Industrial capacity utilization rates, third quarter 2019
Third quarter 2019
Canadian industries operated at 81.7% of their production capacity in the third quarter, down from 83.3% in the previous quarter.
The mining, quarrying and oil and gas extraction sector was the main source of this decline. An increase in the construction sector was more than offset by declines in the mining, quarrying and oil and gas extraction, manufacturing, electric power generation, transmission and distribution, and forestry and logging sectors.
A considerable decline in capacity utilization in mining, quarrying and oil and gas extraction
After rising in the previous quarter, the capacity utilization rate in the mining, quarrying and oil and gas extraction sector fell 3.5 percentage points to 78.4% in the third quarter.
Capacity utilization in oil and gas extraction fell from 84.8% in the second quarter to 80.7% in the third quarter. This decline was attributable to lower production combined with problems at certain production facilities and maintenance of some Atlantic offshore oil platforms.
Capacity utilization in mining and quarrying (excluding oil and gas extraction) fell 2.3 percentage points to 73.5% in the third quarter. Lower activity levels, as measured within gross domestic product, were observed in the subsectors of support activities for mining, quarrying and oil and gas extraction (-8.9%), in non-metallic mineral mining and quarrying (-2.3%) and iron ore mining (-2.8%).
The capacity utilization rate in the construction sector rose 1.7 percentage points to 91.2% in the third quarter. This was the highest capacity utilization rate since the third quarter of 2007 and the third consecutive quarterly increase. This gain coincided with higher investment in building construction, mainly residential building construction.
Manufacturing capacity utilization declines year over year
Year over year, the capacity utilization rate for manufacturing fell 1.8 percentage points. Capacity utilization was down year over year in 14 of the 21 major manufacturing industries, representing approximately 80% of gross domestic product in the manufacturing sector.
The capacity utilization rate in manufacturing was 78.3% in the third quarter, the lowest rate since the first quarter of 2017.
Compared with the same quarter in 2018, the capacity utilization rate of chemical manufacturing decreased 8.0 percentage points to 76.7% in the third quarter. This year-over-year decline was led by decreased activity in pharmaceutical and medicine manufacturing. This was the second straight quarterly decline, as the capacity utilization rate fell 3.6 percentage points from the previous quarter.
The capacity utilization rate of wood product manufacturers fell 7.5 percentage points year over year to 75.5%. Lower activity levels were observed among sawmills and wood preservation manufacturers, and among veneer, plywood and engineered wood product manufacturers.
The capacity utilization rate of primary metal manufacturers decreased 4.5 percentage points year over year to 74.8% in the third quarter. The decline was attributable to lower sales and higher inventories of iron and steel mill and ferro-alloy products in the third quarter.
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.
For this release on industrial capacity utilization rates, the data were revised back to the first quarter of 2015 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.
Data on industrial capacity utilization rates for the fourth quarter of 2019 will be released on March 11, 2020.
The data visualization product Overview of the industrial capacity utilization rate: Interactive tool, which is part of Statistics Canada – Data Visualization Products (71-607-X), is now available.
The Economic accounts statistics portal, accessible from the Subject module of our website, features an up-to-date portrait of national and provincial economies and their structure.
The Latest Developments in the Canadian Economic Accounts (13-605-X) is available.
The User Guide: Canadian System of Macroeconomic Accounts (13-606-G) is available.
The Methodological Guide: Canadian System of Macroeconomic Accounts (13-607-X) is available.
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