According to Statistics Canada, Canadian industries operated at 85.5 percent of their production capacity in the second quarter, up from 83.7 percent in the first quarter. This follows a slight decrease in capacity utilization in the first quarter of 2018 from the fourth quarter of 2017.
The increase in the second quarter of 2018 was led by the mining, quarrying and oil and gas extraction sector and, to a lesser extent, the manufacturing sector.
In the construction sector, capacity use rose 0.8 percentage points to 93.0 percent in the second quarter. Increased activity in residential and non-residential building construction led the gain.
Conversely, capacity utilization in mining—excluding oil and gas extraction—and quarrying fell 1.4 percentage points to 76.0 percent, following a flat first quarter. A slowdown in iron ore mining due to work interruptions constrained production during the quarter.
The manufacturing capacity utilization rate rose 1.8 percentage points to 81.8 percent in the second quarter. Year over year, the rate was up 0.7 percentage points. Increased production in durable goods manufacturing industries drove the increase.
Capacity utilization rose in 16 of the 21 major manufacturing groups, accounting for approximately 80 percent of the manufacturing sector's gross domestic product.
The capacity utilization rate of the primary metal manufacturing industry, which includes aluminum and steel, increased 2.1 percentage points to 80.6 percent in the second quarter. The rate was up 3.5 percentage points year over year, partly due to increased exports of steel and aluminum products, in anticipation of new customs tariffs on Canadian exports of steel and aluminum products to the United States.