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Industrial capacity utilization rates, fourth quarter 2017

Released: 2018-03-09

Industrial capacity use

86.0%

Fourth quarter 2017

0.9 pts increase

(quarterly change)

Canadian industries operated at 86.0% of their production capacity in the fourth quarter, up from 85.1% the previous quarter. This was the sixth consecutive quarterly increase.

The mining, quarrying, and oil and gas extraction sector and the construction sector were the main sources of the increase.

Chart 1  Chart 1: The industrial capacity utilization rate continued to climb
The industrial capacity utilization rate continued to climb

Construction and oil and gas extraction are the main contributors to the increase

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

The capacity utilization rate in construction rose for a sixth consecutive quarter, up from 89.5% in the third quarter to 91.0% in the fourth quarter. This gain was attributable to an overall increase in construction activity.

After a pause in the previous quarter, the capacity utilization rate in oil and gas extraction rose by 1.5 percentage points to 83.0%, because of an increase in the volume of oil extraction.

In forestry and logging, the capacity utilization rate rose from 83.9% to 84.5% in the fourth quarter, the first gain following four consecutive quarters of decline. This increase was attributable to increased activity in the industry.

Capacity utilization for manufacturing rises due to durable goods

After a pause in the previous quarter, the capacity utilization rate for manufacturing edged up 0.7 percentage points to 86.1% in the fourth quarter, the highest level since the fourth quarter of 2000. Durable goods manufacturing industries were the main contributors to this increase.

Chart 2  Chart 2: Capacity utilization in manufacturing sector bounced back
Capacity utilization in manufacturing sector bounced back

Among transportation equipment manufacturers, the capacity utilization rate was 83.6%, up from 81.9% in the previous quarter. Motor vehicle manufacturing and motor vehicle parts manufacturing, as well as aerospace product and parts manufacturing, were the main contributors to the increase. Motor vehicle production recovered after a weak third quarter, which saw longer than usual maintenance shutdowns in assembly plants and changes to vehicle models being manufactured in Canada.

Capacity utilization rates in the primary metal manufacturing industry increased for the third consecutive quarter, up 2.6 percentage points to 82.7%. An overall rise in production in the industry's subsectors led to this increase.

After declining by 1.0 percentage points in the second quarter, the capacity utilization rate in the wood product manufacturing industry posted its fifth increase in six quarters, rising from 90.3% in the third quarter to 94.5% in the fourth quarter. This rise was attributable to an overall increase in production.

The overall increase in the manufacturing sector was partly offset by decreases, particularly in the chemical manufacturing industry.

Among chemical manufacturers, industrial capacity utilization decreased for the second time in four quarters, falling from 91.5% to 88.1%. Production dropped in the majority of the subsectors of this industry.

Annual average capacity utilization increases in 2017

The average capacity utilization rate of Canadian industries rose by 4.4 percentage points to 84.6% in 2017, after edging down 0.3 percentage points in 2016. The rise was mainly attributable to the rebound in the oil and gas extraction subsector.

With the exception of forestry and logging, the annual average capacity utilization rate in non-manufacturing industries increased in 2017.

In 2017, the annual average capacity utilization rate for manufacturing bounced back to 85.2%, after edging down 0.2 percentage points in 2016. The capacity utilization rate rose in 18 of the 21 major manufacturing groups.



  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, the data were revised back to the first quarter of 2017 to reflect the latest revisions to the source data.

Next release

Data on industrial capacity utilization rates for the first quarter will be released on June 8.

Products

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.

The System of Macroeconomic Accounts module features an up-to-date portrait of national and provincial economies and their structure.

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; STATCAN.infostats-infostats.STATCAN@canada.ca) or Media Relations (613-951-4636; STATCAN.mediahotline-ligneinfomedias.STATCAN@canada.ca).

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