Industrial utilization rates down slightly in fourth quarter of 2012

Canadian industries operated at 80.7 per cent of their production capacity in the fourth quarter, down slightly from the 81.1 per cent in the third quarter, according to new figures from Statistics Canada. The decline was a result of lower capacity utilization in the manufacturing sector.

The 2.1 percentage point decline in the manufacturing sector in the fourth quarter was partly offset by gains in the non-manufacturing sector.

The manufacturing sector operated at 80.2 per cent of its capacity in the fourth quarter, 2.1 percentage points lower than in the previous quarter.

The decline was largely attributable to transportation equipment manufacturing and food manufacturing, though most other industry groups were also down. Of the 21 major groups in the manufacturing sector, 14 reduced their capacity utilization.

In the transportation equipment manufacturing industry, capacity utilization fell 3.5 percentage points to 88.9 per cent in the fourth quarter. Real gross domestic product in motor vehicle manufacturing, a sub industry of transportation equipment, shrank 5.2 per cent in the fourth quarter, partly because seasonal shutdowns in the industry were of longer duration than in recent years.

For food manufacturers, capacity use experienced its largest quarterly decline ever, falling from 78.1 per cent in the third quarter to 73.8 per cent in the fourth quarter. Sharply reduced output of meat products was a key factor in the decline.

Lower production of agricultural, construction, and mining and oil and gas field machinery pushed the machinery industry’s capacity utilization rate down 3.5 percentage points to 81.5 per cent.

In the fabricated metal products industry, capacity use fell from 83.5 per cent to 80.0 per cent as a result of weaker demand for metal work.

Capacity utilization was higher in the petroleum and coal products manufacturing industry and, to a lesser extent, the paper, chemical products and wood products industries.

In the non-manufacturing sector, there was a widespread increase in capacity utilization in the fourth quarter. This compensated for part of the sharp decline in the manufacturing sector.