The 2020 Mid-Year Economic Update_long

Canadian Capacity Utilization Down to 82.7 percent in 1Q

Manufacturing, mining and quarrying were main sources of the decrease.

Canadian industries operated at 82.7 percent of their production capacity in the first quarter, down from 83.5 percent in the previous quarter. It was the largest decline since the second quarter of 2009.

Manufacturing as well as mining and quarrying were mainly responsible for the decline. Specifically, decreases in capacity utilization in durable goods manufacturing, mining and quarrying as well as construction more than offset increases in non-durable goods manufacturing, electric power generation, transmission and distribution, forestry and logging as well as oil and gas extraction.

Manufacturing industries operated at 82.9 percent of their capacity in the first quarter, down 0.8 percentage points from the previous quarter. Durable goods manufacturing was the main source of this decline.

The capacity utilization rate decreased in 12 of the 21 major manufacturing groups, which account for approximately 70 percent of the manufacturing sector's gross domestic product.

In the transportation equipment manufacturing industry, the capacity utilization rate fell for the first time in a year, down 3.4 percentage points to 90.7 percent in the first quarter. Lower production of motor vehicles and motor vehicle parts was the main reason for the decline.

The capacity utilization rate for fabricated metal product producers decreased from 80 percent in the fourth quarter to 76.2 percent in the first quarter, reflecting lower production in most industry subsectors.

Primary metal manufacturers' capacity use decreased 4.2 percentage points to 75.6 percent in the first quarter. An overall decline in production in every primary metal manufacturing subsector was the source of the decrease.

In contrast, every non-durable goods manufacturing industry increased its capacity utilization rate, which partly offset the decrease in the rate for the durable goods manufacturing subsector.

Production was up in most chemical product manufacturing subsectors, resulting in the industry's capacity utilization rate rising 3.6 percentage points to 83.6 percent.

The food manufacturing industry increased its capacity utilization rate from 79.8 percent in the fourth quarter to 80.9 percent in the first quarter. Production in most of the industry's subsectors was up, which more than offset the decline in meat product manufacturing and animal food manufacturing.

A significant decline in support activities for mining and oil and gas extraction resulted in the capacity utilization rate for mining and quarrying falling 5.8 percentage points in the first quarter to 60.9 percent. This was the largest decrease since the third quarter of 2009.

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