Survey: Weakness seen in oil and gas extraction
Ottawa - Canadian industries operated at 80.6% of their production capacity in the second quarter of 2013, down slightly from 80.8% in the previous quarter, Statistics Canada reports. The manufacturing and non-manufacturing sectors made...
Ottawa – Canadian industries operated at 80.6% of their production capacity in the second quarter of 2013, down slightly from 80.8% in the previous quarter, Statistics Canada reports. The manufacturing and non-manufacturing sectors made comparable contributions to the decrease.
In particular, declines in capacity use in oil and gas extraction and primary metals more than offset advances in transportation equipment manufacturing and chemical product manufacturing.
Non-manufacturing industries: Weakness in the oil and gas extraction industry
The oil and gas extraction sector contributed the most to the overall decline in capacity use in the second quarter.
Lower crude petroleum extraction pulled the oil and gas extraction industry’s capacity utilization rate down 1.4 percentage points to 85.7%.
There was also a decrease in capacity use in the construction industry, partly as a result of a labour dispute in Quebec in the last two weeks of June. The industry operated at 80.2% of its capacity, down 0.3 percentage points from the previous quarter. This decline was mainly the result of diminished activity in non-residential construction.
Capacity used in the mining and quarrying sector edged down 0.1 percentage points to 65.5%. A decline in coal extraction more than offset an increase in the production of metallic and non-metallic minerals.
The primary metals industry drives down capacity use in manufacturing
The manufacturing sector operated at 79.2% of its capacity in the second quarter, 0.2 percentage points lower than in the previous quarter. The main factor in the decline was the primary metals industry.
Capacity utilization fell in 9 of the 21 major manufacturing groups, which make up about 55% of the manufacturing sector gross domestic product.
The capacity utilization rate was up in 11 industries, particularly transportation equipment manufacturing and chemical product manufacturing.
A decline in production and processing was responsible for a 7.2 percentage-point drop in capacity use in the primary metals industry. The capacity utilization rate was 72.5% in the second quarter, its lowest level since the third quarter of 2009.
Higher production of motor vehicles and motor vehicle parts was the main source of an increase in the capacity utilization rate in the transportation equipment industry. The rate rose from 85.9% in the first quarter to 88.3% in the second quarter.
In the chemical products industry, capacity use increased 2.7 percentage points to 82.8% in the second quarter. This advance was attributable to growth in all types of production other than paints, coatings and adhesives.