Canada Q3 industrial capacity use edges down

Mon Dec 14, 2009 11:21am EST
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By Louise Egan

OTTAWA (Reuters) - Canadian industries used less of their capacity in the third quarter than ever before, but manufacturers had less slack in their production lines for the first time in five quarters as the economy stabilized.

Industries -- including mines, factories, utilities and drilling rigs -- operated at 67.5 percent of capacity, down from a revised 67.7 percent in the second quarter, Statistics Canada said on Monday. That was the lowest since record-keeping began in 1987 but stronger than expected largely because of a jump in auto production.

The median forecast of analysts in a Reuters poll was for a 67.0 percent capacity utilization rate, based on dismal industrial production data even as signs emerged that the economy was starting to recover from recession during the third quarter.

At the same time, manufacturers ramped up their capacity use to 65.6 percent from 64.7 percent, the first increase in five quarters after automakers reopened some production capacity shuttered earlier this year.

"Manufacturers of motor vehicles and motor vehicle parts significantly increased their production to meet rising demand, mostly from the United States," Statscan said in a release.

The transportation equipment industry overall -- three-fifth of which is automakers -- jumped 5.5 percentage points to 53.6 percent capacity utilization.

Chemical and wood manufacturers also contributed to the gain.

Non-manufacturers scaled back their capacity use across all sectors, pressured by the mining and oil and gas extraction sectors.   Continued...