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Industrial capacity utilization rates, first quarter 2016

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Released: 2016-06-09

Industrial capacity use

81.4%

First quarter 2016

0.5 pts 

(quarterly change)

Canadian industries operated at 81.4% of their production capacity in the first quarter, up from 80.9% in the previous quarter.

The mining, quarrying, and oil and gas extraction industries were the main source of this increase.

Chart 1  Chart 1: Industrial capacity utilization rate is stable year over year
Industrial capacity utilization rate is stable year over year

Oil and gas extraction main source of gain

Oil and gas extraction was primarily responsible for the increase in the capacity utilization rate in the first quarter.

Following a decline in the previous quarter, the capacity utilization rate for oil and gas extraction rose 1.7 percentage points to 79.0% in the first quarter, due to higher volumes of oil and gas extraction.

As a result of increased production, capacity use in electric power generation, transmission and distribution was up for the first time in four quarters, rising from 80.9% to 82.5%.

The capacity utilization rate in forestry and logging fell from 91.7% to 88.0% in the first quarter, the third consecutive quarterly decline. The decrease was attributable to weakened activity in the industry.

Manufacturing increase mainly attributable to food and transportation equipment

Manufacturing as a whole operated at 83.2% of its capacity in the first quarter, edging up 0.2 percentage points from the previous quarter. Food manufacturing and transportation equipment manufacturing were the main sources of the increase.

In the first quarter, capacity utilization rates rose in 11 of the 21 major groups in the manufacturing sector, accounting for approximately 60% of the sector's gross domestic product.

Chart 2  Chart 2: Manufacturing capacity utilization up slightly
Manufacturing capacity utilization up slightly

Following a decline in the previous quarter, the capacity utilization rate of food manufacturing rose 1.7 percentage points from 80.9% to 82.6%. Increased production in most food manufacturing subsectors led to the gain.

The capacity utilization rate of transportation equipment manufacturing was up 1.5 percentage points in the first quarter to 94.8%, the fourth consecutive increase. A sharp rise in the production of motor vehicles and motor vehicle parts was the main reason for the growth.

The overall increase in the manufacturing sector was moderated by declines, notably in metal products manufacturing and machinery manufacturing.

The capacity utilization rate of the metal products manufacturing industry fell 3.4 percentage points to 77.2% in the first quarter. The decline was the result of decreased production in most of the industry's subsectors.

Capacity use in the machinery manufacturing industry (73.4%) declined for a fourth straight quarter. Lower production in most of the industry's subsectors led to the decrease in the first quarter.


  Note to readers

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

For most industries, the annual estimates are obtained from the Annual Survey of Manufacturing and Logging Industries, while 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.

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 industries.

With this release of industrial capacity utilization rates, data were revised back to the first quarter of 2014 to reflect the latest revisions to source data. Specifically, data for capacity utilization rates of manufacturing industries collected from the Annual Survey of Manufacturing and Logging Industries were incorporated.

Next release

Data on industrial capacity utilization rates for the second quarter will be released on September 8.

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Contact information

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