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Industrial capacity utilization rates, second quarter 2019

Released: 2019-09-11

Industrial capacity use

83.3%

Second quarter 2019

2.2 pts increase

(quarterly change)

Canadian industries operated at 83.3% of their production capacity in the second quarter, up from 81.1% in the previous quarter. This was the highest capacity utilization rate since the second quarter of 2018.

The mining, quarrying and oil and gas extraction sector was the main source of this increase. Higher capacity utilization in mining and quarrying, oil and gas extraction, manufacturing, and forestry and logging more than offset decreases in electric power generation, transmission and distribution.

Capacity utilization in the mining, quarrying and oil and gas extraction sector rebounds

Following declines in the two previous quarters, the capacity utilization rate in the mining and quarrying and oil and gas extraction industries rose 4.9 percentage points to 84.8% in the second quarter, equalling the highest capacity utilization rate recorded since the second quarter of 2006.

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

Capacity utilization in oil and gas extraction rose from 82.2% in the first quarter to 87.3% in the second quarter. This gain was driven by increased production of oil sands extraction in Alberta and coincided with the continued easing of temporary restrictions on production imposed by the provincial government in January. This was the highest capacity utilization rate recorded for oil and gas extraction since the second quarter of 1999. In the second quarter, there was a rebound in gross domestic product for oil and gas extraction (+6.7%) in conjunction with a relatively stable capital stock.

Capacity utilization in mining and quarrying (excluding oil and gas extraction) rose 4.5 percentage points to 79.5% in the second quarter. Increases in support activities for mining and quarrying and oil and gas extraction, as well as in iron ore extraction and copper, nickel, lead and zinc ore extraction, were observed.

Capacity utilization in construction edged up 0.4 percentage points to 86.0% in the second quarter, the second consecutive quarterly increase.

Conversely, capacity utilization in electric power generation, transmission and distribution fell 1.5 percentage points to 84.6% in the second quarter, following three consecutive quarterly increases. This decrease reflected a return to normal levels after an unusually cold winter.

Manufacturing capacity utilization declines year over year

Year over year, the manufacturing capacity utilization rate fell 1.4 percentage points. The capacity utilization rate was down year over year in 14 of the 21 major manufacturing groups, representing approximately three-quarters of the gross domestic product in the manufacturing sector. The manufacturing capacity utilization rate was 80.3% in the second quarter, the highest rate since the second quarter of 2018.

Chart 2  Chart 2: Year-over-year change by industry (second quarter 2019 compared with second quarter 2018)
Year-over-year change by industry (second quarter 2019 compared with second quarter 2018)

Among plastic and rubber product manufacturers, the capacity utilization rate decreased 3.2 percentage points year over year to 78.6% in the second quarter. This decline was moderated by increased production by plastic product manufacturers.

Although transportation equipment manufacturing recorded its third consecutive quarterly increase as motor vehicle production rose, the industry saw a year-over-year decrease in its capacity utilization rate, down 2.7 percentage points to 84.4% in the second quarter.

The capacity utilization rate of chemical manufacturing fell 5.3 percentage points compared with the same quarter of the previous year to 80.3% in the second quarter. The decline was due mainly to pesticide, fertilizer and other agricultural chemical manufacturing.


  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.

With this release of industrial capacity utilization rates, the data have been revised back to the first quarter of 2018 to reflect the latest revisions to the source data. For manufacturing industries, 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 third quarter will be released on December 11.

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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