According to Statistics Canada, Canadian industries operated at 82.6 percent of their production capacity in the third quarter, down from 84.1 percent in the previous quarter. The decline came in the wake of five consecutive quarterly increases. The decrease in the third quarter was mainly attributed to declines in the manufacturing industries.
The capacity utilization rate of the manufacturing sector fell 2.9 percentage points to 78.8 percent in the third quarter. Year over year, the rate was down 1.5 percentage points. The decrease coincided with a decline in output.
Year over year, capacity utilization decreased in 16 of the 21 major manufacturing groups, accounting for approximately 70 percent of the manufacturing sector's gross domestic product.
Year over year, the capacity utilization rate of the transportation equipment manufacturing industry was down 2.0 percentage points to 80.5 percent in the third quarter. This drop was driven by decreased production of motor vehicles and motor vehicle parts, due to shutdowns of certain plants in the summer.
The overall decline in the manufacturing sector was partially offset by increases in the petroleum and coal product manufacturing industry. Following a decrease of 13.7 percentage points in the previous quarter, the capacity utilization rate of the petroleum and coal product manufacturing industry rose 11.8 percentage points to 89.1 percent in the third quarter, due to a gradual resumption of production following temporary shutdowns and maintenance work at several refineries in the spring. Year over year, the rate fell 2.0 percentage points.
After seven consecutive quarterly increases, capacity utilization in construction fell 2.0 percentage points to 88.3 percent in the third quarter. Decreased activity in all construction subsectors led to this decline.
The capacity utilization rate of oil and gas extraction posted its first decrease in six quarters, falling from 85.4 percent in the second quarter to 84.2 percent in the third quarter. This was led by a decrease in non-conventional oil production, impacted by a large drop in prices for Canadian heavy crude oil.
Conversely, capacity utilization in mining—excluding oil and gas extraction—and quarrying rose 3.4 percentage points to 79.1 percent, after falling 1.6 percentage points in the previous quarter. The resumption of iron ore mining after previous work interruptions contributed to this increase.