As the ifo survey is part of the harmonized survey program from the European Commission, the data is directly comparable to measures of capacity utilization for other countries within Europe.8 The most prominent capacity utilization series for the US is also based on a firm survey, the Census Survey on Plant Capacity Utilization, and is provided by the Federal Reserve Board (FRB). [...] The Census Survey on Plant Capacity Utilization which forms the basis of the capacity utilization for the US provides a respective definition of capacity to the firms. [...] Figure E.1 in the Appendix compares the cyclical dynamics of the fraction of firms reporting excess demand and the log of an index of new orders in the manufacturing sector as published by the German Federal Statistical Office (DESTATIS). [...] The correlation between capacity utilization and the ifo index is 0.67, the correlation between the fraction of firms reporting material constraints and the index is 0.66 (Figure E.2 show the corresponding graph). [...] The share of the between-variation fluctuates and therefore explains part of the fluctuations of the aggregate material constraints that we document above.
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