Ottawa – Canadian industries operated at 83.6% of their production capacity in the fourth quarter of 2014, up slightly from 83.2% in the previous quarter, according to the latest survey of Industrial capacity utilization rates from Statistics Canada.
Mining and quarrying, and oil and gas extraction industries, as well as manufacturing industries were the main sources of the gain in the fourth quarter. Except for a slight decline in the first quarter of 2014, the capacity utilization rate has been increasing since the second quarter of 2013.
Oil and gas extraction main factor behind overall increase
Oil and gas extraction was mainly responsible for the advance in the capacity utilization rate in the fourth quarter. The capacity utilization rate of oil and gas extraction rose 1.8 percentage points to 88.8% in the fourth quarter, as a result of higher volumes of oil and gas extraction.
The electric power generation, transmission and distribution industry posted a 1.7 percentage point gain to 85.4% in the fourth quarter, reflecting higher demand for electricity.
Capacity utilization in the construction industry rose for the third straight quarter, going from 84.8% to 85.0% as a result of increased activity in residential building construction.
The capacity utilization rate in forestry and logging fell 3.8 percentage points to 78.4% in the fourth quarter, on account of reduced activity in the industry.
Machinery as well as transportation equipment manufacturing contribute to the higher manufacturing rate
The manufacturing industry operated at 83.7% of its capacity in the fourth quarter, up 0.3 percentage points from the previous quarter. The machinery manufacturing and transportation equipment manufacturing industries were primarily responsible for this increase.
The capacity utilization rate was up in 10 of the 21 major manufacturing groups, accounting for approximately 70% of the manufacturing sector’s gross domestic product.
Capacity utilization in the machinery manufacturing industry rose 1.6 percentage points to 83.2% in the fourth quarter. Increased production in industrial machinery manufacturing was the main reason for this increase.
Higher production of motor vehicles and motor vehicle parts was the main source of the increase in the capacity utilization rate in the transportation equipment industry. The rate rose from 93.4% in the third quarter to 94.1% in the fourth quarter.
Average annual rate rebounds in 2014 after edging down the previous year
After edging down 0.3 percentage points in 2013, the average capacity utilization rate of Canadian industries rose 1.6 percentage points to 82.8% in 2014.
The average annual rate of manufacturing industries was 82.6% in 2014 compared with 80.2% in 2013. This increase of 2.4 percentage points more than offset the 1.2 percentage point decline in the manufacturing industries in 2013.
Of the 21 major manufacturing groups, three saw their annual average capacity utilization rate fall in 2014: electrical equipment, appliances and components; miscellaneous manufacturing; and primary metal.
Compared with 2013, the industries with the largest percentage-point gains in capacity use in 2014 were textile mills, textile product mills, wood product manufacturing and transportation equipment manufacturing. The biggest declines were in forestry and logging as well as electric utilities.