Canada Industrial Capacity Utilization Rises Above 80% in Q1

Canada's industrial capacity utilization rate rose to 80.1% in the first quarter of 2025, reaching its highest level since early 2023 and slightly surpassing market expectations. This increase was primarily driven by heightened activity in the mining, quarrying, oil and gas extraction sectors, particularly the oil sands and related support services, as well as a significant rise in electricity demand due to colder-than-usual temperatures in parts of the country. Conversely, the manufacturing sector saw a slight decline in utilization, mainly due to reduced output in petroleum, coal, and fabricated metal product manufacturing. The boost in capacity utilization coincided with climbing oil and gold prices amid ongoing geopolitical tensions, including Middle East conflicts, which have contributed to market volatility and inflation concerns. Despite the positive capacity figures, some analysts caution that the increase may be temporary, with potential declines in manufacturing sales and wholesale trade expected in the near term. Overall, elevated commodity prices and geopolitical factors continue to shape Canada's industrial activity and broader economic outlook.