Industrial capacity utilization rates, fourth quarter 2022
Fourth quarter 2022
Canadian industries operated at 81.7% of their production capacity in the fourth quarter, down from 82.2% in the third quarter.
This downturn in the fourth quarter was primarily attributable to declines in the mining, quarrying, and oil and gas extraction sector.
Mining, quarrying, and oil and gas extraction sector contracts
Following two consecutive quarterly increases, capacity utilization in the mining, quarrying, and oil and gas extraction sector fell 2.3 percentage points to 79.7% in the fourth quarter. This decline was driven by scaled-back operations, particularly in oil sands extraction. Crude oil production was curbed by an oil spill from the Keystone pipeline in Kansas, which is used to export crude oil to the United States.
In the construction sector, capacity utilization rose 0.9 percentage points to 91.3% in the fourth quarter. Increased activity in engineering construction more than offset the decline in residential construction. According to the Labour Force Survey, the employment level in construction rose from 1.53 million in the third quarter to 1.58 million in the fourth quarter.
Slight uptick in the capacity utilization of manufacturing
The capacity utilization rate in the manufacturing sector edged up 0.2 percentage points to 76.8% in the fourth quarter. Capacity utilization increased in 11 of the 21 major manufacturing industry groups, representing approximately 60% of gross domestic product in the manufacturing sector.
In the fourth quarter, the capacity utilization rate of transportation equipment manufacturers rose 1.0 percentage points to 75.7%. This advance coincided with increased activity in the miscellaneous transportation equipment manufacturing (+17.5%) and motor vehicle parts manufacturing (+2.4%) subsectors.
Year 2022 in review
In 2022, the industrial capacity utilization rate posted a second consecutive annual increase after a decline in 2020. The capacity utilization rate reached 81.9% in 2022, up 0.9 percentage points from 2021.
Oil and gas extraction rose 2.0 percentage points to 81.0% in 2022. Stronger activity was observed in gas extraction (+7.4%) and oil sands extraction (+2.2%).
The manufacturing sector saw an annual increase of 0.9 percentage points in the capacity utilization rate to 77.1% in 2022. Capacity utilization saw annual growth in 14 of the 21 major industry groups.
Among the industries that contributed to the overall gain in manufacturing, transportation equipment manufacturers saw their capacity utilization rate increase 4.6 percentage points to 73.4% in 2022. Although the supply chain issues observed in 2021 persisted in 2022, global supply chains began to see improvement, and, as a result, automakers were affected less.
The annual capacity utilization rate of petroleum and coal product manufacturers was up 2.7 percentage points to 86.3% in 2022. A gradual increase in travel activity contributed to the rise in demand for transportation fuels.
The construction sector saw its capacity utilization edge down 0.5 percentage points to 91.3% in 2022. The decline was driven by weaker activity in residential building construction (-5.7%) after interest rates gradually rose in 2022.
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 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.
In this release, the industrial capacity utilization rates from the Monthly Survey of Manufacturing were seasonally adjusted using X-12 ARIMA from the first quarter of 2017.
Data for non-manufacturing industries have been revised back to the first quarter of 2022 to account for revisions to the source data and new estimates from the statistical model.
Data on industrial capacity utilization rates for the first quarter of 2023 will be released on June 9, 2023.
The data visualization product "Overview of the industrial capacity utilization rate: Interactive tool," which is part of the Statistics Canada — Data Visualization Products series (71-607-X), is now available.
The Economic accounts statistics portal, accessible from the Subjects module of the Statistics Canada 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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