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Industrial capacity utilization rates, second quarter 2016

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Released: 2016-09-08

Industrial capacity use

80.0%

Second quarter 2016

-1.4 pts 

(quarterly change)

Canadian industries operated at 80.0% of their production capacity in the second quarter, down from 81.4% in the previous quarter.

The decline in the industrial capacity utilization rate was widespread, with 19 of the 21 major groups in the manufacturing sector recording a lower rate. A decrease was also observed in every other non-manufacturing industry surveyed, except electric power generation, transmission and distribution.

Chart 1  Chart 1: The industrial capacity utilization rate falls in the second quarter, after a slight increase in the previous quarter
The industrial capacity utilization rate falls in the second quarter, after a slight increase in the previous quarter

Oil and gas extraction the main source of the overall decline

Oil and gas extraction was the main source of the decline in the capacity utilization rate in the second quarter, with its rate down 4.2 percentage points to 73.9%, after an increase the previous quarter. A decrease in the volume of oil extraction following the wildfire in Fort McMurray was the main reason for the decline.

The construction capacity utilization rate fell for the fifth time in six quarters, down from 83.8% in the first quarter to 83.5% in the second quarter. The decrease in the second quarter was attributable to a widespread decline in activity in this industry.

In the electric power generation, transmission and distribution industry, the capacity utilization rate rose from 82.8% to 84.7%, as a result of increased production. The industry's rate has risen for two consecutive quarters, following three quarters of decline.

Capacity utilization declines in most manufacturing industries

After three consecutive quarters of growth, the capacity utilization rate for manufacturing as a whole fell 1.2 percentage points to 82.2% in the second quarter.

Chart 2  Chart 2: Manufacturing capacity utilization declines after three quarters of growth
Manufacturing capacity utilization declines after three quarters of growth

The capacity utilization rate of fabricated metal products manufacturing continued to decline, falling 4.1 percentage points to 73.4% in the second quarter. This was the fifth decrease in six quarters. Lower production in most of the industry's subsectors accounted for the decline.

After four consecutive quarters of growth, the capacity utilization rate for transportation equipment manufacturing fell from 94.6% to 93.5% in the second quarter. A sharp decrease in motor vehicle and motor vehicle parts production was the main source of the decline.

The overall decrease in manufacturing was moderated by increases in primary metal manufacturing and, to a lesser extent, beverage manufacturing.

The capacity utilization rate in the primary metal manufacturing industry rose 3.1 percentage points to 78.2% in the second quarter, primarily as a result of increased production of non-ferrous metal.


  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 2015 to reflect the latest revisions to source data.

Next release

Data on industrial capacity utilization rates for the third quarter will be released on December 8.

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Contact information

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