OTTAWA (CP) — Canadian industries reduced their use of production capacity in the fourth quarter as the utilization rate fell to its lowest level in more than 10 years.
Statistics Canada says the manufacturing sector, hard hit by the appreciation of the Canadian dollar, was a major factor in the decline.
Industries operated at 81.8 percent of their capacity, down from 83.4 percent in the third quarter and well below the most recent high of 87.1 in the fourth quarter of 2000.
The annual average rate in 2007 declined for a third straight year to 83.3 percent, down from 84.1 in 2006. It was the lowest level since 1996 when the rate was 82 percent.
The manufacturing sector, already slowed by the soaring Canadian dollar and record world petroleum prices, also suffered a fourth-quarter production cut due to shutdowns for retooling and inventory in automobile assembly plants.
The agency says manufacturers expected to further scale back production during the first quarter of 2008.
The forth-quarter rate also fell in the mining, oil-and-gas extraction, and construction sectors, while growth in the forestry, logging and electrical power sectors partially offset the overall slide.
Manufacturers reduced their production for a second straight quarter, operating at 80.3 percent of capacity, down from 82.4 in the third quarter, as 18 of 21 major industry groups fell.