Canada Q4 industrial capacity use shows tepid rise

Wed Mar 14, 2012 8:46am EDT
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OTTAWA (Reuters) - Canadian industries operated at 80.5 percent of capacity in the fourth quarter, up slightly from a revised 80.0 percent in the third quarter but down from the originally reported 81.3 percent, Statistics Canada said on Wednesday.

The rate has increased steadily since the second quarter of 2009, with the exception of the second quarter of 2011, but has yet to reach the pre-recession peak of 83.4 percent in the first three months of 2007. A Reuters survey of analysts had predicted 81.5 percent for the fourth quarter.

The Bank of Canada looks at the level of spare capacity in the economy to determine whether inflationary pressures are building, with low capacity use indicating little pressure on prices.

Manufacturing saw an increase in its capacity use to 80.4 percent from a sharply downward revision of 79.0 percent in the third quarter, with a jump in the transportation equipment industry to 88.5 percent from 83.6 percent, mainly on the auto and aerospace sectors.

In non-manufacturing, crude oil and gas production was the only industry to show a rise, to 90.3 percent from 88.2 percent, with natural gas accounting for the bulk of the increase. Mining fell to 65.0 percent from 68.9 percent, mainly because of lower potash production.

Statistics Canada said the revisions are primarily due to new data from an annual survey, produced in February, which asks industries at what capacity they are operating. The quarterly capacity use figures are derived through the year primarily by using gross domestic product data.

(Reporting by Randall Palmer; Editing by James Dalgleish)