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Industrial capacity utilization rates, third quarter 2017

Released: 2017-12-08

Industrial capacity use

85.0%

Third quarter 2017

0.7 pts increase

(quarterly change)

Canadian industries operated at 85.0% of their production capacity in the third quarter, up from 84.3% the previous quarter. This was the fifth consecutive quarterly increase.

The increase in the third quarter was mainly driven by construction and electric power generation, transmission and distribution.

Chart 1  Chart 1: The increase in the industrial capacity utilization rate slows
The increase in the industrial capacity utilization rate slows

Increase driven by construction

In non-manufacturing industries, increased capacity utilization in construction, electric power generation, transmission and distribution, and mining and quarrying were partly offset by a decline in oil and gas extraction, forestry and logging.

The capacity utilization rate in construction posted a fifth consecutive quarterly increase, rising from 87.6% to 89.1% in the third quarter following a period of decline. This gain was the result of an overall increase in construction activities.

The capacity utilization rate in electric power generation, transmission and distribution rose for a third consecutive quarter, reaching 88.9%, the highest level since the fourth quarter of 2008.

Following a 2.7 percentage point increase in the previous quarter, the capacity utilization rate in oil and gas extraction edged down to 81.5% in the third quarter, due to lower conventional oil extraction volumes.

The capacity utilization rate in forestry and logging fell from 86.1% to 81.4% in the third quarter, a fourth consecutive quarterly decline. The decrease was mainly the result of decreased activity in the industry.

Manufacturing increases from durable goods

The manufacturing industry operated at 85.2% of its capacity in the third quarter, up slightly from the previous quarter. This followed four consecutive increases since the third quarter of 2016.

The capacity utilization rate rose in 13 of 21 major manufacturing groups, representing approximately half of the manufacturing sector's gross domestic product.

Chart 2  Chart 2: Capacity utilization in manufacturing edges up
Capacity utilization in manufacturing edges up

Capacity utilization in the machinery manufacturing industry continued to grow, up 2.7 percentage points to 91.3% in the third quarter as most subsectors increased production.

The capacity utilization rate in non-metallic mineral product manufacturing saw its greatest quarterly increase since the third quarter of 2009, rising from 76.7% to 81.4%. Production was up in all non-metallic mineral product manufacturing subsectors.

The overall increase in capacity utilization for manufacturing was moderated by decreases in transportation equipment manufacturing and food processing.

The capacity utilization rate for transportation equipment manufacturers fell from 86.6% to 83.0%, due to a drop in the production of motor vehicles and motor vehicle parts. This marked the fifth decline in six quarters.

Capacity utilization in the food processing industry declined from 87.8% to 87.2%, the first decrease since the second quarter of 2016. Lower production in most food processing subsectors contributed to the 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 2014 to reflect the latest revisions to the source data.

Next release

Data on industrial capacity utilization rates for the fourth quarter of 2017 will be released on March 9, 2018.

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.

The System of Macroeconomic Accounts module features an up-to-date portrait of national and provincial economies and their structure.

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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