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Canadian Industries Capacity Utilization Intensifies in 2010

Canadian industries operated at 76.4 percent of their production capacity in the fourth quarter of 2010, up slightly from 76.2 percent in the third quarter. This was the sixth consecutive quarterly increase in the rate, although the pace of growth slowed progressively during 2010. Overall capacity utilization rates for both manufacturing and non-manufacturing sectors recorded slight changes in the fourth quarter.

For 2010 as a whole, capacity use in Canadian industries intensified to 75.8 percent from 71.3 percent in 2009.

Canada's manufacturers operated at 76.7 percent capacity in the fourth quarter, virtually unchanged from 76.8 percent in the previous quarter, following five consecutive quarterly increases.

Utilization rates rose in 11 of the 21 major manufacturing industries in the fourth quarter. Among the industries that recorded an increase, the ones that contributed most were computer and electronic products, machinery, paper, clothing and fabricated metals. These were offset by declines in the transportation equipment, primary metals, food, chemicals and beverage industries.

Capacity use in the computer and electronic products industry rose from 87 percent in the third quarter to 97 percent in the fourth quarter, one of the highest rates ever for this industry. This increase was mainly the result of higher production of communications equipment.

Capacity use in machinery manufacturing reached 79.3 percent, up from 76.9 percent. This growth was due to increased production of construction, mining and oil and gas field machinery, as well as commercial and service industry machinery.

In the paper industry, capacity use rose from 85 percent to 87 percent, as a result of higher output from pulp mills and paperboard mills.

Among non-manufacturing industries, fourth-quarter utilization rates were either stable or underwent moderate change. Capacity use in the oil and gas extraction industry rose from 81.4 percent in the third quarter to 83.9 percent in the fourth quarter.

In the forestry and logging industry, the rate of capacity use declined from 92.9 percent to 91.6 percent in the fourth quarter. However, this was still one of the highest rates in the last five years.

The rate of capacity use in the mining sector, excluding oil and gas extraction, remained unchanged at 68.8 percent. Increased activity in metal ore and non-metallic mineral mining was offset by weakness in support activities.

Capacity utilization in the construction industry also stayed unchanged, its rate remaining at 73.2 percent. The decline in residential construction was offset by a pickup in engineering construction activity.

In the electric power generation, transmission and distribution industry, the utilization rate was nearly unchanged at 76.7 percent as production remained stable.

Full-Year 2010 Capacity Utilization
Canadian industries operated at 75.8 percent capacity in 2010, up from 71.3 percent in 2009. Despite this increase, the 2010 rate was still below the rate of 77.5 percent in 2008.

Among manufacturing industries, annual capacity use strengthened to 76.2 percent in 2010, from 70.9 percent in 2009 and 75.6 percent in 2008. However, the 2010 rate was lower than the 2007 rate of 82.8 percent.

Capacity use also increased strongly in 2010 in forestry and logging, mining, and in transportation equipment and non-metallic mineral products manufacturing.

Some industries declined moderately in their capacity use in 2010. These are electric power generation, transmission and distribution, and manufacturers in electrical equipment, appliances and components, printing and related support activities, beverage, food, and plastic products.

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