The 2020 Mid-Year Economic Update_long

Canadian Capacity Utilization Up to 82.7% in 2Q

Transportation equipment and chemical product industries were mainly responsible for the increase.

Canadian industries operated at 82.7 percent of their production capacity in the second quarter, up 0.6 percentage points from the first quarter and the fourth consecutive quarterly gain, according to the latest report from Statistics Canada. Manufacturing industries as a whole were the main source of this increase.

The manufacturing sector operated at 82 percent of its capacity in the second quarter, up 1 percentage point from the first quarter. After declining the previous quarter, the transportation equipment and chemical product industries were mainly responsible for this increase.

Declines in seven industries, particularly the primary metal industry (down 2.2 percentage points to 83.1 percent), moderated the growth in the manufacturing sector as a whole.

The capacity utilization rate in the transportation equipment manufacturing industry rose 3.9 percentage points to a record high 93.7 percent in the second quarter. This upturn was attributable to widespread gains in the production of all types of transportation equipment, except ships and boats.

Chemical product manufacturers' capacity use increased 2.5 percentage points to 76.7 percent in the second quarter. Higher output by pharmaceutical and medicine as well as basic chemical manufacturers was mostly responsible for the 3.7 percent production gain in the industry.

Following a particularly cold winter, demand for electricity declined in the second quarter. This resulted in a decrease in the electric power generation, transmission and distribution industry's capacity use, which fell 2.8 percentage points to 85.7 percent in the second quarter. This was the largest drop since the fourth quarter of 2011. This decline was more than offset by gains in the construction and mining and oil and gas extraction industries.

In the mining and quarrying industry, the rate rose 2.7 percentage points to 67.5 percent in the second quarter. The higher rate was due to increased activity in most of the industry's subsectors.

The capacity utilization rate in oil and gas extraction increased 0.2 percentage points to 88 percent in the second quarter, as a result of increased oil extraction.

Capacity use in the construction industry rose 0.6 percentage points to 84.1 percent, as production rose in all parts of the industry except non-residential building construction.

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