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Industrial capacity utilization rates, third quarter 2018

Released: 2018-12-12

Industrial capacity use

82.6%

Third quarter 2018

-1.5 pts decrease

(quarterly change)

Canadian industries operated at 82.6% of their production capacity in the third quarter, down from 84.1% in the previous quarter. The decline came in the wake of five consecutive quarterly increases.

The decrease in the third quarter was mainly attributed to declines in the manufacturing industries.

Drop in capacity utilization in the manufacturing sector

The capacity utilization rate of the manufacturing sector fell 2.9 percentage points to 78.8% in the third quarter. Year over year, the rate was down 1.5 percentage points. The decrease coincided with a decline in output.

Year over year, capacity utilization decreased in 16 of the 21 major manufacturing groups, accounting for approximately 70% of the manufacturing sector's gross domestic product.

Chart 1  Chart 1: Year-over-year change by industry (third quarter 2018 compared with third quarter 2017)
Year-over-year change by industry (third quarter 2018 compared with third quarter 2017)

The decrease in capacity utilization among chemical product manufacturers accelerated in the third quarter. After falling 0.5 percentage points in the first quarter and 0.7 percentage points in the second quarter, the capacity utilization rate in this industry fell 10.0 percentage points to 75.6% in the third quarter. This represents a year-over-year decrease of 8.9 percentage points. This decline was mostly due to lower production of pesticides, fertilizers and other agricultural chemical products, which saw a strong increase in the previous quarter.

Year over year, the capacity utilization rate of the transportation equipment manufacturing industry was down 2.0 percentage points to 80.5% in the third quarter. This drop was driven by decreased production of motor vehicles and motor vehicle parts, due to shutdowns of certain plants in the summer.

Among food manufacturers, the capacity utilization rate fell 4.1 percentage points to 81.8% in the third quarter, on account of decreased production of most foods. Year over year, the rate rose 0.4 percentage points.

The overall decline in the manufacturing sector was partially offset by increases in the petroleum and coal product manufacturing industry. Following a decrease of 13.7 percentage points in the previous quarter, the capacity utilization rate of the petroleum and coal product manufacturing industry rose 11.8 percentage points to 89.1% in the third quarter, due to a gradual resumption of production following temporary shutdowns and maintenance work at several refineries in the spring. Year over year, the rate fell 2.0 percentage points.

Capacity utilization in construction declines

After seven consecutive quarterly increases, capacity utilization in construction fell 2.0 percentage points to 88.3% in the third quarter. Decreased activity in all construction subsectors led to this decline.

The capacity utilization rate of oil and gas extraction posted its first decrease in six quarters, falling from 85.4% in the second quarter to 84.2% in the third quarter. This was led by a decrease in non-conventional oil production, impacted by a large drop in prices for Canadian heavy crude oil.

Conversely, capacity utilization in mining—excluding oil and gas extraction—and quarrying rose 3.4 percentage points to 79.1%, after falling 1.6 percentage points in the previous quarter. The resumption of iron ore mining after previous work interruptions contributed to this increase.


  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 industries.

With this release of the industrial capacity utilization rates, the data have been revised back to the first quarter of 2015 to reflect the latest revisions to the source data. In particular, for manufacturing industries, the estimates are from the Monthly Survey of Manufacturing beginning with the January 2017 reference month. The data are not seasonally adjusted. 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.

Next release

Data on industrial capacity utilization rates for the fourth quarter of 2018 will be released on March 8, 2019.

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.

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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