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Industrial capacity utilization rates, third quarter 2021

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Released: 2021-12-10

Industrial capacity use

81.4%

Third quarter 2021

-0.6 pts decrease

(quarterly change)

Canadian industries operated at 81.4% of their production capacity in the third quarter of 2021, down from 82.0% in the second quarter. This was the first quarterly decrease after four consecutive quarterly increases.

The decline in the third quarter was mainly because of declines in the construction and the manufacturing sector, particularly transportation equipment manufacturing.

A decrease in the construction sector

Chart 1  Chart 1: Industrial capacity utilization in non-manufacturing industries
Industrial capacity utilization in non-manufacturing industries

In the construction sector, capacity utilization dropped to 90.1% in the third quarter, after posting four consecutive quarterly increases. Capacity utilization fell 4.0 percentage points. The capacity utilization rate is slightly higher than the level in the fourth quarter of 2020 (89.9%). Residential construction recorded a large drop in activity levels (-8.4%), contributing to the decline in this sector. Following four consecutive quarters of strong growth, investment in new construction and renovations was down in the third quarter. According to the Labour Force Survey, employment levels for construction fell from 1.44 million to 1.42 million during the quarter.

In forestry and logging, capacity utilization fell 7.1 percentage points to 80.0% in the third quarter. The forest fires in British Columbia during the quarter contributed to the decrease in activity levels (-8.5%) in this subsector.

In oil and gas extraction, the capacity utilization rate rose from 77.1% in the second quarter of 2021 to 80.7% in the third quarter of 2021. This increase followed the overall growth in production supported by the steady rise in prices. Exports of energy products rose sharply (+20.4%) during the quarter.

Capacity utilization in mining and quarrying (excluding oil and gas extraction) rose 4.9 percentage points to 84.9% in the third quarter. This increase was mainly driven by higher levels of activity in the metal ore and the support activities for mining and oil and gas extraction subsectors, with all types of services posting gains.

The semiconductor chip shortage contributed to the decline in the capacity utilization rate in the manufacturing sector

Year over year, the capacity utilization rate in the manufacturing sector edged down 0.1 percentage points to 75.1% in the third quarter of 2021. Capacity utilization declined year over year in 4 of the 21 major manufacturing industrial groups, representing approximately 25% of gross domestic product in the manufacturing sector.

Chart 2  Chart 2: Year-over-year change by industry, third quarter 2021 compared with third quarter 2020
Year-over-year change by industry, third quarter 2021 compared with third quarter 2020 

Year over year, transportation equipment manufacturers saw their capacity utilization rate fall 17.9 percentage points to 62.0%. The industry continued to be heavily affected by the shortage of semiconductor chips. Moreover, gross domestic product of motor vehicle manufacturing fell 10.8%.

In addition, the capacity utilization rate of wood product manufacturers fell 2.0 percentage points year over year to 80.5%. This decline coincided with the decrease in residential construction activities. Exports of forestry products and building and packaging materials decreased (-14.0%) during the quarter.

Offsetting the decrease in manufacturing, the capacity utilization rate of petroleum and coal manufacturers rose 9.4 percentage points year over year to 86.0% in the third quarter of 2021. Domestic consumption of refined petroleum products was up, contributing to increased refinery activity (+3.7%). A gradual increase in travel activities contributed to the rise in demand for transportation fuels.


  Note to readers

The industrial capacity utilization rate is the ratio of an industry's actual output to its estimated potential output.

This program covers all manufacturing industries, as well as forestry and logging; mining, quarrying, and oil and gas extraction; electric power generation; transmission and distribution; and construction.

For non-manufacturing industries, the quarterly pattern is derived from the output-to-capital ratio series, the output being the real gross domestic product at basic prices, seasonally adjusted, by industry.

For this release on industrial capacity utilization rates, the data were revised back to the first quarter of 2017 to reflect the latest revisions to the source data. For manufacturing industries, the data are not seasonally adjusted, as the new survey source (Monthly survey of manufacturing) does not have a long enough time period to perform a seasonal adjustment.

Next release

Data on industrial capacity utilization rates for the fourth quarter of 2021 will be released on March 11, 2022.

Products

The data visualization product "Overview of the industrial capacity utilization rate: Interactive tool," which is part of the Statistics Canada — Data Visualization Products series (Catalogue number71-607-X), is now available.

The Economic Accounts Statistics Portal, accessible from the Subjects module of the Statistics Canada website, features an up-to-date portrait of national and provincial economies and their structure.

The Latest Developments in the Canadian Economic Accounts (Catalogue number13-605-X) is available.

The User Guide: Canadian System of Macroeconomic Accounts (Catalogue number13-606-G) is available.

The Methodological Guide: Canadian System of Macroeconomic Accounts (Catalogue number13-607-X) is available.

Contact information

For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; infostats@statcan.gc.ca) or Media Relations (statcan.mediahotline-ligneinfomedias.statcan@statcan.gc.ca).

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