This paper quantifies the rate of capacity utilisation in twenty-three selected industries of Pakistan for the period, 1971-76. Variation in the number of shifts worked and in intensity of operations of machinery among the industries is also determined. The impact of factors operating from the demand and from the supply side respectively is analysed by use of econometric techniques and by studying industrial managers/owners own perceptions of constraints to full utilisation of available capacity. The basic conclusions are that in the ’70s approximately half the capacity was lying idle in the sample industries and that supply related factors are primarily responsible for creating this excess capacity.
