Ottawa – Canadian industries operated at 82.5% of their production capacity in the first quarter of 2014, up slightly from 82.2% in the fourth quarter of 2013, Statistics Canada reports in its latest study of industrial capacity utilization rates. The mining and oil and gas extraction industries were the main sources of this increase.
The rate in the first quarter was the highest since the second quarter of 2007.
Mining and oil and gas extraction lead the overall increase
Mining and oil and gas extraction were mainly responsible for the growth of the capacity utilization rate in the first quarter, more than offsetting declines in manufacturing and forestry and logging.
The capacity use rate in oil and gas extraction rose 1.9 percentage points to 88.7% in the first quarter, as a result of increased oil and gas extraction.
In the mining and quarrying industry, the rate increased 2.3 percentage points to 65.5% in the first quarter. As in the fourth quarter, the higher rate was due to an increase in metallic and non-metallic mineral extraction.
The capacity utilization rate in forestry and logging declined 2.3 percentage points to 84.8% in the first quarter, as a result of reduced activity in the industry.
Manufacturing down slightly after two quarters of gains
The manufacturing sector operated at 81.2% of its capacity in the first quarter, down 0.1 percentage points from the fourth quarter of 2013. The chemical product manufacturing and transportation equipment manufacturing industries were largely responsible for this decrease.
Of the 21 major groups in the manufacturing sector, 9 posted a decline in their capacity utilization rate and 12 recorded an increase.
The capacity use of chemical product manufacturers declined from 78.3% to 76.5% in the first quarter because of lower production in most of the industry’s subsectors.
In the transportation equipment manufacturing industry, the rate fell 0.8 percentage points to 90.5% in the first quarter. This decrease was mostly attributable to a decline in the production of motor vehicles.
In contrast, the wood product manufacturing and beverage and tobacco product manufacturing major groups were up, partly compensating for the decline in the manufacturing sector’s overall rate.
Production increased in all wood product manufacturing subsectors, pushing the industry’s capacity utilization rate up 2.5 percentage points to 89.8%.
The beverage and tobacco product manufacturing industry increased its capacity utilization rate from 73.2% to 76.7% between the fourth quarter of 2013 and the first quarter of 2014. Beverage production was up, more than offsetting the decline in tobacco product manufacturing.