Manufacturing rose again in second quarter

Canada’s industries reached a production capacity of 82.7 per cent in the second quarter, up 0.6 per cent from the previous quarter, Statistics Canada reports. It was the fourth consecutive quarterly gain, reaching the highest level since mid-2007, and manufacturing industries were the main source. Increased exports, particularly of autos and auto products, and aircraft, are largely responsible for the manufacturing gains. Economists have noted that the strengthening US economy and the weakening Canadian dollar have together spurred demand for Canadian products.

The growth was not uniformly spread. In the transportation equipment industry, for example, capacity utilization rose 3.9 per cent, reaching close to full capacity at 93.7 per cent. This was the result of widespread gains in the production of all types of transportation equipment, except ships and boats.

cars-transport-exports-Canada-economy-manufacturing-Statistics-Canada-EDIWeekly
Greater demand for cars, trucks and aircraft were responsible for increase in Canada’s manufacturing output in the second quarter.

Chemical products manufacturers, including pharmaceuticals and medicine, increased 2.5 per cent to 76.7 per cent capacity in the second quarter.

In non-manufacturing industries, including oil and gas extraction, construction, and mining and quarrying, gains ranged from 0.2 per cent to 2.7 per cent.

However, seven industries, particularly the primary metal industry, declined, exerting a moderating influence on the manufacturing sector.

Despite the overall improvement in the manufacturing sector,  the notion that Canada has “Dutch disease” has once again been floated by a Bank of America Merrill Lynch economist who stated that oil and gas are taking on a disproportionately large share of Canada’s exports. Exports of manufactured goods have dropped from about 40 per cent of total exports to just over 30 per cent, while exports of oil and gas products are approaching 27 per cent, making them the single largest export.

The Bank of Canada has always denied the Dutch disease analysis, which describes falling manufacturing and falling exports as a result of the rising value of the country’s currency (becoming a so-called “petro dollar”). Instead, the central bank has continued to  insist that Canada needs to do more to expand its overseas markets for oil and gas exports.

Did you miss this?

Other Popular Stories

  • Toronto an ideal location for Amazon HQ 2: If Amazon needs to hire tech employees, GTA and Canada has the edge
  • Canada's start-ups need more help to become global players: OCC
  • Infrastructure in focus at Queen's Park as new legislation tabled
  • World will invest $7.8 trillion in solar, wind over next 25 years: Bloomberg
  • SpaceX "first orbital class rocket capable of reflight" test flight today: $12 billion in contracts and a 100 missions at stake: live feed of launch
  • Breakthrough vehicles that dare to change the auto industry: 1300 hp EVs and 300 km ranges
  • $26 Trillion needed over 13 years to power infrastructure for world's fastest growing economies
  • New CEO chosen to take over Waterfront Toronto
  • Aerospace is to Quebec what auto industry is to Ontario, and must be supported: Couillard
  • Nexen Energy Expansion Announced
  • SNC-Lavalin to build $4.2 billion Champlain Bridge in Montreal
  • High speed rail finally coming to Toronto-Windsor corridor? What will Ontario high speed look like?
  • US, Canada announce new safety regulation for railway tanker cars
  • Artificial leaf converts sunlight, water to fuel
  • GM/Honda latest partners in search for affordable fuel cell car
  • Manufacturing recovers ground in January: GDP up 0.2 per cent
  • Some industry support for new water heater regulations
  • Lockheed Martin reveals breakthrough nuclear fusion process
  • CSeries engine problem just an oil seal leak: Pratt & Whitney
  • Solar Challenge 3,000 kilometer "race" tests solar capabilities and technologies
Scroll to Top