Canadian industries operated at 82.6 percent of their production capacity in the third quarter 2018, down from a downwardly revised 84.1 percent in the previous quarter and hitting its lowest level since the second quarter of 2017. It compares with market expectations of 85.7 percent. The decrease in the third quarter was mainly attributed to declines in the manufacturing industries (-2.9 pp to 78.8%), mostly due to chemicals (-10 pp to 75.6%) and, to a lesser extent, the construction sector (-2.0 pp to 88.3%) and forestry and logging (-1.0 pp to 82.7%). In contrast, increases were seen for electric power generation, transmission and distribution (+1.9 pp to 84.5%) and mining, quarrying and oil and gas extraction (+0.3 pp to 82.5%), led by mining & quarrying (+3.4 pp to 79.1%), as capacity utilization of oil and gas extraction posted its first drop in six quarters (-1.2 pp to 84.2%), impacted by a large drop in prices for Canadian heavy crude oil. Capacity Utilization in Canada averaged 83.02 percent from 1987 until 2018, reaching an all time high of 87.30 percent in the first quarter of 1988 and a record low of 72.70 percent in the second quarter of 2009.
Capacity Utilization in Canada is expected to be 85.00 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Capacity Utilization in Canada to stand at 84.00 in 12 months time. In the long-term, the Canada Capacity Utilization is projected to trend around 83.00 percent in 2020, according to our econometric models.