Canadian Manufacturing

Manufacturing capacity use leads the way



OTTAWA: Canadian industries operated at 74.2 per cent of their production capacity in the first quarter of 2010, up from 71.3 per cent in the fourth quarter of 2009. According to Statistics Canada, this was the third consecutive quarterly increase.

Prior to these gains, capacity use had been on a downward trend since the first quarter of 2007, when the rate was 83.1 per cent, 8.9 percentage points higher than the rate in the first quarter of 2010.

Increases of 2.7 percentage points in the fourth quarter of 2009 and 2.9 percentage points in the first quarter of 2010 were the largest quarterly gains on record.

The strength recorded by the overall Canadian industries was mainly driven by the manufacturing industry, where the utilization rate rose from 70.7 per cent to 75.0 per cent.

Growth of capacity use in manufacturing was widespread, with 20 of the 21 major manufacturing industries advancing.

Capacity use in total manufacturing increased by 4.3 percentage points in the first quarter of 2010 to 75.0 per cent, following gains of 3.0 and 2.2 percentage points in the fourth and third quarters of 2009, respectively.

Overall, four industries were major contributors to the higher rate for total manufacturing: transportation equipment, primary metal, chemical, and machinery manufacturing.

The transportation equipment industry operated at 63.6 per cent capacity in the first quarter of 2010, compared with 60.0 per cent in the previous quarter. This was 16.3 percentage points higher than the first quarter of 2009, when the industry’s capacity use hit the lowest level on record. Manufacturers of motor vehicles and motor vehicle parts continued to increase production in response to sustained demand for automotive products in both Canada and the US.

In the primary metal manufacturing industry, the utilization rate rose 9.5 percentage points in the first quarter of 2010 to 86.4 per cent, following another 9.5 percentage point increase in the fourth quarter of 2009. Production of primary metals was up 8.8 per cent, the result of increased iron and steel mills and ferro-alloy production, and alumina and aluminum production and processing.

Capacity use in the chemical manufacturing industry grew from 76.7 per cent to 82.1 per cent, continuing an upward trend that started in the third quarter of 2009. Higher production by pharmaceutical and medicine manufacturers and by petrochemical manufacturers led to a 4.2 per cent production gain in the industry.

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