The 2020 Mid-Year Economic Update_long

Canadian Capacity Utilization Rates Down in 4Q

The capacity utilization rate decreased in 12 of the 21 major groups in the manufacturing sector.

Canadian industries decreased their production capacity by 0.5 percentage points in the fourth quarter to 81.1, according to Statistics Canada.

The construction as well as mining, quarrying, and oil and gas extraction industries were the main sources of the decline.

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

The construction capacity utilization rate declined from 84.7 percent to 83.7 percent, the fourth consecutive quarterly decrease. The decrease was attributable to lower activity in most industry subsectors.

After rising sharply in the previous quarter, the capacity utilization rate for oil and gas extraction fell 1.1 percentage points to 78.3 percent in the fourth quarter, as a result of a decrease in oil and gas extraction volumes.

The capacity utilization of the electric power generation, transmission and distribution industry decreased from 81.3 percent to 80.3 percent as a result of decreased production. This was the third straight quarterly decline.

Manufacturing as a whole operated at 83.3 percent of its capacity in the fourth quarter, edging down 0.1 percentage points from the previous quarter. Non-durable manufacturing was the main contributor to the decrease.

In the fourth quarter, the capacity utilization rate was down in 12 of the 21 major groups in the manufacturing sector, which represented approximately 60 percent of the sector's gross domestic product.

After rising sharply in the previous quarter, the food manufacturing industry's capacity utilization rate fell 1.4 percentage points to 80.9 percent. Lower production of meats, preserved fruits and vegetables and specialty food were the main reason for the decline.

The capacity utilization rate for plastics and rubber product manufacturers declined 2.8 percentage points to 84.9 percent in the fourth quarter. The decrease followed two consecutive quarters of increases. An overall decline in production was behind the drop.

The decline in the manufacturing sector as a whole was moderated by increases, particularly in durable goods manufacturing industries.

The capacity utilization rate for the primary metal industry rose 2.4 percentage points to 75 percent in the fourth quarter.

This was the second straight quarterly increase after five consecutive quarterly declines. The increase in the fourth quarter was mainly the result of higher production in most of the industry's subsectors.

The average capacity utilization rate of Canadian industries fell 1 percentage points to 81.3 percent in 2015, after rising 1.5 percentage points in 2014.

The annual average capacity utilization rate of non-manufacturing industries decreased in 2015, which more than offset the increase posted by manufacturing industries.

The annual average capacity utilization rate of manufacturing industries rose for the second year in a row, up 1.1 percentage points to 83 percent in 2015. The capacity utilization rate was up in 13 of the 21 major groups in the manufacturing sector.

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