Canadian industries operated at 82.0% of production capacity in Q1; gains in construction, electric power generation, transmission and distribution, manufacturing offset by mining, quarrying, oil and gas extraction, forestry and logging: Statistics Canada

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OTTAWA , June 10, 2022 (press release) –

Canadian industries operated at 82.0% of their production capacity in the first quarter of 2022. This was unchanged from the previous quarter.

The gains in the construction sector, the electric power generation, transmission and distribution industry and the manufacturing sector were offset by declines in the mining, quarrying, and oil and gas extraction and the forestry and logging subsectors.

A second consecutive increase in the construction sector

Chart 1: Industrial capacity utilization in non-manufacturing industries

After advancing in the previous quarter, capacity utilization in the construction sector rose 2.7 percentage points to 95.1% in the first quarter. Investment in building construction increased 9.2% in the first quarter, driven mainly by strength in the residential sector. Engineering and other construction activities (+3.5%) also saw an increase. According to the Labour Force Survey (LFS), employment in construction rose from 1.44 million in the fourth quarter of 2021 to 1.51 million in the first quarter.

In mining, quarrying, and oil and gas extraction, capacity utilization shrank 2.8 percentage points to 78.1% in the first quarter. This drop was mostly due to lower activity in oil sands extraction and the support activities for mining subsector. Production was affected by below-normal temperatures, COVID-19 outbreaks, limited staff and maintenance of oil sands facilities.

Capacity utilization in manufacturing edges up
Year over year, the capacity utilization rate in manufacturing edged up 0.2 percentage points to 76.3% in the first quarter. According to the LFS, employment in the manufacturing sector increased from 1.75 million in the fourth quarter of 2021 to 1.76 million in the first quarter. On a year-over-year basis, capacity utilization rose in 14 of the 21 major manufacturing industry groups, representing about 70% of gross domestic product in manufacturing.

Chart 2: Year-over-year change by industry, first quarter 2022 compared with the first quarter 2021

In the first quarter, the capacity utilization rate of petroleum and coal product manufacturers saw a year-over-year increase of 9.0 percentage points to 90.2%. After being impacted by public health measures, this industry has begun to see a gradual recovery in the domestic consumption of refined petroleum products, mostly thanks to easing of the restrictions imposed to contain COVID-19, including international travel restrictions. The first-quarter capacity utilization rate topped its annual average of 2019 (85.8%). This advance coincided with higher exports of refined petroleum energy products (+21.1%).

The transportation equipment manufacturing subsector saw a second consecutive increase in its capacity utilization rate, rising to 70.0% in the first quarter. Stronger activity was observed in the automobile and light-duty motor vehicle manufacturing (+9.1%) and other transportation equipment (+20.5%) industries. However, the transportation and equipment manufacturing capacity utilization rate is still well below what was recorded in the first quarter of 2021 (75.9%), resulting in a year-over-year decline of 5.9 percentage points. At the beginning of the first quarter, the motor vehicle and part production was impacted by shutdowns at some auto assembly plants due to the global shortage of semiconductor chips.

Note to readers
The industrial capacity utilization rate is the ratio of an industry's actual output to its estimated potential output.

This program covers all manufacturing industries, forestry and logging, mining, quarrying, and oil and gas extraction, electric power generation, transmission and distribution, and construction.

For non-manufacturing industries, the quarterly pattern is derived from the output-to-capital ratio series, the output being the real gross domestic product at basic prices, seasonally adjusted, by industry.

For this release on industrial capacity utilization rates, the data were revised back to the first quarter of 2021 to reflect the latest revisions to the source data. For manufacturing industries, the data are not seasonally adjusted, as the new survey source (Monthly survey of manufacturing) does not have a long enough time period to perform a seasonal adjustment.

Next release
Data on industrial capacity utilization rates for the second quarter of 2022 will be released on September 9, 2022.

Products
The data visualization product "Overview of the industrial capacity utilization rate: Interactive tool," which is part of the Statistics Canada — Data Visualization Products series (Catalogue number71-607-X), is now available.

The Economic accounts statistics portal, accessible from the Subjects module of the Statistics Canada website, features an up-to-date portrait of national and provincial economies and their structure.

The Latest Developments in the Canadian Economic Accounts (Catalogue number13-605-X) is available.

The User Guide: Canadian System of Macroeconomic Accounts (Catalogue number13-606-G) is available.

The Methodological Guide: Canadian System of Macroeconomic Accounts (Catalogue number13-607-X) is available.

Contact information
For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; infostats@statcan.gc.ca) or Media Relations (statcan.mediahotline-ligneinfomedias.statcan@statcan.gc.ca).

Industry Intelligence Editor's Note: This press release omits select charts and/or marketing language for editorial clarity. Click here to view the full report.

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