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Canadian Capacity Utilization Rates Up in 4Q

Canadian industries operated at 86 percent of their production capacity in the fourth quarter, up from 85.1 percent the previous quarter, according to Statistics Canada. This was the sixth consecutive quarterly increase. The mining, quarrying, and oil and gas extraction sector and the construction sector were the main sources of the increase.

Construction and oil and gas extraction were the main contributors to the overall increase in the capacity utilization rate in the fourth quarter.

The capacity utilization rate in construction rose for a sixth consecutive quarter, up from 89.5 percent in the third quarter to 91 percent in the fourth quarter. This gain was attributable to an overall increase in construction activity.

After a pause in the previous quarter, the capacity utilization rate in oil and gas extraction rose by 1.5 percentage points to 83 percent, because of an increase in the volume of oil extraction.

In forestry and logging, the capacity utilization rate rose from 83.9 percent to 84.5 percent in the fourth quarter, the first gain following four consecutive quarters of decline. This increase was attributable to increased activity in the industry.

After a pause in the previous quarter, the capacity utilization rate for manufacturing edged up 0.7 percentage points to 86.1 percent in the fourth quarter, the highest level since the fourth quarter of 2000. Durable goods manufacturing industries were the main contributors to this increase.

Among transportation equipment manufacturers, the capacity utilization rate was 83.6 percent, up from 81.9 percent in the previous quarter. Motor vehicle manufacturing and motor vehicle parts manufacturing, as well as aerospace product and parts manufacturing, were the main contributors to the increase. Motor vehicle production recovered after a weak third quarter, which saw longer than usual maintenance shutdowns in assembly plants and changes to vehicle models being manufactured in Canada.

Capacity utilization rates in the primary metal manufacturing industry increased for the third consecutive quarter, up 2.6 percentage points to 82.7 percent. An overall rise in production in the industry's subsectors led to this increase.

After declining by 1 percentage points in the second quarter, the capacity utilization rate in the wood product manufacturing industry posted its fifth increase in six quarters, rising from 90.3 percent in the third quarter to 94.5 percent in the fourth quarter. This rise was attributable to an overall increase in production.

The overall increase in the manufacturing sector was partly offset by decreases, particularly in the chemical manufacturing industry.

Among chemical manufacturers, industrial capacity utilization decreased for the second time in four quarters, falling from 91.5 percent to 88.1 percent. Production dropped in the majority of the subsectors of this industry.

The average capacity utilization rate of Canadian industries rose by 4.4 percentage points to 84.6 percent in 2017, after edging down 0.3 percentage points in 2016. The rise was mainly attributable to the rebound in the oil and gas extraction subsector.

With the exception of forestry and logging, the annual average capacity utilization rate in non-manufacturing industries increased in 2017.

In 2017, the annual average capacity utilization rate for manufacturing bounced back to 85.2 percent, after edging down 0.2 percentage points in 2016. The capacity utilization rate rose in 18 of the 21 major manufacturing groups.

 

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