seen ongoing contraction in shipments and orders, by Census and ISM sub-sector data. Weak retail apparel sales are driven by soft consumer demand and competition from imports.
The May 2025 ISM Report indicates that textile mills reported customers’ inventories as too high. Of 18 manufacturing industries, the six industries reporting higher inventories in May, in order, are: furniture and related products; plastics and rubber products; textile mills; primary metals; computer and electronic products; and machinery.
Leading vs. lagging indicators
Aside from the ISM PMI, which is generally considered forward looking, and its sentiments provide early insight into economic trends, based on recent executive opinions, most of the government data are more lagging indicators. The most lagging data is that on manufacturing and trade inventories from the U.S. Census Bureau. Data from March only became available in mid-May, whereas many other data sets are reported within one month or less of collection. While it’s still trailing data, it is going somewhere and context matters. Let’s follow the trajectory.
