Higher than expected rate in third quarter suggests employers are coping with stronger Canadian dollar
(Reuters) — Strong demand for vehicles and other manufactured goods lifted Canada's industrial capacity use to a higher-than-expected 78.1 per cent in the third quarter, suggesting businesses are coping with a stronger currency.
The rate rose for the fifth consecutive quarter to reach a two-year high and was up from the 76.9 per cent rate in the second quarter, according to Statistics Canada on Monday. The agency revised the estimate for the second quarter from 76 per cent previously.
The gain of 1.2 percentage points was smaller than in the previous three quarters but still exceeded a market forecast that industries would operate at just 76.5 per cent of their potential output in the period. The rate peaked in the first quarter of 2007.
The manufacturing sector, battered by the strong Canadian dollar and weak demand in the United States, drove most of the gains, Statscan said. The sector's capacity use rate jumped to 81.2 per cent from a revised 78.7 per cent in the previous quarter.
Factories making transportation equipment, including cars, raised their capacity use to 74.3 per cent from 70.3 per cent in the second quarter. Machinery makers ran at 85.4 per cent capacity, the third-highest level on record.
Overall, 15 of the 21 major industries within manufacturing posted gains. In the non-manufacturing sector, only forestry and logging registered a significant gain while other industries showed modest ups or downs.
