Canada’s Industrial Capacity Utilization Falls in Q4

Canadian industrial capacity utilization fell to 78.5% in Q4 2025 from an upwardly revised 78.9% in the previous quarter, but came slightly above market expectations of 78.4%. Capacity utilization in the construction sector declined by 0.5 percentage points to 80.4%, marking the eighth drop in the past ten quarters, amid weaker activity in residential and engineering construction. The capacity utilization rate in the mining, quarrying, and oil and gas extraction sector also decreased, falling 0.6 percentage points to 77.1%, in line with lower oil sands extraction activity. Meanwhile, capacity utilization in the manufacturing sector slipped 0.3 percentage points to 77.7%, mainly due to declines in fabricated metal product manufacturing (-6.6 percentage points) and wood product manufacturing (-1.4 percentage points), the latter affected by the US government’s announcement of additional tariffs on Canadian lumber during the quarter.

Canadian industrial capacity utilization rose to 78.5% in Q3 2025 from a downwardly revised 77.6% in the previous period, though missing market forecasts of 79.3%. Capacity utilization in the construction sector increased 1.3 percentage points to 80.2%, marking the first quarterly gain following eight consecutive declines, on higher activity in engineering construction. The capacity utilization rate in the manufacturing sector rose 1.2 percentage points to 77.8%, driven by petroleum and coal product manufacturing (+10.8 pp) and transportation equipment manufacturing (+1.8 pp). At the same time, capacity utilization in the mining, quarrying, and oil and gas extraction sector increased 0.7 percentage points to 77.1%, bolstered by oil and gas extraction. In contrast, the capacity utilization rate in the electric power generation, transmission and distribution sector fell 1.7 percentage points to 78.8%, amid reduced hydroelectric generation caused by dry conditions.

Canadian industrial capacity utilization declined to 79.3% in Q2 2025 from a downwardly revised 79.9% in the previous quarter, above market expectations of 78.8%. Sluggish performance in key resource sectors contributed to the decline. Capacity utilization in the mining, quarrying, and oil and gas extraction sector fell 1.0 percentage point to 75.9%, driven by reduced oil and gas output amid wildfires and scheduled maintenance. Utilities capacity use dropped 2.9 percentage points to 83.1% as dry weather curbed hydroelectric generation. Manufacturing utilization declined 0.7 percentage point to 76.7%, mainly due to declines in petroleum and coal products (-5.2 percentage points) and food manufacturing (-2.6 percentage points).