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Industrial capacity utilization rates, first quarter 2021

Released: 2021-06-11

Industrial capacity use

81.7%

First quarter 2021

2.0 pts increase

(quarterly change)

Canadian industries operated at 81.7% of their production capacity in the first quarter, up from 79.7% in the fourth quarter of 2020. The increase in the first quarter was driven by gains in construction and in mining, quarrying, and oil and gas extraction.

With the recovery of the oil and gas extraction subsector and upward trends from preliminary construction sector indicators, industrial capacity utilization could rise in the second quarter of 2021.

Growth in construction accelerates

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

In the construction sector, capacity utilization rose to 92.4% in the first quarter of 2021—the third consecutive quarterly increase. This is the highest rate since the third quarter of 1990. This first-quarter increase coincided with low mortgage rates and favourable developments in housing demand. Building permit values (+13.8%) posted sharp gains during the quarter, particularly in the residential sector (+16.1%). Investment in residential construction also increased strongly (+12.4%). According to the Labour Force Survey, employment in construction was up compared with the fourth quarter of 2020.

Capacity utilization in mining and quarrying (excluding oil and gas extraction) rose 8.9 percentage points to 83.4% in the first quarter of 2021. This increase was led by higher levels of activity in the metal ore and support activities for mining, and oil and gas extraction subsectors, including drilling and rigging services.

Capacity utilization in oil and gas extraction recorded its second consecutive quarterly increase. The capacity utilization rate rose from 76.0% in the fourth quarter of 2020 to 77.5% in the first quarter of 2021. This growth coincided with the increase in oil sands extraction, which benefitted from rising crude oil prices. According to international merchandise trade data, energy product exports were up 23.6% over the previous quarter.

The capacity utilization rate in manufacturing exceeds value posted in first quarter of 2020

Year over year, the capacity utilization rate in the manufacturing sector rose 2.3 percentage points to 76.5% in the first quarter of 2021. Capacity utilization was up year over year in 16 of the 21 major manufacturing industries, representing approximately 80% of gross domestic product in the manufacturing sector.

Chart 2  Chart 2: Year-over-year change by industry (first quarter 2021 compared with first quarter 2020)
Year-over-year change by industry (first quarter 2021 compared with first quarter 2020)

Year over year, wood product manufacturing saw its capacity utilization rate increase 7.9 percentage points to 85.1% in the first quarter. This growth coincided with ongoing demand in residential construction and strong demand from the United States. Wood product manufacturing continued to grow during the quarter, with sales peaking in March, according to the Monthly Survey of Manufacturing. Exports of forestry products and construction and packaging materials increased sharply (+11.9%) during the quarter.

For petroleum and coal product manufacturers, activity remained soft. Year over year, the capacity utilization rate rose 5.2 percentage points to 81.1% in the first quarter of 2021. However, capacity utilization had fallen significantly (-10.8 percentage points) in the first quarter of 2020, as a result of lower global demand and delays in maintenance work. Fuel production continued to be affected by weak domestic demand, due to the travel bans imposed because of the pandemic.

Year over year, the capacity utilization rate in the machinery industry rose 4.6 percentage points to 76.1% in the first quarter of 2021. This increase was primarily attributable to higher production, especially among agricultural, construction and mining machinery manufacturers, whose gross domestic product was up 13.8%. According to the Wholesale Trade Survey, sales of farm, lawn and garden machinery and equipment merchant wholesalers posted a strong quarterly increase (+14.3%).

Transportation equipment manufacturing edged up 0.2 percentage points over the first quarter of 2020. Their capacity utilization rate stood at 75.5% in the first quarter of 2021, after the industry was hit hard by the recent shortage of semiconductor chips that forced some automotive manufacturing plants to close. Moreover, exports of motor vehicles and motor vehicle parts fell significantly (-14.1%) in February. Canadian motor vehicle manufacturers were able to temporarily increase production in March.


  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, forestry and logging, mining, quarrying, and oil and gas extraction, electric power generation, transmission and distribution, and construction.

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.

For this release on industrial capacity utilization rates, the data were revised back to the first quarter of 2020 to reflect the latest revisions to the source data. For manufacturing industries, the data are not seasonally adjusted.

Next release

Data on industrial capacity utilization rates for the second quarter of 2021 will be released on September 10.

Products

The data visualization product "Overview of the industrial capacity utilization rate: Interactive tool," which is part of Statistics Canada — Data Visualization Products (Catalogue number71-607-X), is now available.

The Economic accounts statistics portal, accessible from the Subjects 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 (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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