Industrial capacity utilization rates, third quarter 2016
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Released: 2016-12-08
81.9%
Third quarter 2016
2.2 pts 
(quarterly change)
Canadian industries operated at 81.9% of their production capacity in the third quarter, up from 79.7% in the previous quarter. The increase was mainly attributable to the oil and gas extraction industry as operations resumed following the Fort McMurray wildfires.
The 2.2 percentage point gain was the largest quarterly increase recorded by Canadian industries since industrial capacity utilization rates were first published in their current form starting in the first quarter of 1987.
Chart 1
Industrial capacity utilization rate increases
Oil and gas extraction the main contributor to the overall increase
Oil and gas extraction was the main contributor to the increase in the capacity utilization rate in the third quarter, rising 8.0 percentage points to 82.3% following a decline in the second quarter. An increase in the volume of oil extraction, after operations resumed following the wildfires in Fort McMurray and scheduled maintenance outages, was mainly responsible for the gain.
In the electric power generation, transmission and distribution industry, the capacity utilization rate rose from 83.8% to 87.4%, as a result of increased production. The rate in this industry has risen for three consecutive quarters, following three quarters of decline.
The capacity utilization rate in the construction industry declined for the sixth time in seven quarters, falling from 83.7% in the second quarter to 83.4% in the third quarter. The decrease in the third quarter was the result of an overall decline in activities in the industry.
Non-durable goods manufacturing raises the capacity utilization rate of the manufacturing sector as a whole
Following a decline in the second quarter, the capacity utilization rate of the manufacturing sector as a whole rose 0.7 percentage points in the third quarter to 82.6%. Non-durable goods manufacturing was the main source of the increase.
In the third quarter, 9 of the 21 major manufacturing industries increased their capacity utilization, accounting for over half of the gross domestic product in the sector.
Chart 2
Capacity utilization in manufacturing rebounds after declining in the previous quarter
The capacity utilization rate in the food manufacturing industry reached a record 85.1% in the third quarter. This was the third straight quarterly gain. Increased production in most of the subsectors in the industry was behind the gain.
After decreasing for five consecutive quarters, the capacity utilization rate in the machinery manufacturing industry rebounded from 70.4% in the second quarter to 73.6% in the third quarter. The advance was attributable to an overall increase in production.
Chemical product manufacturers increased their industrial capacity utilization rate for the third time in four quarters, rising from 83.0% in the second quarter to 85.7% in the third quarter. Higher production in most of the subsectors in the industry was the reason for the gain.
The overall gain in the manufacturing sector was partially offset by decreases, particularly in the transportation equipment industry.
The capacity utilization rate of transportation equipment manufacturers fell from 92.2% in the second quarter to 90.5%. Decreased production of motor vehicles and motor vehicle parts and aerospace products and parts were the main source of this decline.
Note to readers
The industrial capacity utilization rate is the ratio of an industry's actual output to its estimated potential output.
For most industries, the annual estimates are obtained from the Annual Survey of Manufacturing and Logging Industries while 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.
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 industrial capacity utilization rates, the data were revised back to the first quarter of 2013 to reflect the latest revisions to the source data. Specifically, revised data for capital stock by industry and gross domestic product at basic prices were incorporated to take into account the latest revision of the Canadian System of Macroeconomic Accounts.
Next release
Data on industrial capacity utilization rates for the fourth quarter of 2016 will be released on March 9, 2017.
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